Florida fund manager hits WCEP with fraud suit over SpaceX '0/0' pitch

The lawsuit, Megacap Capital, LLC v. West Coast Equity Partners II, LLC, No. 0:26-cv-61179 (S.D. Fla.), lands at a sensitive moment for the private markets. With a SpaceX IPO reportedly planned for mid-June, advisors steering wealthy clients into late-stage pre-IPO deals are getting a fresh look at what can go wrong when a fund sponsor controls pricing, paperwork, and the cap table all at once.

Megacap Capital, a Florida-based sponsor that runs two feeder funds for SpaceX and a pre-IPO technology company, says in the filing that it was pitched SpaceX shares in 2021 at "$580 0/0" -- meaning $580 a share with no upfront fee and no management fee. According to the filing, that same promise was written into the offering memorandum and operating agreement, which stated the manager would receive no commissions or fees and that the management fee would be 0%. Megacap says it wired $375,260 for the SpaceX position and later wired roughly $4.2 million for the tech deal.