A:Special Purpose Vehicles are often setup by business owners and parent companies to secure financing by allowing investors to collectively pool funds in the SPV rather than invest directly in the parent company. The investors SPV funds can then be used for bulk investment in the parent company or to fund associated projects and initiatives.
This model allows investors to collectively invest in large companies as the amount of funds required by each individual investor can be lower as to funding the large parent company directly. It can also help mitigate investment risks in new start-up companies or high risk projects, which is why the model is often popular with entrepreneurs looking to secure risk-averse sponsors and investors.