Private markets · Structures
Should you buy pre-IPO shares directly or through an SPV?
A direct purchase makes you a shareholder; an SPV makes you an investor in a vehicle that holds shares, or claims to. The difference shows up in fees, rights, transferability and what happens at exit.
Facts checked 7 Oct 2026 · By Dipankar Sarkar · Education only — not an offer
| Direct shares | SPV interest | |
|---|---|---|
| What you own | Shares registered in your name on the company's cap table | An interest in a vehicle that holds shares, or an interest in another vehicle |
| Fees | One-off transaction and legal costs | Upfront fee, often an annual fee, and carry on the gain, at every layer |
| Minimum | Usually a whole block from one seller, often large | Lower, because the vehicle pools investors |
| Company approval | Required for the transfer; right of first refusal may apply | Needed when the vehicle bought; some companies say SPV transfers are void |
| Rights and information | Shareholder rights as set by the company's documents | Whatever the vehicle passes through; usually limited |
| At IPO | Your shares, subject to lock-up | The manager distributes shares or cash on its timetable, net of carry |
Worked example: why the cheaper SPV can return less
Suppose a direct block is quoted at $81.20 and an SPV at $77.40 with a 2% upfront fee, 0.5% a year in fees and 20% carry. At an exit of $160 after 4 years the direct route returns 1.97×. The SPV returns 1.81× and behaves like buying direct at $88.61, about 9% more than the direct quote, despite its lower headline price. Carry is a share of the profit, so the better the outcome, the more it costs.
Try your own numbers in the offer calculator.
The risks specific to SPVs
- No cap-table relationship. You depend on the vehicle and its manager for everything.
- Layering. Some vehicles invest through other vehicles, each charging fees, and investors may not know their real holding until after an IPO lock-up.
- Unrecognised transfers. Anthropic and OpenAI have said they treat unapproved SPV transfers as void; see the company pages.
- Hidden markups. Regulators have alleged sponsors resold shares to their own vehicles at large undisclosed markups. Ask what the vehicle paid.
Frequently asked questions
- Is it better to buy pre-IPO shares directly or through an SPV?
- Direct ownership puts you on the company's cap table with no ongoing fees or carry, but needs company approval and usually a large minimum. An SPV lowers the minimum and handles the paperwork, but you own an interest in the vehicle, pay its fees and carry, depend on its manager, and some companies say they do not recognise SPV transfers at all.
- Do SPV investors get shareholder rights?
- Generally no. The SPV is the shareholder of record (or holds an interest in one), so voting, information rights and any company communications go to the vehicle, not to you.
- What happens to an SPV when the company goes public?
- The vehicle's documents decide. Typically the shares remain locked up after the IPO, after which the manager either distributes shares to investors or sells and distributes cash, net of carry and fees.
Sources
- Carta — How does carry work for SPVs?
- Sydecar — Should SPV deal leads charge management fees? (6 Oct 2026)
- EquityZen — Investing in Growth Opportunity Fund XI (5 Sept 2025)
- U.S. SEC — Release 2026-75 (14 Aug 2026)
- TechCrunch — SpaceX SPV investors won't know their true holdings until lock-ups lift (11 Jun 2026)
- FINRA — Know the risks of pre-IPO funds and potential fraud (18 Aug 2026)
- Lowenstein Sandler — SEC guidance on pre-IPO liquidity products (13 Jun 2022)
- SEC Investor.gov — Pre-IPO investment scams (investor alert) (7 Jun 2024)
Tell us what you're trying to acquire
Describe the exposure you want — or the offer you already have.
We keep a register of investor interest to understand where private-market demand is and on what terms. It is not an order and we do not arrange transactions. Or run an offer you've received through the calculator first.