Mar 16 2021

Writing about SPACs

Like many people, I’m currently deep in SPACland. I’ve been writing privately about it a lot but have now crossed over into a zone where I feel like writing more publicly about it.

When Jason and I wrote the first edition Venture Deals in 2011, we built off a series of 30+ blog posts we wrote in 2005 about Term Sheets. It’s fun to explore them for historical reference since Jack Bauer plays a major part in the posts.

While these posts were the seed for what is now a book (Venture Deals: Be Smarter Than Your Lawyer And Venture Capitalist), it was also a way for us to think through all the elements of a VC financing, back at a time when there was enormous opacity about how these worked, along with massive information asymmetry between people who did them all the time (e.g., us) and the entrepreneur, who did a few of these over her lifetime.

While the web is a much noisier place in 2021 than it was in 2005, the opacity and information asymmetry around SPACs are remarkably similar to what existed 16 years ago around venture deals.

The cliche “everyone’s an expert, but no one knows anything” applies. Yes, there are some experts, but not that many. And the amount of misinformation, misperception, opacity, and information asymmetry is enormous.

As I continue to write privately, I’m going to start writing more publicly. And I encourage comments, feedback, and corrections.

While there is much debate about SPACs, I believe they are a long-term part of the capital stack. They are evolving rapidly, which is part of what is so interesting about them, at least to me.