From wire to close: SPV mechanics for first-time sponsors
A first-time sponsor's guide to running an SPV close — what happens between LP wires and the wire out to the portfolio company.
If you're running your first SPV, the close mechanics are usually the part you've thought about least. Here's the step-by-step of what happens between LP wires and the wire out to the portfolio company.
Step 1: finalize allocations
If you're oversubscribed, decide how to allocate. Pro-rata against commits is the most common rule. Document the rule in writing so there are no surprises.
Step 2: chase blocking LPs
Some LPs always slip: missing KYC, mistyped wire, wrong bank coding. A modern platform surfaces who's blocking close in one dashboard — your job is to nudge them.
Step 3: confirm KYC on every LP
Don't close with any LP whose KYC is incomplete. The risk is real — you may need to refund the wire, which is operationally painful.
Step 4: reconcile the bank balance
The SPV's bank balance should equal the sum of finalized LP commitments. Any short or over goes back to the LP. Document everything.
Step 5: authorize the outbound wire
With allocations final, KYC clean, and bank reconciled, authorize the wire to the underlying portfolio company. Most platforms require a dual-signature or two-stage approval before releasing the wire.
Step 6: confirm receipt and notify LPs
Once the underlying confirms receipt of funds, notify your LPs that the deal has closed. Send signed copies of all final documents to the investor portal.