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What is the process for SPV distribution upon liquidity event?

The general process for SPV liquidation:

  • Upon portfolio company liquidity event, SPV is liquidated and cash paid out to investors assuming there is no lockup period.

Reasoning

  • The generally accepted fairest approach to SPV liquidity is for the fund manager to distribute cash to investors upon soonest liquidity event.
  • If the investor would like to rebuy, the investor can choose to buy back on the public market.
  • The nature of an SPV is a single purpose transaction and a way for investors to direct capital into a single investment. If an investor wants to give more discretion upon liquidity events, a fund structure generally is more aligned with fund manager discretion.

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