What should SPV sponsors reconcile before making a distribution?

A distribution is where vehicle administration becomes economically visible to investors. For sponsors and administrators running single-deal vehicles, co-investments, and club deals, the practical answer is to treat the question as part of entity formation, subscription, investor onboarding, capital movement, tax records, reporting, and distributions, not as a one-off definition. The record should show formation documents, investor allocations, subscription status, KYC files, wire records, side letters, capital accounts, reports, and distribution notices so an investor, lender, counsel, administrator, or operating lead can reconstruct the decision later. The distribution package should tie the bank movement to the waterfall, ownership schedule, reserve decision, and investor notice. The common failure mode is paying cash before confirming whether reserves, withholding, allocation changes, or document-specific distribution rules alter the amount.