"Buying units of the SPV means [VCs] won't own shares in the actual company; they'll technically be an investor in another investor's fund," Javier Avalos noted, highlighting a critical point about the nature of SPVs in investment.
"Some SPVs are commanding premium prices, with examples showing marked ups of 30% over prior fundraising values," Avalos mentioned, pointing to the growing trend of overpriced SPVs.
"The secondary market allows existing stakeholders to sell shares, but many VCs face restrictions, which leads to increasing reliance on SPVs to access these opportunities," Avalos explained, giving context to the market dynamics.
"This SPV trend signals a bubbling excitement around AI startups, with their value causing some investors to speculate heavily on ownership through these vehicles rather than direct investments," he added, framing the larger market implications.
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