Why does my fund have to make an investment in a target company through another SPV?

Why Sydecar's Fund+ uses a Target Company SPV

There are two main benefits to running your fund’s investment through an intermediate SPV, called the “Target Company SPV”:

  1. Permits the participation of co-investors on a deal-by-deal basis, while maintaining a single line on the Target Company’s captable. 
  2. Facilitates the liquidity of your fund assets (on a deal-by-deal basis)

By routing your fund’s investment through an intermediate Target Company SPV, you may allow investors who are not members of your fund to participate on a deal-by-deal basis. This will increase the flexibility of your fund to attract investors with different investment preferences. Your co-investors will be members of their own Co-Investor SPV, where you will also have the ability to set economics (management fee/tiered carry) specific to your co-investors.