Perhaps the so-called "dumb money" isn't so foolish after all. In the past two years, Silicon Valley has seen a surge in Special Purpose Vehicles (SPVs) promising individual investors access to shares in hot private startups like OpenAI and Anthropic. Historically viewed as a potential path to losses for retail investors due to high fees and sometimes questionable claims about share ownership, these products might ultimately prove to be shrewd investments, thanks to a potential initial public offering (IPO) by SpaceX. If capital markets eventually value SpaceX at $1.25 trillion—a figure Elon Musk recently suggested the aerospace company could be worth after a merger with xAI—it would represent a tenfold increase from its $125 billion valuation in mid-2022. This performance would far outpace the roughly 60% gain of the Dow Jones Industrial Average over the same period. These SPVs, marketed to ordinary investors with the pitch of buying into private companies before they go public, carry significantly higher risks than investing in stock index funds. With over 1,000 unicorn companies globally—many born during the 2021 funding frenzy—still remaining private and potentially never listing, related investments could result in a total loss. An Iowa dentist who heavily invested in such "billion-dollar startups" could potentially lose everything. Furthermore, these funds do not provide the public, transparent operational performance information available for listed companies. As noted in a deep-dive report by a colleague at the end of 2024, they also sometimes charge substantial fees. One fund, named Sand Hill Road Technologies Fund—headquartered in Miami, not Silicon Valley—reportedly promoted SpaceX shares to potential investors at $258 per share, nearly double the $135 per share anticipated cost for institutional investors at the time. This premium bought investors a share in a fund that itself invested in another layer of SPV. Even if SpaceX successfully goes public, SPV investors would still be required to hand over 20% of their investment profits. However, the staggering IPO valuation anticipated by Musk and many investors suggests that even ordinary investors entering at a valuation exceeding $100 billion—rather than $1 million—and despite ceding a portion of gains, could potentially achieve the outsized returns often boasted about by Silicon Valley insiders. Max Wolff, co-founder of Systematic Ventures, which advises investors on SPV investments, commented, "There's an entire industry built around hyping all of Musk's projects." But he also pointed out that, in reality, this collective judgment might be paying off, at least for now. In a low-growth environment, these companies "have effectively become steady profit machines." Wolff added that he has observed a shift in the industry's attitude towards SPVs over the years. SPVs were once seen as a way for Silicon Valley insiders to cash out to external investors, but many institutions now view them as a method to raise large sums and compete with strategic investors and sovereign wealth funds. Venture capitalists often "aren't large enough" to write billion-dollar checks on their own. Prominent firms like Thrive Capital, Khosla Ventures, and Menlo Ventures have already established SPVs to participate in massive funding rounds, sometimes reselling shares to their limited partners. Whether capital markets will endorse a $1.25 trillion valuation for SpaceX remains to be seen. But if investors accept this valuation, it is foreseeable that SPV managers will tout this case as a success story for many years to come.