I got a question from a potential LP: what's the difference between SPV and a fund and why we can't work as an SPV structure? I'm confused what to answer :slightly_smiling_face:
May 03, 2023
An SPV is a non-blind vehicle that contains one deal.
A venture fund is a blind pool, the limited partners do not know what deals are going to be invested in, that contains a diversified set of portfolio companies, usually 10 to 25.
The fees are normally much smaller for SPVs, which make then attractive to limited partners. SPVs end up being a distraction to venture capitalists looking to set up a venture capital firm, since they are not real venture funds and since the economics are small.