What is the difference between an SPV and a fund, and why can't we operate as an SPV structure?

An SPV is a non-blind vehicle that contains one deal. A venture fund is a blind pool, the limited partners do not know what deals are going to be invested in, that contains a diversified set of portfolio companies, usually 10 to 25. The fees are normally much smaller for SPVs, which make then attractive to limited partners. SPVs end up being a distraction to venture capitalists looking to set up a venture capital firm, since they are not real venture funds and since the economics are small.