Anthony Scaramucci said this own SpaceX stock. Likewise 2 Chainzrapper; Betsy DeVos, former Secretary of Education; and hosts a podcast called “Rich Habits” and over 150 followers.
Elon Musk’s rocket and satellite company is set to hold what could be the largest initial public offering ever, allowing anyone to own shares in it after 24 years as a private firm. So why do so many people seem to be doing it already?
The answer lies in the opaque private equity market, fueled in large part by what are known as special purpose vehicles, or SPVs. These legal entities, which are designed to hold assets such as stocks, have become a popular way to invest in private company stocks because groups of investors can pool money for a single investment.
Founded in 2002, SpaceX is among the private companies for which investors have created the most SPVs, according to statistics from The New York Times. More than 170 such investment vehicles named “SpaceX” or “Space Exploration” have been established, mostly in the past six years, according to filings with the Securities and Exchange Commission. Not all entities that own SpaceX stock include the company in their names.
Now that SpaceX intends to raise more than $50 billion in an IPO as soon as June, it has filled the private market for the company’s stock. Demand for SpaceX stock has been “virtually insatiable,” said Sim Desai, founder and chief executive of Hiive, a website that enables private sales of shares.
The spread of SpaceX’s investment vehicles shows a thriving shadow market for private company stocks and signals the level of interest in owning the company’s stock after it goes public. The vehicles also offer a glimpse of what could happen to two high-profile AI companies — OpenAI and Anthropic, for which investors have also formed SPVs — if they go public as early as this year.
“The US equity growth story is increasingly being told in the private markets, not the public markets,” said Shriram Bhashyam, chief operating officer at Sydecar, which handles the administration side of private equity sales.
Mr. Musk, who is embroiled in a lawsuit against OpenAI in federal court in Oakland, California, and a spokesman for SpaceX did not respond to requests for comment.
Over the past decade, smaller investors have used special tools to back companies including Twitter and Uber before they go public. They became prevalent as startups stayed private longer and raised larger rounds of funding while early investors and employees struggled to cash in.
For many people, owning SpaceX stock before its IPO is bragging rights. Regulators limit who can invest in private companies because the deals can be risky. Companies have the right to approve who owns their shares. Investing in such companies usually requires an “in”, so special purpose vehicles are one way to help investors without it.
Some have praised the boom in private market share trading for democratizing access to lucrative investment opportunities. Others called her ripe for deception.
Investors don’t have access to much information about a private company’s finances or the origin of the stock they buy. Some vehicles can be “stacked”, with one SPV investing in another SPV and so on, with each entity charging fees.
Layers could cause problems. Democrats have raised concerns about Chinese investors who have bought SpaceX through special vehicles and offshore accounts, viewing them as potential threats to national security.
“We are concerned that Chinese investors could potentially gain access to non-public information,” said Senators Elizabeth Warren of Massachusetts and Andy Kim of New Jersey. he wrote in a letter to Defense Secretary Pete Hegseth in February.
Mr Musk, co-founder of digital payments company PayPal, initially funded SpaceX with his own money. He also took on investments from former PayPal associates like Peter Thiel and Luke Nosek of venture capital firm Founders Fund, and friends like Antonio Gracias, who runs Valor Equity Partners.
As SpaceX grew, its investors expanded to include Justin Fishner-Wolfson, a former Founders Fund investor who founded 137 Ventures, and Iqbaljit Kahlon, a former employee of Mithril Capital, one of Mr. Thiel’s investment firms.
Mr. Kahlon started his own investment company, Tomales Bay Capital, around 2016, and Mr. Thiel sold him some SpaceX stock. Mr. Kahlon formed a series of SPVs to buy the shares sawdust of the 2025 lawsuit. The vehicles have made hundreds of millions of dollars and typically charge annual fees of 2 percent, as well as 20 percent of any profits. Mr. Kahlon’s investors included Ms. DeVos, the former education secretary, according to the agency sawdust.
