Fund, holding company or deal-by-deal SPVs: how should you raise?

What is the difference between the three?

• Holding company. Investors buy shares or units in the parent company. The parent owns the operating businesses. Every investor shares in every acquisition.
• Deal-by-deal SPVs. A special purpose vehicle is a separate company formed to own one acquisition. Investors decide deal by deal whether to invest. Each SPV has its own investors and its own results.
• Fund. Investors commit money to a pool before the deals are known. A manager decides what to buy. The fund usually has a fixed life and must sell its holdings to return capital.

The structures can be combined. A common pattern is a holding company that uses SPVs for co-investment in larger deals.

What are the pros and cons of each?

Holding company

• Pro: capital is permanent and can move to the next acquisition without a new raise.
• Pro: results are pooled, so one weak deal does not wipe out an investor.
• Pro: one cap table and one set of shares, which is the shape a listing needs.
• Con: investors must trust your judgment on deals they have not seen.
• Con: liquidity has to be designed, because nothing is sold on a schedule.

Deal-by-deal SPVs

• Pro: easiest to raise without a record, because investors see the deal.
• Pro: investors can match their exposure to their interest.
• Con: you raise again for every deal, often under LOI time pressure.
• Con: separate cap tables make it harder to combine businesses, share costs or list later.
• Con: investors in a weak deal may not come back for the next one.

Fund

• Pro: committed capital lets you move fast on deals.
• Con: hardest to raise for a first-time manager without a record.
• Con: a fixed life forces sales, which conflicts with a buy-and-hold model.
• Con: a pooled vehicle that invests in other companies can raise investment company and investment adviser questions that an operating holding company usually does not. Ask counsel.

Which securities exemptions apply?

All three structures sell securities, so each needs either registration or an exemption. For private companies in the US, the common exemptions are:

• Rule 506(b) of Regulation D. No general advertising. Typically used with investors you already know, mostly accredited.
• Rule 506(c) of Regulation D. General advertising is allowed, but every investor must be accredited and you must take steps to verify it.
• Regulation Crowdfunding. Sold to the public through a registered funding portal, with disclosure requirements and annual limits.
• Regulation A. A larger, partly registered offering with an SEC review. It is used less often for a first raise.

Each has filing, disclosure and state-law conditions. The choice also affects who you can talk to and how. I have prepared more than 30 private placements and 3 Reg CF offerings. The structure and the exemption are best treated as one decision, made with securities counsel.

How does the choice interact with SBA rules?

If deals will use SBA 7(a) loans, the structure must meet SBA's rules on who supplies the equity. As of October 2026, under SOP 50 10 8.1, "limited sources" may supply no more than half of the required injection. Limited sources include passive minority investors holding under 20% in aggregate with no control.

If minority-investor equity counts toward the injection, those investors generally get only tax distributions until the SBA loan is repaid. Owners of 20% or more must guarantee the loan. These rules apply whether investors sit in an SPV or in a holding company, so plan the ownership chart with your lender before you raise.

How does the choice affect a future listing?

A holding company is already the shape a listing needs: one company, one set of audited financials, one class of shares to trade. SPVs have to be combined first, usually by exchanging each SPV's interests for parent shares. That is a reorganization with its own legal and tax work. Investors in a strong SPV may resist trading into a pool.

A listing also needs holders. As of October 2026, the OTCQB requires at least 50 beneficial holders with 100 or more shares each and at least a 10% public float, among other conditions. A holding company raised from a network can help meet the holder count. Listing mechanics are covered at PublicFinancial's public holding company playbook.

Worked example: two deals, two structures

Assume two acquisitions, each needing $250,000 of equity. That is the 10% minimum injection on a $2.5M project. One deal does well and one does poorly. The outcomes below are illustrations, chosen within the ranges the Stanford 2024 search fund study reported: 25% of acquired companies returned 2–5x and 20.5% produced a partial loss.

1. SPV A returns 3x: $250,000 x 3 = $750,000 to SPV A's investors.
2. SPV B returns 0.5x: $250,000 x 0.5 = $125,000 to SPV B's investors.
3. Holding company owning both: ($750,000 + $125,000) / $500,000 = 1.75x to every investor.

SPV investors get a wider spread of results. Holding-company investors get the average. The investors who lost money in SPV B are less likely to fund deal three. The holding company keeps its investors and its capital base.

Where these numbers come from: SBA injection, limited-sources, tax-distribution and guarantee rules are from SOP 50 10 8.1 as summarized by Cantrell Firm and Beancount. OTCQB holder and float rules are from the OTCQB Rules, version 6.1. Search fund outcome ranges are from the Stanford 2024 study as summarized by Smash VC. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026; lender practice under it is still settling and these are secondary summaries, so confirm current terms with your SBA lender.

Related questions

Can I start with SPVs and move to a holding company later?

Yes, but it takes a reorganization. Each SPV's investors exchange their interests for parent shares at agreed values. Plan the exchange terms early, and get tax and securities advice before you promise them.

Is a blind-pool holding company the same as a fund?

Not necessarily. A holding company that buys and operates businesses differs from a fund that invests passively. The legal line matters, so confirm with securities counsel which side your plan is on.

Which structure do first-time buyers usually choose?

Many start with an SPV or a single-deal company because investors can see the deal. If you intend to buy more than one business, consider raising into a holding company from the start.

What comes next

Once the vehicle is chosen, timing decides your position with sellers and investors: should you raise before or after you find a deal?

Related articles

• How do you raise capital for a holding company before the first acquisition?
• Family office, private equity or your own network: who should fund your holding company?
• When should you raise capital: before or after you find a deal?
• Should a second business sit under my company, a sister LLC, or a new holding company?
• How do you build a holding company for acquisitions?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.