Glossary

Special Purpose Vehicle

A Special Purpose Vehicle (SPV) is an investment vehicle (company) created to receive funds from one or more investors when an investment cannot be made directly by the fund or the investors.

Feb 8, 2025alejandro-gonzalezredwood-ventures

What is an SPV (Special Purpose Vehicle)?

A Special Purpose Vehicle (SPV) is an investment vehicle (company) created to receive funds from one or more investors when an investment cannot be made directly by the fund or the investors.

Typically, this investment vehicle is used by angel clubs to group all investors into a single entity, making it easier to manage the cap table for the startup.

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Startup

A startup is an innovative company designed to grow exponentially and scale across multiple markets. In its early stages, it will face considerable uncertainty about the ideal product and business model to support that growth and scalability.

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Accelerator and incubator

A business accelerator helps other companies grow in their early stages. An incubator, on the other hand, supports projects at the idea stage and helps them turn that idea into a product.

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Annual Recurring Revenue

Annual Recurring Revenue, or ARR, means annual recurring revenue. It is the total amount of predictable, recurring revenue a startup generates from its customers each year.