In 2021, Mr. Kahlon fell out with SpaceX. One of the investors in his special vehicles was the Leo Group, a Chinese company that announced a $50 million investment in SpaceX. The announcement startled SpaceX management; the presence of Chinese investors could harm the company’s status as a U.S. government contractor, according to court filings.
Mr. Kahlon kicked Leo Group out of the investment vehicle. The Chinese company was sued in 2022 for breach of contract and fiduciary duty. The judge largely sided with Mr. Kahlon; Leo Group appealed. The lawsuit and SpaceX’s ties to Chinese investors were earlier reports ProPublica.
Mr. Kahlon declined to comment. Leo Group did not respond to a request for comment.
Over time, the number of special vehicles associated with SpaceX increased. SPV investors can sell their holdings to others who could create their own vehicles for backers to buy into. SpaceX shares have spread further from their original owners.
That’s how followers of the “Rich Habits” podcast got into SpaceX. Christian Blackwell and Austin Hankwitz, who run a personal finance podcast and several newsletters, have offered their fans the opportunity to invest in private tech stocks with them through a firm called Witz Ventures.
Last year, Mr. Blackwell and Mr. Hankwitz gained access to several pieces of SpaceX stock, collecting investments from 98 followers in one vehicle worth $724,000 and from 49 investors in another vehicle worth $308,000, according to Mr. Blackwell and securities filings.
The shares come from Witz Ventures’ purchase of special purpose vehicle interests in other special purpose vehicles operated by DataPower Capital, a New York venture firm. DataPower bought the SpaceX stock from another venture firm that David Yakobovitch, DataPower’s founder, declined to name.
Mr. Yakobovitch said he verified that the firm that supplied the shares was listed on SpaceX’s official shareholder list. Avoid investing in vehicles that are more than one tier removed from this list, as each tier charges fees that can add up.
“If it’s a few layers down, it can be a little cloudy,” he said.
Rapper 2 Chainz said on a podcast in March that it bought SpaceX “very soon” through private equity tie-ups. “I was in the right place at the right time,” he said. Mr. Scaramucci, a former adviser to President Trump, he said April that he owned shares of SpaceX through a “private round”.
It is unclear whether Mr. Scaramucci invested through the SPV, and representatives for 2 Chainz did not respond to requests for comment.
Bids to buy SpaceX stock have intensified since news of the company’s IPO broke in December.
In February, Jori Horberg, a partner at venture capital firm Fearless Fund, emailed “friends and family” offering them the chance to be part of a $200 million purchase of SpaceX stock valued at $800 billion, according to a report reviewed by The Times. The investment carried a fee of 6 percent, as well as 20 percent of the profit. Fearless Fund was looking for checks of at least $1 million and needed commitments by the next day.
It is not clear whether an agreement has been reached. Ms. Horberg did not respond to requests for comment.
Start-ups sometimes run into people selling their shares because they wish to have tight control over their shares. They are also concerned about possible fraud. Stripe, a $159 billion private payments company, he warned that “any offer to invest in Stripe that does not come from or through Stripe is very likely a scam.”
From 2019 to 2021, New York-based Vika Ventures raised more than $6 million from 46 investors, promising to take it to private companies, including SpaceX. But the company’s founder kept the money and bought a Corvette Stingray and a Patek Philippe watch, according to the Justice Department and the SEC In 2023 he pleaded guilty for fraud and was sentenced to eight years in prison.
Last year, authorities detained an investor in Sestante Capital for a similar scheme to hoard shares he did not have in private defense company Anduril.
In a recent podcast, Matt Grimm, co-founder of Andurilu, expressed frustration over those who claim to have access to stakes in private technology companies.
“How many investors in America think they own a piece of SpaceX when they’re actually funding their ex-roommate’s friend’s coke habit in Miami?” he said.
Kirsten Grind contributed reporting from San Francisco. Susan C. Beachy and Kirsten Noyes contributed research.
