WDIC: Special Purpose Vehicles (SPVs)

What are SPVs?

SPVs, or special purpose vehicles, are companies created for a specific purpose or project. They are often used in startup investment, as they can help to provide funding for a new company or venture. SPVs can be used to raise capital, invest in new businesses, or to manage risks. They are often created by banks or other financial institutions, but can also be created by private investors.

SPVs can be used for a variety of purposes, but are often used to raise capital for new businesses. They can also be used to invest in new businesses, or to manage risks. Often, SPVs are created by banks or other financial institutions. However, they can also be created by private investors.

SPVs usually have a limited life, and are dissolved once the purpose for which they were created has been fulfilled. However, some SPVs may be created as permanent entities.

Why are we talking about finance, Sean?

The use of SPVs has grown in recent years, as they offer a number of benefits. For example, SPVs can help to raise capital for new businesses, or to invest in new businesses without incurring the full risk of the investment. In addition, SPVs can help to manage risks, by segregating assets and liabilities.

SPVs can be an important tool for startup investment. They can help to provide funding for a new company or venture, without the full risk of the investment. In addition, SPVs can help to manage risks, by segregating assets and liabilities.

Startups use Special Purpose Vehicles (SPVs) in late stages to raise debt capital. SPVs are legal entities created to isolate and manage risk. They are commonly used in project finance, securitization, and venture capital.

Debt capital is money that is borrowed and must be repaid with interest. It is a key source of funding for startups. Startups use debt capital to finance their operations, expand their businesses, and make acquisitions.

Startups use SPVs to raise debt capital because they offer several advantages. First, SPVs can help startups obtain financing on more favorable terms than they could get from traditional lenders. Second, SPVs can help startups manage their risk by isolating their assets and liabilities. Finally, SPVs can provide startups with additional flexibility in how they use their debt capital.

Show, not tell

A number of prominent companies who once also were startups have used SPVs over the years to raise capital for their needs. He’s a short list of the ones you might’ve heard of:

1. Apple Inc. — Apple Inc. used an SPV called Braeburn Capital to raise $17 billion in debt capital in 2013.
2. Google Inc. — Google Inc. used an SPV called Google Capital Funding LLC to raise $1.5 billion in debt capital in 2014.
3. Microsoft Corporation — Microsoft Corporation used an SPV called MCPF to raise $8 billion in debt capital in 2016.
4. Amazon.com, Inc. — Amazon.com, Inc. used an SPV called Amazon Funding LLC to raise $16 billion in debt capital in 2018.
5. Facebook, Inc. — Facebook, Inc. used an SPV called FB Funding I LLC to raise $6.5 billion in debt capital in 2019.

What’s innovative?

Well, there’s a number of purely financial new approaches in the SPV landscape, that might be fun for some:

1. The development of new financing structures such as asset-backed securities and collateralized debt obligations.
2. The use of SPVs to securitize a variety of assets including loans, leases, receivables, and even real estate.
3. The creation of hybrid SPVs that combine features of both traditional SPVs and hedge funds.
4. The development of new accounting and disclosure standards for SPVs.
5. The use of SPVs to create “synthetic” portfolios of assets that can be used for hedging or other purposes.

Aside from that, there are companies like Vauban, Odin or Simplify that make it easier for people to raise capital for the early-stage startups through SPVs, and I believe that’s where the market is headed right now. Over the years, we’ll see how SPVs become the new VCs in a way, allowing simple people like yours truly invest in startups more easily, providing both capital and “smart money.”