Anthropic tried to crack down on 'nightmare' investment deals. They're still everywhere.

In a bid to protect its investors and reputation, Anthropic has made strides to eliminate the use of special purpose vehicles (SPVs) in its fundraising efforts. Despite these efforts, reports from Business Insider reveal that SPVs are still being utilized to market shares of the AI startup. SPVs, designed to allow investors to pool resources for singular investment opportunities, have become increasingly controversial. While Anthropic initially accepted these vehicles during early funding rounds, the company began restricting their use last summer as it gained leverage in negotiations. In its latest funding round, valued at $30 billion, the prohibition on SPVs was reiterated, as confirmed by an insider. One recent SPV proposal suggested a staggering $350 billion valuation for Anthropic, mirroring offers from notable firms such as D.E. Shaw and Founders Fund. However, this enticing offer came with significant caveats: investors would be required to pay a hefty 10% management fee alongside another 10% on profits, known as carry. Furthermore, instead of acquiring shares directly from Anthropic, investors would essentially purchase shares from another party, adding layers of complexity to the deal. Kelly Rodriques, CEO of Forge Global, expressed his concerns about these multilayered SPVs. "This is a nightmare. The fees and the deception involved are troubling, especially when the second layer is designed to obscure the situation from Anthropic," he stated. Recent SEC filings indicate that at least two additional SPVs have emerged in recent months, aiming to invest in Anthropic through the Sydecar platform. The implications of using unauthorized SPVs can be severe, potentially leading to voided deals and the return of funds to investors, or even federal fraud charges in more egregious cases. Anthropic has yet to clarify what penalties may apply to investors who attempt to sell their shares through these unsanctioned SPVs. In contrast, Anduril, another company that has distanced itself from SPVs, has outlined stricter terms, stating that any stock sale must first be offered back to the company. Despite the ambiguity surrounding unsanctioned SPVs, a spokesperson from Sydecar defended their use as an efficient method for closing private deals, emphasizing the importance of clear communication regarding terms. While sanctioned SPVs can expedite transactions and broaden access to investors, the demand for shares in hot AI startups like Anthropic has led to a rise in unscrupulous SPVs. Joseph Alagna, founding partner of Buttonwood Funds, noted that the rush to invest before a potential IPO is fueling this phenomenon. High fees associated with unsanctioned SPVs have sparked criticism, especially as many investors may be unaware of the costs involved. Rodriques lamented the prevalence of multilayer SPVs, pointing out that they often lead to higher fees and the risk of not obtaining the intended stock. He even humorously recounted receiving an unsolicited multilayer SPV offer related to Anduril, reflecting the overwhelming presence of such schemes in the market. In light of these developments, experts urge caution and vigilance when navigating the complex landscape of secondary marketplaces, as they can often be rife with misinformation and fraudulent activity.