A special purpose private equity fund (SPPEF) also called a special purpose private equity investment fund, is a legal entity, frequently a

Limited Liability Company A limited liability company (LLC for short) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a ...

incorporated in the US state of Delaware, but it can be any type of corporation or partnership entity and of any domicile, including sovereign states. It is formed so as to enable a group of investors, usually individuals, to invest collectively in another entity. It is mostly used to enable private investors in early-stage technology companies to pool their resources and invest on the same terms that a traditional venture capital fund would. Such investors are typically referred to as

angel investors An angel investor (also known as a business angel, informal investor, angel funder, private investor, or seed investor) is an individual who provides capital for a business or businesses start-up, usually in exchange for convertible debt or owners ...

. For angel investors investing in technology companies that are involved in sectors that they have been successful in offers an opportunity to make informed bets and to leverage their networks and experience as advisers so as to leverage their intellectual capital as well as their financial capital. However they often face scope and scale issues. Many are limited to relatively small investment amounts, often in the $50K–$250K range. That therefore usually requires investing in very early-stage companies so as to have a relevant investment. They often struggle to maintain their

pro-rata ''Pro rata'' is an adverb or adjective meaning in equal portions or in proportion. The term is used in many legal and economic contexts. The hyphenated spelling ''pro-rata'' for the adjective form is common, as recommended for adjectives by some E ...

investment through subsequent

venture capital round A venture round is a type of funding round used for venture capital financing, by which startup companies obtain investment, generally from venture capitalists and other institutional investors. The availability of venture funding is among the ...

s. Others with more capital to invest fare better but still lack significant leverage. Only the "super angels" can truly leverage their investment and they often lack the time to manage the investment effectively. One solution for angels is to belong to angel investment groups. These tend to be most effective in California. However, there is often a good process for investment presentation, due diligence and placement but not for ongoing management. A key feature of a SPPEF is that it has an external, professional manager. The SPPEF model was originally created by Gramercy Private Equity, however, many organizations including angel groups offer SPPEFs.SPPEF information at Lotus Holding
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References

{{reflist Private equity