By 2030, you can expect nearly every startup’s cap table to feature at least one SPV, and that’s a major win for founders and investors alike.
Cap tables are evolving. Carta reports that SPV formation rose 116% from 2019 to 2024, driven by a wave of early-stage vehicles under $5 million. As startups scale and investor profiles diversify, keeping equity structures clean is no longer just nice to have; it’s essential.
Here’s why the cap table of the future won’t be complete without one: major players like Uber used SPVs to allow Goldman Sachs clients to invest at a $40 billion valuation without crowding its cap table.
In contrast, Twitter used one pre-IPO SPV to let employees sell shares without disrupting the equity structure.
What Is an SPV and How Does It Work in a Cap Table
An SPV (Special Purpose Vehicle) is a standalone legal entity—usually a Pte Ltd.— created to pool capital from a group of investors into a single investment in one startup. SPVs consolidate dozens of individual checks into one clean line on your cap table.
It’s a strategy used by companies like Pinterest, which raised hundreds of millions through SPVs backed by FirstMark Capital and SV Angel, and Twitter, where investors like Chris Sacca and J.P. Morgan used SPVs to build significant stakes without cluttering the cap table.
One San Francisco-based fund manager noted in a TechCrunch report, “I’ve raised seven SPVs in the last 18 months that account for significantly more than my original fund,” underscoring how powerful SPVs can be in scaling capital without crowding the cap table.
Legally, SPVs isolate risk and liabilities that live inside the SPV, not on the startup’s balance sheet, and offer pass-through taxation. Investors become members of the SPV, buying equity in the startup. It works as follows:
- SPV is formed (typically Pte Ltd.)
2. Investors commit capital.
3. The SPV makes a single wire transfer or investment in the startup.
4. The startup’s cap table shows one investor: the SPV.
5. The SPV manager handles compliance, K-1s, voting, updates, and distributions.
A platform like Auptimate handles entity setup, docs, wires, and ongoing management, reducing setup time from months to just days.
Thinking about how an SPV could streamline your next cap table refresh? Book a demo with an expert today.
How SPVs Simplify Cap Table Management for Startups
✨ Decrease investor clutter — One SPV equals one line instead of dozens of investor entries. Investors are streamlined through a single SPV, eliminating individual negotiations.
✅ Boost appeal in follow-on rounds — VCs favour clean cap tables. A clean structure helps avoid dilution surprises and governance delays.
⚙️ Streamline communication, compliance & legal — A lead SPV manager centralises documents, tax forms, voting, and distribution, removing administrative burdens from founders.
Benefits of SPVs for Founders
- Keeps your Cap Table Clean: Consolidates investor shares into one entity, enabling easier management and keeping a tidy ownership structure.
- Reduces Legal Admin & Costs: One agreement instead of many equates to less paperwork and lower fees.
- Boosts fundraising efficiency: Streamlined setup makes closing rounds with angels and VCs easier with fewer hurdles.
- Gives More Operational Flexibility: Having one legal entity makes it easier to sell shares, restructure or raise future rounds.
- Helps Maintain Control: By centralising ownership through an SPV, the involvement of fewer parties means clearer decision-making.
- Navigates Shareholder Limits: Staying under a 50-investor cap in jurisdictions like Singapore, you can pool investors in one legal structure while being compliant without giving up access to capital.
Benefits of SPVs for Investors
- Access: Pool together small checks into deals they’d normally be excluded from.
- Risk Management: Limited liability, one-off investment, and option to diversify across SPVs instead of all-in on a fund.
- Efficiency: One vehicle, one set of docs, centralised ownership tracking and tax reporting.
- Governance & Control: The SPV lead can structure voting or carry it out, providing governance oversight on behalf of all investors.
The Future of SPVs in Cap Table Management
SPVs are transitioning from a tactical workaround to a foundational element of cap table hygiene. Over the next five years, they will enable VCs to spin off shares in hot startups via SPVs aimed at smaller investors, creating an efficient secondary market for popular deals.
Both institutional and non-institutional investors will utilise SPVs as sidecar vehicles or co-investment channels to introduce additional capital into follow-on rounds or specialised deals. Cap table and fundraising platforms already recognise this shift.
Within two to three years, using an SPV for non-VC rounds will be so standard that the term “SPV” will be perceived less as a special tool and more as a default cap table component.
Counterpoints & What to Watch
✔ Investor friction: Some prefer direct investment to avoid tax filings or governance limitations.
✔ Governance challenges: Well-defined terms (voting, carry, pro rata rights) must be in place.
Mitigation includes being transparent and sharing SPV terms upfront, using experienced SPV leads or service platforms, and communicating clearly with both founders and investors.
Conclusion
SPVs are fast becoming a default tool in the founder-investor playbook. By 2030? Expect every growing startup’s cap table to feature at least one SPV. They deliver cleaner cap tables, speedier financings, broader investment access, and smoother administration.
Want to learn more about how Auptimate can simplify your cap table and fundraising process? Visit our “SPV Solutions” page, book a call or reach out to us at info@auptimate.com.
