These two structures serve different investor profiles and use cases.
Estonian structure
In this setup, we form an SPV under our non-operating holding company. Investors participate through loan agreements (so-called “participation loans”) rather than taking equity.
Investors do not hold ownership in the SPV (Estonian LLC).
For US-based investors, these are typically not reportable as K-1 investments at the time of investment — only upon exit.
The structure is tax opaque, which can be advantageous or not depending on the investor’s tax residency or vehicle.
Delaware structure
This is the traditional partnership model, mirroring how LPs invest in venture or private equity funds.
Investors hold units or interests in the SPV (Delaware Series LLC).
They must generally report participation from year one (K-1).
The structure is tax transparent, meaning income and gains flow directly to investors as if the SPV doesn’t exist.
In practice, both models are comparable in cost, setup time, and operational complexity. The real difference lies in investor familiarity and tax treatment.
Delaware is more recognized and “institutionally comfortable,” while Estonian offers more flexibility for global investors who value simplicity or prefer deferring tax reporting.
Today, most of our syndications use the Delaware structure.