SPV Brokers Sell Pre-IPO Shares in SpaceX, OpenAI, Anthropic

Ordinary investors can purchase interests in private shares of OpenAI, Anthropic and SpaceX through special-purpose vehicles, though the shares themselves remain restricted. Between the investor and any future public offering sit multiple layers of brokers and administrators, each collecting fees.

In 2020, former Morgan Stanley trader Adam Crawley received a LinkedIn message from Noel Moldvai about trading pre-IPO shares. The two founded Augment in Austin, Texas, in February 2022. Crawley stated that Augment’s assets, almost entirely pre-IPO shares, grew from under $200 million to more than $1 billion in the past twelve months.

SPVs pool capital from multiple parties into a single legal entity that holds shares or interests in other SPVs. Each layer can charge management fees and carried interest. Sim Desai, CEO of Hiive, estimated that SPVs hold hundreds of billions of dollars in private venture-backed companies.

Morgan Stanley acquired EquityZen in January. AngelList has collected an estimated $200 million in SPV formation fees. Sydecar, a Houston-based administrator, reported assets under administration rising from $3.5 billion six months ago to $5.5 billion.

Investors may pay upfront access fees between 5 percent and 18 percent in addition to standard 2-and-20 compensation structures. Sydecar said its SPVs take an average of 12 percent of profits. Transfer restrictions imposed by companies such as Anthropic, Anduril and OpenAI mean SPV participants may never hold shares directly.

Lawsuits alleging fraud or improper formation are already moving through courts. The article notes that some vehicles have misrepresented access to shares.