In the private secondary market, investors rely on platforms like P2P SHARES to access pre-IPO investments. One of the things that makes this possible are single-issuer SPVs managed by P2P Funds. instruments through which buyers and sellers of private company shares can be connected with enhanced efficiency and structure.
A core benefit of a P2P Shares SPV offering is that it is well-defined and rigidly structured, so that buyers have confidence knowing that the offering’s terms have been verified by P2P Shares. For a seller of shares, it allows them to more efficiently introduce large blocks of shares to the market that may otherwise be hard to liquidate because of the many individual buyers that would be needed to satisfy the purchase of a large block. For a share issuing company, this may also be seen as a benefit because buyers are managed and consolidated by P2P Shares on a company’s cap table, and P2P Shares is a reliable partner to manage the operational burden private share sales require.
If you are new to pre-IPO investing and P2P Shares or just looking to better understand how SPVs come together, this guide will walk you through what single-company P2P Shares fund offerings are, how they work and what both sellers and buyers can expect during the fund offering process.
What is a single-issuer SPV and how does P2P Shares offer exclusive access?
A single-issuer SPV offering is an investment vehicle consisting of shares in a particular private company. It’s initiated by a shareholder (employee or early investor) who is looking for liquidity in their holdings. P2P Shares facilitates the creation of the offering on their behalf.
Unlike in the public market—where shares can be bought or sold instantaneously—private market trades require a more curated and structued approach. That’s where P2P Funds come into play.
The anatomy of a single-issuer SPV offering
A P2P Funds SPV offering typically includes:
- Share class and quantity: Details about the type and number of shares being offered (i.e. common stock versus preferred stock).
- Pricing: Buyers can feel confident that the price will not change with established pricing terms.
- Terms and restrictions: Key information about pre-IPO lock-up periods, rights of first refusal (ROFR), company approval requirements or other transfer restrictions.
- Minimum investment amount: The minimum investment amount for a P2P Funds SPV offering varies by offering; however, it is typically lower than the minimum amount required in a direct trade.
- Expiration date: P2P Funds SPVs has set closing dates and are available on a first-come, first-serve basis for investors. Access priority is determined by the fund manager. And, once purchase documents are signed, buyers usually have a maximum of five days to wire funds..
How single-issuer SPVs offerings are structured on the P2P Shares platform
Here’s a step-by-step look at how offerings are created:
1. A seller indicates interest to liquidate a block of stock
A private company shareholder—typically an early employee, executive or company investor—creates an account on P2P Shares with the intent to sell their equity holdings. After a vetting process, including verification of ownership and review of any applicable transfer restrictions, the seller works with P2P Shares to establish the details listed above and finalize the terms of a P2P Shares fund offering.
2. P2P Shares structures the offering for an exclusive time period
The P2P Shares platform helps structure the offering by gathering key information about the shares and works with the shareholder to establish a firm and competitive price. Considerations often include internally available market data, comparable trades and buyer interest]. Once the details have been ironed out, a listing will be launched to present the offering to investors and institutions.
3. Buyers express interest within set window (usually 1-2 weeks)
Once established, the SPV is presented to a select group of potential investors that have confirmed accreditation status. Interested buyers can review the company’s profile, offering terms and market signals such as highest bid, lowest ask and last matched price. If they’re interested, they can make an offer to buy. Buyers will be prioritized based on timing and the volume of shares desired, so it’s important to consider timely responses and the volume of shares desired when indicating interest.
4. Company approval and transfer mechanics
Some private companies include transfer restrictions in their corporate governance documents. This means that trades can potentially require company approval. Also, if applicable, existing investors may potentially exercise a right of first refusal (ROFR).
5. Settlement and payment
The buyer must fund the escrow account within 5 business days. Upon company approval, the units of the SPV (representing shares in the company) are formally transferred and final documentation is provided.
Key considerations for sellers and buyers
For share sellers:
- Sellers of shares should make sure they understand their company’s transfer policies.
- They should be realistic about pricing. P2P Shares offers data resources derived from indicative price calculated daily for hundreds of pre-IPO venture-backed late-stage companies. However, investor demand ultimately dictates the price.
- Sellers can expect the process to take 45 from offer to settlement, depending on company approval timelines.
For share buyers:
- Do your necessary diligence—P2P Shares offers company data and historical transaction history when available.
- Understand that not all fund offerings will necessarily result in a purchase. Market conditions and company decisions can affect the outcome.
- Be prepared for potential transfer restrictions and approval periods that can potentially delay the settlement of a trade.