Intro to SPVs
Multi-part article on SPVs and Syndicates
Leading SPVs can be an extremely high-leverage activity, as well as a great way to build a track record and establish relationships with LPs and founders. However, getting started isn’t easy. There are multiple factors to navigate, such as building an LP base, selecting the optimal SPV admin platform, and simply learning the ins and outs of SPVs and their economics.
I’ve been leading SPVs since late 2019, both independently, as part of a Syndicate that I formed with some friends called DVC (we’ve run over 100 SPVs since Jan. 2021), and on behalf of my fund, Interlace Ventures.
I’ve learned a lot in the process and in the following pieces will share some of my learnings. I will cover the following topics:
What is an SPV and why are they used?
SPV Economics
Incentives (SPV Leads, LPs)
SPV Administration Platforms
Growing an LP Base
Advice for Founders
And more…
About me (more info here)
Partner at Interlace Ventures, an early stage VC investing in the future of commerce. Based in NYC and SF.
Co-founded DVC (and DVG, our growth arm), where we invest across stages, sectors, and geographies. Since our inception in early 2021, we’ve led over 100 SPVs ranging from pre-seed deals at sub $3M valuations to pre-IPO deals valued at north of $10B. We typically invest in primary fundraises (where the company is raising a new round of external capital) but we’ve also bought secondaries from existing shareholders looking for liquidity. We try to do it all.
Note: SPVs are incredibly versatile. They can be used to pool capital for film investments, real estate projects, and more. It’s also common for venture funds to utilize SPVs to allow their investors to participate in later stage rounds of existing portfolio companies if the fund no longer has capital available to deploy, or if the fund has excess allocation and wants to allow their LPs to double down on an opportunity alongside the fund (co-invest). The focus here though, will solely be on Syndicate Leads and the way in which they can utilize SPVs.
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