Why This Model

The catalog and book build model is a deliberate design choice, not an accident of implementation. This page explains why Vex structures deals the way it does and what tradeoffs that creates.

Demand driven deal formation

Traditional private market funds start with a GP selecting companies and raising capital against that thesis. Vex inverts this. The catalog presents hundreds of companies. Investors signal interest by starring and browsing. When an investor commits $1M or more as an anchor, SPV formation begins. Real capital triggers deal formation, not a fund manager’s conviction.

The result: the market surfaces what is worth structuring. Companies that attract capital get funded. Companies that do not attract capital do not consume resources. There is no portfolio construction committee deciding what belongs in a fund.

Transparent pricing

In a traditional secondary transaction, price is negotiated bilaterally with significant information asymmetry. The seller knows more than the buyer about why they are selling. The broker takes a spread. Settlement takes weeks.

In a Vex book build, every qualified investor sees the same demand curve. Bids are binding. The clearing price is uniform: every filled investor pays the same price. No one overpays relative to their peers. The price reflects aggregate demand, not one counterparty’s negotiating position.

The clearing price is set by investor demand, not by audited financials or independent valuation. Private company valuations are subjective. Investors should conduct their own due diligence before committing capital.

Cost structure

The fund charges a 1% annual dilution fee, accrued quarterly as unit issuance. This is not a cash charge to investors. Vex Securities charges a 5% seller commission on equity acquisitions, paid by the selling shareholder. There is no carried interest and no management fee.

The industry standard is 2/20: a 2% management fee compounding annually regardless of performance, plus 20% carry on gains. A $100M fund at 2/20 costs investors $2M per year in management fees before any performance. The same exposure through Vex costs $1M per year in dilution, with no carry.

The 1% dilution reduces each investor’s proportional ownership over time. This is a real cost, not a fee waiver. Investors should evaluate whether continuous liquidity and price discovery justify that annual dilution relative to a traditional fund structure.

Regulated infrastructure, not a fund

Vex is three regulated entities operating a platform. Vex Securities (FINRA/SIPC broker dealer, CRD #317371) operates the ATS. Vex Capital (exempt reporting adviser) manages SPVs. Vex Registry (SEC registered transfer agent) maintains ownership records.

Each Series SPV is a separate fund with its own investors, holdings, and economics. The infrastructure is standardized across all of them: one legal template, one compliance framework, one trading venue.

What can go wrong

There is no guarantee of secondary liquidity after the seasoning period. Execution on the CLOB depends on counterparty availability at an acceptable price.

Units are subject to a 12 month seasoning lockup (or shorter with Form 10 registration). During this period, investors cannot sell.

Capital is at risk. The SPV may partially deploy or fail to deploy entirely, resulting in a scaled allocation or a full refund. Partial deployment means the fund holds cash alongside equity, diluting exposure to the target company.

Catalog research is informational and does not constitute a recommendation to buy or sell any security.

Each SPV holds equity in a single company, concentrating risk. If that company fails, the SPV’s units may become worthless. Investors seeking diversification must allocate across multiple Series independently.

This document is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Investing in private market securities involves substantial risk, including the possible loss of principal. Past performance is not indicative of future results. Liquidity depends on counterparty availability and is not guaranteed. Neither Vex Securities nor its affiliates facilitate the sale of tokenized units or make recommendations related to their use. Securities offered through Vex Securities LLC, Member FINRA/SIPC.