You might be surprised how many people already own a piece of SpaceX, even though Elon Musk's rocket company hasn't done a traditional IPO. The secret is special purpose vehicles, or SPVs, which have become a popular way to invest in high-profile private companies.
SPVs are essentially investment funds created specifically to hold shares in a single private company. They pool money from multiple investors who want exposure to companies like SpaceX but can't access them directly. It's like a group buy for startup equity.
This matters because it's changing how private companies stay private longer. Instead of going public to give early employees and investors liquidity, companies can use SPVs to create a secondary market. SpaceX has been particularly active in this space, allowing select investors to buy in at various valuations over the years.
The catch is that SPVs typically require accredited investor status, meaning you need a certain net worth or income level to participate. They also come with higher fees than traditional investments and less liquidity than public stocks.
For AI professionals watching how tech companies manage their capital, this trend is worth understanding. Many AI startups are following the same playbook, staying private longer while using SPVs to manage stakeholder liquidity. It's becoming the new normal for high-growth tech companies.
