# SPV (special purpose vehicle)

A company formed to hold one acquisition and nothing else besides it.

It is how gap equity usually arrives in a self-funded deal. Instead of ten investors on the operating company's [cap table](https://searchspheresource.com/glossary/cap-table), they subscribe to one entity that owns the shares, which keeps the lender underwriting a single clean borrower and keeps the [searcher](https://searchspheresource.com/glossary/searcher) managing one investor relationship instead of ten. It also sets where the waterfall lives and who signs what at closing.

In numbers: Nine investors put $300,000 into an SPV that holds the buyer's equity; the lender sees one borrower and one guarantor rather than a cap table it would have to diligence.

Source: https://searchspheresource.com/glossary/spv
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