In venture capital, one lesser-known tool that plays a significant role is SPVs. Special Purpose Vehicles (SPVs) โ structures that pool capital from multiple investors for a single investment. In simpler terms, imagine you and four friends want to invest in a startup. Instead of each handling your own paperwork, you form an SPV, which - - Simplifies the process - Makes it easier for startups to manage equity - Allows smaller amounts to be pooled together to meet the investment threshold To help you see how SPVs compare to traditional VC funds, I've mapped out the differences belowโคต๏ธ
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