Anthropic's Warning to "Investors" | Your Shares Don't Exist
Fraud, grey areas, and investors who don't understand standard equity agreements. So what actually happens to all these Anthropic "investors"?
Brought to you by…Deel
A lot can go wrong when expanding internationally. I’ve made many of those mistakes. So learn from Deel—what they’ve seen doing this thousands of times and in hundreds of different countries.
How should you hire? Contractor, through an EOR, or set up an entity
What are the risks? Compliance, financial, etc
What countries should you hire in? Each country has different rules and risks
Check out Deel’s International Hiring Guide
Insane Demand for Anthropic Stock
Anthropic is on the most insane valuation runs in history. And I doubt there will be anything like it anytime soon…
Anthropic went from $120 billion valuation to an implied $1.4 trillion in ~7 months. The valuation is up 40% in the last 24 days 🤯. With annualized revenue climbing from $100M to $45B in <3 years…
Everyone has FOMO about it. Every investor wants exposure to Anthropic, but there are very few sellers. An expected IPO and insane revenue numbers has sent the valuation parabolic.
Where there is incredible demand, supply will be created. But that supply may be fraud or contractually illegal…
Anthropic’s Warning
Imagine investing in Anthropic over a year ago and seeing your investment increase by 50x+. Your $100K investment (min investment required by the SPV that you invested in) is now worth $5M+ in just a few years. Generational money, right?
Now imagine the investment is deemed voided and you are told you are just going to get your original investment of $100K back (if even that). Ouch!
Well, this is what many folks who thought they were Anthropic investors are wondering right now…
Anthropic sent a blunt warning to anyone trying to get equity access before their IPO. OpenAI did something similar as well this week.
Anthropic even took the warning a step further and publicly put 8 firms on a shame list. Anthropic said that if you bought from these firms, your shares are not valid…
Anthropic secondary investors are nervous, but especially those who got exposure through these firms.
A lot of people on social media said they were shocked and “how could Anthropic do this?”
What I am shocked about is the number of people who are shocked about this. This is very very standard amongst private companies... Clearly a lot of folks haven’t read their equity agreements.
Nontransferability and the “ROFR”
Nontransferability Clause
Investors and employees that are granted equity (stock options or RSUs) of a private company have a “Nontransferability” clause. Below is a very standard clause in a company equity plan:
No Option share shall be assignable or transferable (including arrangements that transfer any of the economic consequences of ownership of Option). Any transfers in violation of the foregoing shall be void.
Not voidable….but void. The distinction matters.
Void vs. voidable: A voidable contract can be enforced until one party elects to cancel it. A void transaction never legally exists at all. You can’t ratify it retroactively, or enforce it in court. If Anthropic’s board didn’t approve the transfer, you simply do not own shares, regardless of what paperwork you signed or what you paid.
And here is what Anthropic said about secondaries:
Any sale or transfer of Anthropic stock, or any interest in Anthropic stock, that has not been approved by our Board of Directors is void and will not be recognized on our books and records.
The ROFR
Every private company has a ROFR (right of first refusal) provision in their equity plans.
Sellers must give written notice to the company with:
real offer from an investor to purchase
potential buyer’s name and information (to make sure it’s legit)
details of the offer (# of shares, price, terms, etc)
Company typically has 30-60 days after receipt of offer notice to elect to purchase the shares at the same price and terms.
If the company (or nominees) doesn’t elect to purchase then seller can sell the shares to the buyer at the stated price or higher (but not lower). They usually have a set period for the transaction to close (like 60 days) before they have to go through step 1 and step 2 again.
*Note - Anthropic’s message implies that sale of their stock must actually be approved by the board, which is much more strict than the typical process of a company nominee just letting the ROFR period lapse.
Anthropic Specifically Banned SPVs
What is a Special Purpose Vehicle (SPV)?
An SPV is a temporary investment entity. It is usually formed as an LLC and it is created for one specific deal, so a bunch of investors can pool money together and show up on a startup’s cap table as one line item instead of 50.
SPVs aren’t necessarily bad. There are many single layer SPVs, that work well for both the company and all the investors.
But when there are multiple SPV layers (and SPV buys into another SPV which buys into another SPV)….that’s when it often starts looking like a scam. Fees on top of fees on top of fees.
Anthropic stated that they have specifically banned SPVs....
We do not permit special purpose vehicles (SPVs) to acquire Anthropic stock and any transfer of shares to an SPV are void under our transfer restrictions.
Even if someone did acquire shares legitimately, transferring them into an SPV is itself a transfer requiring board approval. The chain of approvals required makes most SPV structures non-starters. Companies generally hate them (at least CFOs and legal does) because it creates a compliance and cap table management headache.
Most equity agreements have mechanisms to block SPVs. Again, not all SPVs are bad but it’s important for companies to be in control what SPVs they accept and when.
SPVs Were Used in the FTX Bankruptcy Sales
One confusing part that Anthropic doesn’t seem to acknowledge is that apparently a lot of SPVs bought Anthropic stock via the FTX bankruptcy.
When FTX was going through bankruptcy, it sold $1.3B worth of Anthropic stock. Most of this was sold to SPVs who got the appropriate ROFR waivers…
The list of SPV buyers is publicly disclosed as part of FTX court records from the bankruptcy. Here are some of the Anthropic’s largest SPVs that should be legit since they apparently had Anthropic board approval.
