What is the legal structure of an SPV investment?

Investors in an SPV will be indirect holders of securities in the portfolio company. Investors will not invest directly into the company. Instead, the deal lead will pool the capital into a “special purpose vehicle” (SPV), which will then invest into a company.

SPVs on Sydecar are formed as Series LLCs, a type of company that provides liability protection. Series LLCs are part of a master series structure in which a master LLC is registered, allowing for a large number of series LLCs to be established under the name of the master LLC without additional registration.

Because the master LLC is the only entity that needs to be registered, the master series is more cost-effective (as it avoids the need for annual state fees and registered agent costs). At the same time, because each series will have separate ownership structures, memberships, and operating agreements, the assets and liabilities are insulated from one another.

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