An SPV (Special Purpose Vehicle) is a legal entity created to pool investor money for a single deal.
Here's how SPVs work on Wealt:
Wealt creates a separate SPV for each investment deal
When you invest, your money goes into the SPV - not directly to the company
The SPV holds shares in the company on behalf of all investors
When the company has an exit (acquisition, IPO), returns flow back through the SPV to each investor proportionally
Why this matters to you:
Legal protection: The SPV is a separate legal entity, which means your personal liability is limited to your investment amount.
Simplicity: Instead of dealing directly with the company's legal team, Wealt handles all the paperwork through the SPV.
Clean cap table: The company lists only one investor (the SPV) on its cap table, not dozens of individual investors. This makes things simpler for everyone.
Simple example: Instead of 100 investors individually investing in a startup, the structure becomes: 1 SPV invests in the startup, and the 100 investors own shares in the SPV. This creates operational simplicity for both investors and the underlying company.