Warehouse Line

A warehouse line is a revolving credit facility extended to a secondary market dealer or fund manager, allowing them to buy pre-IPO shares immediately using borrowed capital, then later "sell out of the warehouse" by syndicating those shares into an SPV or selling to end investors.

The strategy matters because high-demand pre-IPO opportunities often require rapid execution — the seller needs certainty, not a fundraising window. The warehouse enables the dealer to close quickly, then offer the shares to investors at a markup once the deal is done. The interest cost of the facility is typically embedded in the deal's pricing.

Illustrative example: a dealer has a $20M warehouse facility at a 12% annual rate. They buy $5M of shares in a target company, holding them for 60 days while organizing an SPV for retail investors. Interest cost: approximately $100,000 (illustrative, $5M × 12% / 6). They sell the shares into the SPV at a slight markup, covering the facility cost and their spread.

The gotcha: investors buying into warehoused deals have usually already missed the price at which the dealer bought. The dealer's spread and facility cost are baked into the price presented to retail investors. Secondary buyers should compare warehouse-deal pricing to publicly available ATS marks (e.g., Hiive's live order book) to understand how much of a premium they are paying for the convenience of a packaged SPV.