SPV vs direct purchase vs fund in pre-IPO investing

By Unicorn Private Research. Published and last updated 2026-09-20.

Key takeaways

Direct ownership avoids fee layers but needs company approval and legal capacity.
An SPV pools investors into one entity that holds shares of a single company, usually with fees and carried interest.
A fund diversifies across companies but adds its own management fees.
Each layer can change what information and rights the end investor receives.

Three structures are commonly used to hold pre-IPO shares. The choice affects cost, control, information rights and how easily an investor can exit.

	Direct purchase	SPV	Fund
What the investor holds	Shares registered in its own name	Interest in an entity that holds the shares	Units in a portfolio vehicle
Diversification	None, one company per deal	None, one company per SPV	Several companies
Typical fee layers	Advisory or sourcing fee, if any	Management fee and carried interest at SPV level	Management fee and carried interest at fund level
Company approval	Required for the transfer	Required, and often for the SPV itself	Handled by the manager
Information rights	As a shareholder, subject to agreements	Usually indirect, through the SPV sponsor	Usually through manager reports
Main risk	Transfer blocked or delayed	Fee stacking and dependence on the sponsor	Manager selection and fee drag

Ticket size: SPVs let smaller tickets reach expensive shares, direct purchases favor large investors.
Cost: compare total fees over the expected holding period, not only the entry fee.
Control: check who votes the shares and who decides when to sell.
Transparency: ask which reports and documents the end investor will actually receive.
Exit: check what happens to the vehicle if the company lists, and how lock-ups are passed through.

None of these structures removes the underlying risks of illiquidity, valuation opacity and possible loss of the whole investment.