Business
The Late Stage Management Investors Whose SpaceX Stock Vanished Before They Could Cash In
Ram Rupireddy could hardly believe his luck in 2020 when his friend told him about a New Jersey firm pitching investment opportunities in SpaceX and other buzzy privately held companies.
Rupireddy lives in Ashburn, Va., with his wife and two kids and was earning a reliable income as a data engineer at a healthcare company. But he had friends in the Bay Area who had invested early in hot startups, and he wanted in. This was his chance.
The investment firm, Late Stage Management, wasn’t selling actual shares, but stakes in vehicles that it said held them.
Known as special-purpose vehicles, the funds hold shares in private companies either directly or indirectly, by investing themselves in other funds with stakes. The SPVs provide a workaround to the limit on the number of shareholders private companies can have without offering more detailed financials. They operate under few regulations and are supposed to be only for accredited investors, or those whose net worth or income reaches a certain threshold.
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