Admin costs cover the expenses to form and operate the SPV for its life.
They cover state registrations as well as record-keeping, tax reporting, and other administrative support for the SPV.
Admin costs are paid by the SPV when the SPV closes and invests into its target portfolio company.
Investors indirectly pay a pro rata portion of the admin costs by virtue of their interest in the SPV.
• SPV is investing into Startup A and raises $1M from investors
• $8k is paid as admin costs to cover the administration of the SPV for its life
• $992,000 will be invested into Startup A