Investing in Private Companies: A Guide to the Structures

You buy shares in the company and your name, or your entity, is recorded on the company’s capitalisation table. You are the registered holder of the actual security, with no vehicle standing between you and the shares. It sits here as the reference point rather than a realistic option for HNWI and family offices: minimums typically start around $1m and climb far higher for sought-after names, set by the company through transfer restrictions and rights of first refusal. In a genuine principal-to-principal purchase there is no carry, nobody manages your money, only a transaction fee.

Direct ownership gives the cleanest possible position: the shares themselves, the shareholder rights of your class, an unbroken chain of title, and no ongoing management fee. What you give up is access and ease. The high minimum excludes most investors, company approval is not guaranteed, and you bear the transfer friction — ROFR, approval, legal process — yourself.

One caution to carry into everything that follows: “direct” could be just a marketing word, not a legal one. On marketplaces you will see deals labelled “direct” at almost any cheque size. A “direct” deal at $25,000 is far more likely to be a single-asset SPV or a syndicate in which a lead takes carry. The label tells you how it is sold; only the documents tell you what it is.

A Special Purpose Vehicle, usually an LLC or LP, that holds shares in a single company. You do not buy the shares; you buy a membership interest in the vehicle, and the vehicle owns the shares. Single-layer means exactly one link stands between you and the cap table: the transfer of shares into the vehicle. If that transfer was board-approved and valid, your chain of title is intact.

Minimums typically run $25,000–$50,000: the whole reason SPVs exist is to pool many smaller cheques into one block large enough to clear a transfer the company will approve. Access is reasonably broad, the manager handles the vehicle, the reporting, and the ROFR on your behalf, and marketplaces carry SPVs for roughly the hundred most sought-after names (though not always the very top of the list, which is why trophy-name access sits in the middle). Access is also time-boxed: an SPV is open for subscription only while it is being assembled, usually a few weeks, not continuously, so a given deal is a window, not a standing offer. And you are largely locked in: reselling an SPV interest is difficult, so in practice you wait for an IPO or acquisition.

The costs are the catch. In its raw, marketplace form a single-layer SPV can carry hidden fees, markups embedded in the entry price, and layers you cannot see, which is why the reliable test is to compare the price you are asked to pay against the price the vehicle actually paid for the shares. Watch particularly for “0/0” pitches: nobody runs an SPV for free, so a stated zero fee usually means the economics have moved somewhere less visible: an entry-price markup, or a fee at a lower layer.

Mechanically a single-asset SPV, but with vehicles stacked on vehicles: an SPV that invests into another SPV, a syndicate lead’s vehicle feeding another lead’s. Each junction is a separate transfer that must itself be valid and recognised, so the chain of title lengthens and the risk multiplies: if any single link is void, everything above it is empty.

What the extra layers buy is usually deeper syndication and a slightly lower ticket. What you pay is transparency and title. Fees compound layer by layer, and each junction is another link in the chain of title: one verifiable link is the cleanest a mediated structure gets, and each additional link is another place the chain can break, most consequentially at the IPO, when the register is finally reconciled.

A single-asset SPV, but structured by a platform that stands behind it rather than merely hosting a third-party listing. Curation is a specific claim: the platform has done due diligence on the underlying and the deal; the seller is disclosed, or the platform is itself the seller acting as principal; and the full economics, ownership, and legal terms are shown before you commit.

That is what a curated SPV buys you over a raw one — transparency and a clean, verifiable chain of title — and it is a meaningful improvement in exactly the area where marketplace SPVs are weakest. It is not free, and it is not everything. The universe is materially narrower than an open marketplace, there is generally no price negotiation, and for hard-to-source tickets the price can run well above institutional levels: transparency lets you see the price, it does not guarantee a better one. While some platforms facilitate resale, you remain closer to locked-in than freely transferable.

What a curated SPV still lacks, and what the digital family adds, is genuine transferability and, in the multi-asset case, diversification.

A token representing an interest in a single company’s shares, typically a tokenised depositary receipt over an SPV that holds the shares. The promise is appealing: no minimum, 24/7 trading, instant settlement, real-time pricing, and often a clean one-time fee with no carry. What the token usually gives you, though, is the right to request redemption for a stablecoin, indirect economic exposure. Tokens are sold on crypto platforms, not dedicated secondary platforms.

Two structural problems deserve heavy weight. First, you often do not know who the seller is, which means even less disclosure than a normal SPV. Second, and this is the one that matters, the token can only be as valid as the SPV beneath it, and the SPV only as valid as the transfer that put the shares into it.

The tradable universe is narrow and shrinking, too: in practice tokens exist for only the five or six most in-demand names.

A hybrid: the structure we at LBX Pro built to capture every advantage at once: the chain of title of a single-layer SPV, the diversification of a multi-asset vehicle, the transparency of curated mechanics, and the transferability of tokenisation.

It is a curated, disclosed, board-recognised position that is then digitalised for transfer. You are accessing a properly-held asset through a digital layer, not holding a digital asset that floats free of its title. That distinction is the whole point: it keeps the chain of title intact while adding the two things a curated SPV cannot offer: genuine transferability and, in its multi-asset form, diversification across a basket rather than a single name.

Accessibility is moderate, not instant: tickets start around $25,000 and baskets open in defined sale windows rather than trading continuously, so this is not the no-minimum, always-on profile of a raw token.

What you get in return is the combination the rest of this guide treats as rare and usually suspect: transferability and sound title together. As always, the label is only as good as the curation behind it; the count-the-links and verify-the-title tests apply here too.

A different model entirely. A feeder-fund platform pools investor commitments into its own vehicle, which invests into an underlying fund, a private-equity or venture-capital fund run by an established manager, which in turn holds the portfolio companies. What you are buying is access to a fund manager you otherwise could not reach, not exposure to a single named company; you are two layers removed from any company.

Tickets are tiered and below institutional norms — often from around €50,000 for diversified products, €100,000 for a single feeder — and usually restricted to professional or suitable investors. The strengths are real: access to blue-chip managers below their normal minimums, a curation layer, capital-call efficiency (you commit but pay in over time), and clear, tiered fee disclosure on the better platforms. The chain of title is sound — the feeder is typically segregated and independently administered, a real interest in a regulated fund — so this is mediation, not title risk.

The drawbacks are a double fee layer (the platform’s fee sits on top of the fund’s own fees and carry), mediated rights (you are an investor in the feeder, not a direct LP), and deep illiquidity: a ten-year-plus horizon, with any secondary liquidity subject to demand. It is fund exposure, not company exposure: the wrong tool if your objective is a stake in a specific named business.

A fund holding a portfolio of private companies, itself listed on a public exchange — or, in a related form, a passive vehicle tracking an index of the largest private companies through a bankable wrapper. You hold it like any listed security: the ticket is the price of a share, no accreditation required, and the shares trade daily, giving genuine daily liquidity around inherently illiquid assets. These vehicles are regulated, file with securities regulators, and publish a net asset value.

The defining risk is a structural one: because the wrapper trades on public sentiment while the holdings are valued only periodically, the market price can diverge sharply from NAV in either direction: a persistent discount, or a premium.