A Special Purpose Vehicle ("SPV") is a legal entity created for a specific purpose, including private equity and venture capital pooled investment. While there are many ways to structure your investment funds, SPVs provide a cost-effective and agile funding structure. How are Flow's SPVs formed and structured?
A Flow SPV can be formed as a standalone entity, or as a series entity of a master limited partnership formed in Delaware.
Master-series entities are a unique legal structure with a multitude of benefits. Once the master entity is filed with the state, a series entity can be created under the master by its Series Limited Partnership Agreement without needing to be filed with the state. Effectively, this means you can quickly and simply create separate series entities under the master with which to make investments. Each series entity holds separate assets, operational procedures, liabilities and investment obligations; these exist separate from the master and separate from other series under the master. The master entity does not make any investments, and therefore doesn’t hold assets or incur liabilities. This structure provides a few key benefits:
- Cost savings: Each new SPV under the master entity is formed by the Series Limited Partnership Agreement. This Series LPA is not filed with the state, which means there are no formation or dissolution fees from the state.
- Time savings: Cutting out the requirement to file with the state means a fast turnaround time for forming new SPVs.
- Distinct and separate entities: Each series is its own distinct entity, separate from the master entity and from other series under the master entity, allowing for each series’ assets to be accounted for separately.
Flow takes care of every step of the formation and filing process related to your standalone or series SPVs. For general partners who seek to raise funds at volume, Flow's SPV structures provide significant time and cost savings.
While SPVs are fairly straightforward, the underlying work in forming them can be quite complicated depending on the individual needs of your fund. Flow takes the complexity off your plate and does all the formation legwork for you.
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