Understand the Terms When You Trade SpaceX Private Shares

A simple guide to “6 / 2 / 20” and what it really means

Disclaimer

This article is for educational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities.

The insights shared here are based on explanations from one of my brokers, Ben, who breaks down complex private market structures in plain, simple language. This content has been further organized and edited with the assistance of AI for clarity.

Why This Matters

When investors explore private opportunities like SpaceX, one of the most confusing parts isn’t the valuation — it’s the fee structure.

You’ll often see something like:

"3/0/0","5/1/10" ,or "6 / 2 / 20" (2/20 most common)

Many investors ask:
“Is this expensive?”
“What am I actually paying?”
“How does this impact my return?”

Let’s break down the most common 2/20 term in plain English.

What “6 / 2 / 20” Actually Means

This is a standard way to describe how a private investment vehicle (fund/SPV) charges fees.

1. 6% — One-Time Subscription Fee

• Paid upfront when you invest
• Typically goes to the broker-dealer or placement platform
• Example:
  • You invest $100,000 → $6,000 is a one-time fee

In conclusion: Think of this as an access cost to the deal

2. ~2% Annual Management Fee

• Charged every year
• Paid to the underlying fund manager and/or second layer fund manager (Who sells the shares, maybe a VC or a captable player)
• Covers:
  • sourcing deals
  • structuring and managing the vehicle
  • ongoing reporting/distributing when exit
  • and yes, the cost of access to opportunities most investors simply can’t reach

Example:

• $100,000 investment → about $2,000 per year

In conclusion: Think of this as an ongoing management cost

3. 20% Carry (Performance Fee)

• Only charged on profits
• Paid when the investment exits (IPO, acquisition, liquidity event)
• Paid to underlying fund manager and/or second layer fund manager.

Example:

• Invest $100,000 → grows to $200,000
• Profit = $100,000
• Carry (20%) = $20,000

In conclusion: Think of this as a “success fee” — you only pay if you make money

Why These Terms Exist in Private Markets

Unlike public stocks, private shares (like SpaceX) are:

• not freely tradable
• Often require negotiated secondary transactions
• involve legal, compliance, and structuring complexity

Because of this, investments are typically accessed through:

• SPVs (Special Purpose Vehicles)
• private funds
• secondary brokers

These layers introduce cost — but also enable access.

Is 6 / 2 / 20 Expensive?

Short answer: Yes and No

In private markets:

• 2 / 20 is a long-standing hedge fund standard
• 6% upfront is more specific to:
  • brokered private deals
  • secondary transactions
  • allocation-based access

What matters more is:

• entry valuation
• quality of the asset
• access to scarce allocation

👉 A lower fee on a bad deal is still a bad deal
👉 A strong asset with limited access often comes with a cost

In 2026, I was genuinely surprised to see investors willing to pay 10%+ in access fees just to get into certain deals.

But that’s the reality of today’s private markets —
we’ve already seen this happen in recent Anthropic transactions.

What Investors Should Focus On

Instead of only looking at fees, experienced investors usually evaluate:

• Valuation vs. recent transactions
• Liquidity timeline (IPO expectations)
• Share type (common vs preferred exposure via SPV)
• GP track record
• Structure transparency

Fees are just one piece of the equation.

Simple Example (All-In View)

Let’s say:

• Investment: $100,000
• Term: 6 / 2 / 20
• Hold: 3 years

Costs:

• $6,000 upfront
• ~$6,000 total management (over 3 years)
• Carry only if profitable

👉 Total cost depends heavily on performance

Final Thought

Private market investing — especially in companies like SpaceX — is less about “cheap vs expensive.”
and more about:

access + structure + long-term outcome

Understanding the terms helps you make better decisions — and avoid surprises.