A private-company name does not tell you what security you are buying. Direct shares, a fund interest and an interest in a special-purpose vehicle can provide very different rights, fees, liquidity and reporting.
Trace the investment chain
Identify the issuer, intermediary, manager, custodian and legal owner of the underlying asset. Determine whether your money funds the company, buys an existing holder’s shares or enters a pooled vehicle. Ask how each participant is compensated.
Read the downside terms
Examine capital calls, transfer restrictions, valuation policies, leverage, redemption limits and conflicts. For credit, understand collateral, seniority and covenant protections. For equity, understand dilution, preference rights and the distribution waterfall.
Fit the commitment to the household
Model a longer holding period and a severe loss without assuming a scheduled IPO or an available secondary buyer. Compare the commitment with existing business and employer-stock exposure. Eligibility alone does not establish suitability.
Four questions for a better conversation
- What exactly will I own, and what rights travel with it?
- How are fees, carried interest and expenses charged across the structure?
- Who determines valuation, and how often can it be independently checked?
- What if distributions arrive years later than expected?
Bring these to the conversation
0 / 4 readyA preparation checklist, not a suitability assessment. Selections stay on this page.
Continue with primary resources
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