The trend of selling SPV shares at a premium is emerging, with instances of SPVs holding shares of companies like Anthropic or xAI marking up prices 30% higher than the last fundraising round. While this allows smaller VC firms and investors to potentially reap future rewards, it also poses significant risks. If the startup does not grow significantly in value, or if an acquisition is agreed upon that is not profitable for SPV backers, those who paid a premium for their share of an SPV could face losses.
Key takeaways:
- VCs are increasingly buying shares of late-stage startups on the secondary market, particularly in AI companies, through special purpose vehicles (SPVs).
- Some SPVs are commanding premium prices, which is beneficial for the VC selling the SPV but riskier for the buyers, indicating a potential bubble in AI startups.
- SPV owners have less insight into the financial health of the company, don't have direct voting rights, and don't have the same kind of influence over the company as actual shareholders.
- Investors buying high-priced shares in SPVs are betting that these companies will perform strongly enough to be worth the risk, despite AI seeing lofty valuations with nascent use cases and revenue.