A special purpose vehicle pools money from several investors into a single investment: one company, one secondary purchase, one asset. Starting one is mostly a sequence of formation, documentation and compliance steps, and the order matters, because investors cannot sign until the documents exist and the entity cannot invest until they have funded.
If you are still deciding between an SPV and a fund, read Funds vs SPVs: Choosing the Right Vehicle first. This guide assumes you have a single deal in hand.
1. Secure the allocation
An SPV exists to buy something specific, so start with the deal: the company or asset, the amount you can invest, the price, and the closing date the seller or company expects. For a secondary purchase this means the share purchase agreement and any company consent or right of first refusal; for a primary round, the allocation the company has given you. The closing date sets the timeline for everything below.
2. Set the terms
Decide what your investors are buying into:
- The target raise and the minimum investment per investor
- Carried interest, if any, and whether there is a management fee or a one-time fee
- Who may invest: accredited investors only, or a higher standard such as qualified purchasers
- Any share classes with different economics, for example a no-fee class for your own capital
3. Choose the structure
Most SPVs are Delaware limited liability companies. Many are formed as a series of a master series LLC rather than as a standalone LLC, which makes each new vehicle faster and cheaper to set up. See Series LLCs for SPVs for the tradeoffs. You also need a manager for the vehicle, usually an entity you control.
4. Form the entity
Formation means filing a certificate of formation (or establishing the series), appointing a registered agent, obtaining an EIN and opening a bank account in the vehicle's name to receive investor funds.
5. Prepare the documents
The core set is the operating agreement, which sets out the economics, the manager's authority and how proceeds are distributed, and the subscription agreement each investor signs. Some managers add a short private placement memorandum describing the deal and its risks. Standard templates are fine for most deals; custom terms mean legal review.
6. Onboard investors
Most SPVs rely on Regulation D. Under Rule 506(b) you cannot advertise the deal and may rely on investors' own representations of accreditation; under Rule 506(c) you may advertise but must verify every investor's accreditation. See 506(b) vs 506(c). Either way, each investor completes KYC/AML checks, confirms their accreditation and signs the subscription agreement.
7. Close
Investors wire their subscriptions to the vehicle's bank account. Once the money is in and the documents are countersigned, the vehicle pays for the investment and receives the shares or interest it bought.
8. File Form D and state notices
A Regulation D offering needs a Form D filed with the SEC within 15 days of the first sale, and notice filings (blue sky filings) in the states where investors live, each with its own deadline and fee. See Form D and blue sky filings.
9. Keep up after closing
An SPV is a partnership for tax purposes, so it files a return and sends each investor a Schedule K-1 every year until it is wound down. It also owes Delaware's annual tax and any state renewals, and when the investment exits, the proceeds are distributed under the operating agreement.
How long it takes
With standard documents and an existing master series, formation and setup can be done in a day; the raise then takes as long as your investors take to sign and wire. Custom documents, a new standalone entity or a rush closing all add time.
Doing it with Capital Company
Capital Company handles steps 3 through 9: formation, documents, a private deal page where investors complete KYC, accreditation and electronic signatures, the bank account, closing, Form D and the K-1s. You can start from the SPV platform, see pricing, or describe your deal to ChatGPT or Claude and have Capital Company's assistant set it up (how).
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation. Capital Company is not a law firm and does not provide legal advice.