The problem with these SPVs came immediately after though:
FTX sells shares via court-approved process to SPVs→ legitimate
Many of those SPV buyers then sold LP interests downstream to retail/family offices → void under Anthropic’s policies
Those second layer SPV buyers then sold LP interests again (3rd layer) → void and likely very insane fees.
Why Do Companies Have These Rights?
Companies have transfer restrictions and ROFRs for a few reasons:
Keep the cap table clean. Less people to manage and deal with in a potential future exit. Companies don’t want unknown investors, competitors, etc. Messy cap tables delay IPOs and M&A…
Compliance nightmares. Section 12(g) creates strong incentives to limit secondaries and SPVs because tripping certain thresholds creates A LOT more compliance and unwanted disclosures. Every founder/finance leader should know these rules.
Prevent 409a issues. If pre-IPO shares are freely traded in the market then the 409a price will likely have to take those into account. Then the 409a price for new employees (and additional grants) is a lot higher. So these employees get screwed because there is less upside for them because of the secondaries.
Prevent fraudsters or major grifters being associated with them. These contractual rights and the blunt warning hopefully will deter potential investors from getting scammed. No company wants scams associated with them. It looks bad and it often creates a distraction (and often legal work).
Take advantage of undervalued shares. They think the price the seller is getting is cheap so the company (or their investors) want to take advantage. Note - this is a potential side benefit but the prior reasons are the most important.
What Actually Happens to Investors’ “Exposure” in Anthropic ?
The IPO will expose the pure frauds versus those that have stepped into a more grey area. Most of the grifters are operating in the grey, but there 100% is fraud out there in many deals.
Fraud (no contractual exposure): Seller doesn’t actually have contractual exposure (regardless if technically voided because of rules) or their exposure doesn’t cover what they promised. When Anthropic IPOs, the seller can’t deliver the massive paper return that was promised because there are no actual underlying shares/exposure. So the buyer sues. Securities fraud, wire fraud, etc. Send these guys to prison!
Grey Area (has exposure but broke contractual restrictions): There are a couple of practical options here:
It is just quietly settled post IPO once seller gets the cash. Anthropic doesn’t know about it or doesn’t want to try to intervene. This is what usually happens.
Seller (with actual shares) gets greedy. They find out that the agreement they entered into with a sketchy SPV manager is technically void and think they hit the lottery. “Sorry I guess our transaction is void so I’ll give you your investment back, but I keep the 100x return” over the past couple of years.
Legit secondary: Congrats! You are rich and don’t have to be nervous.
Note - While many grifters have multiple SPV layers and insane fees, they aren’t outright fraud. Just deeper into the grey area. However, many of big grifters are probably the same folks who would make misrepresentations and commit fraud.
Final Thoughts
Anthropic and OpenAI’s blunt warnings are mostly a CYA before an IPO.
These companies (and several other hot private companies) have seen a lot of these shadow secondaries/transfers. Not outright fraud but deep into the grey and void under their equity agreements.
Anthropic has to put out these messages to clearly condemn these transactions so it doesn’t blow up a bunch of compliance stuff, create a ton of legal work, delay an IPO, etc.
Anthropic is not going to spend legal resources on chasing these transactions down. As long as they can claim they are legally void and doesn’t impact its cap table, there is no real incentive for Anthropic. It’s great to see bad actors called out though.
Until the IPO, many secondary investors in Anthropic and OpenAI are going to be sweating a bit about whether they actually get the cash. The vast majority will settle without Anthropic, but the IPO will surface the fraud…
Footnotes:
Check out this International Hiring Guide from Deel if you are looking at expanding internationally. It’s an excellent resource.
If you are in finance/accounting then check out my new newsletter (CFOpilot).
*nothing contained in this post is legal, tax, or investment advice
Good summary. The Section 12(g) issue is the big one that I haven't seen in most analyses. Crossing the 2,000 shareholder threshold requires a company to start filing SEC reports, effectively "going public" before the IPO. No company wants to do this.
The SPVs create a big issue here because (generally) the 2,000 shareholder count looks through SPVs and other entities to the individuals with ultimate financial interest in the shares, which makes shareholder counting impossible.
I expect that a primary driver of these announcements is creating a defensible position that Anthropic and OpenAI are under the 2,000 shareholder threshold if/when the SEC comes knocking. I'm sure the clean cap table is also part of it, but for internal purposes they can just ignore anyone who's not on the cap table.
The five-market valuation spread on Anthropic ($380B primary to $1.4T on some secondary platforms) always implied that the different markets were trading different things. This piece confirms it. The primary round investors own equity with governance rights, information access, and pro-rata protections. Some secondary buyers own synthetic instruments, SAFEs, or structured products that give economic exposure without actual share ownership. Same ticker, completley different legal claims.
The market is pricing "Anthropic exposure" as though its fungible across platforms when its structuraly not. A share purchased in the primary round at $380B with board information rights is a fundamentaly different asset from a tokenised instrument at $1.2T with no governance, no information, and potentially no legal claim on the underlying equity. The 3.7x price gap between those two isnt just a price discovery failure. Its a product disclosure failure. The buyers at the top of the range may not understand what they actually purchased until the IPO forces a single price and a single legal structure onto every holder simultaneously.
The IPO is when this resolves and it wont be gentle for everyone.