There's no doubt about it: Special purpose vehicles (SPVs) are having a moment. When Uber went public in 2019, more than 100 SPVs dotted its cap table, allowing investors to gain exposure to the ride-hailing giant without actually owning its stock. Since then, SPVs have only grown in popularity, as more and more investors seek alternative ways to invest in promising startups.
A special purpose vehicle (SPV) is a legal entity created for a specific purpose. Typically, they're partnerships, joint ventures, or limited liability companies (LLCs) that allow investors to pool their money together for a common investment goal. SPVs are often used to invest in startups, real estate, or other high-risk, high-reward opportunities that may not be suitable for traditional investment vehicles.
One notable example of an SPV investment is the menopause solutions brand that formed a special purpose vehicle in conjunction with three female investors to raise capital and educate women on the topic. The SPV allowed the brand to raise funds from a group of investors who were passionate about the company's mission, while also giving them a way to educate women on the topic of menopause.