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With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

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Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#51

Post by charlesdm »

hendzen wrote: post #34
indescions_2017 wrote: post #31

Earlier quoted context omitted.

Off topic completely, but is there a long bull case for energy? Are we seeing a bottom in oil and natgas prices or will secular changes and renewable consumption dominate? And are infrastructure funds such as $ALPS, $ENFR a good way to get exposure and long term income distributions? Thanks in advance! As far as Chamath's Hedosophia, not sure I'd bet against him just yet. He's got a pretty good track record of winnin…

Everyone looks like a genius in a bull market.

And everyone looks like an idiot in a bear market?

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#52

Post by djrogers »

perseusprime11 wrote: post #49
indescions_2017 wrote: post #31

Earlier quoted context omitted.

Off topic completely, but is there a long bull case for energy? Are we seeing a bottom in oil and natgas prices or will secular changes and renewable consumption dominate? And are infrastructure funds such as $ALPS, $ENFR a good way to get exposure and long term income distributions? Thanks in advance! As far as Chamath's Hedosophia, not sure I'd bet against him just yet. He's got a pretty good track record of winnin…

Not betting against him but there are couple of things to note 1) Not many new undiscovered markets exist 2) Google, Amazon, Facebook, Microsoft are getting bigger and bigger. 3) More bets tend to fail than succeed. So coupled with 1) and 2), not sure how much money will be left in 600M

> Not many new undiscovered markets exist

Uh, how would we know that if they’re undiscovered?

No, seriously - back up 20 years and tell that to the people who invested in Google/FB/Amazon. Or back up 10 years and Tell that to the folks who were going to invest in mobile gaming startups. Or how about 5 years ago - tell the folks who were starting Uber and Lyft that their markets don’t exists.

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#53

Post by SkyMarshal »

bandrami wrote: post #14

Ah crap, it's 1999 again.

No, this is the exact opposite, it's the anti-1999. He's offering late stage companies this deal - don't IPO, stay private, avoid the IPO and the making a bunch of connected Wall Streeters rich on your IPO pop (money that should have gone to the startup instead), and sell a large portion of your equity to us instead. We'll not only make a large enough investment that it's a viable alternative to what you would take in an IPO, but we'll also act as active advisor that helps scale your business (and we're the team that scaled Facebook so we know what we're doing).

It's a compelling offer for any founding team still in control of their unicorn startup and who is still in it to build a great business.

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#54

Post by perseusprime11 »

djrogers wrote: post #52
perseusprime11 wrote: post #49

Earlier quoted context omitted.

Not betting against him but there are couple of things to note 1) Not many new undiscovered markets exist 2) Google, Amazon, Facebook, Microsoft are getting bigger and bigger. 3) More bets tend to fail than succeed. So coupled with 1) and 2), not sure how much money will be left in 600M

> Not many new undiscovered markets exist Uh, how would we know that if they’re undiscovered? No, seriously - back up 20 years and tell that to the people who invested in Google/FB/Amazon. Or back up 10 years and Tell that to the folks who were going to invest in mobile gaming startups. Or how about 5 years ago - tell the folks who were starting Uber and Lyft that their markets don’t exists.

Pace has slowed down by all accounts. I am only talking about big opportunities outside of GAFA. Also look at GDP growth.

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#55

Post by danielahn »

probe wrote: post #50
danielahn wrote: post #33

Earlier quoted context omitted.

Why not just ask Social Capital to invest out of their VC fund? The only difference is liquidity in public markets, and if that's all you want, why are you giving up 20% of the upside from your current valuation when it would cost you less than 1% of your current to IPO yourself?

I'm not sure where you're getting the 20% number...? The ownership stake is dependent on how the negotiations go and how much the company is looking to raise at what valuation/terms. Social Capital will argue a liquidity premium should be applied, and I'm sure the company will say what you're saying (they can IPO <1%). However, they could both stand to benefit, so I see a deal happening with this SPAC

SPACs issue units to their founders that will convert into approximately 20% ownership upon the successful completion of a deal

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#56

Post by alasdair_ »

perseusprime11 wrote: post #54
djrogers wrote: post #52

Earlier quoted context omitted.

> Not many new undiscovered markets exist Uh, how would we know that if they’re undiscovered? No, seriously - back up 20 years and tell that to the people who invested in Google/FB/Amazon. Or back up 10 years and Tell that to the folks who were going to invest in mobile gaming startups. Or how about 5 years ago - tell the folks who were starting Uber and Lyft that their markets don’t exists.

Pace has slowed down by all accounts. I am only talking about big opportunities outside of GAFA. Also look at GDP growth.

>Also look at GDP growth.

GDP seems like a terrible way to measure the economy. Let's smash all of Bastiat's windows and grow the GDP!

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#57

Post by ubernostrum »

sharemywin wrote: post #10
schintan wrote: post #3

Matt Levine doesn't think this is a good idea: https://www.bloomberg.com/view/articles/2017-09-15/icos-vcs-...

it's not an ICO. it's a public company blank check company.

Based on your comment I'm guessing you only read the URL, or perhaps the title, and not the actual column.

Matt Levine does a daily "roundup" style column where he links to and comments on multiple finance-related stories. He did not claim this was an ICO; he simply mentioned this in a daily roundup which included a story about Hedosophia and also a story about ICOs (and in context he was discussing them as two different alternatives to traditional IPOs). Thus, 'ICO' appears in the URL, because the URL is autogenerated from the title, and the title gives a rundown of what he's covering.

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#58

Post by specialist »

pfarnsworth wrote: post #48
chollida1 wrote: post #46

Earlier quoted context omitted.

Look, you are right that Saudi Arabia flooded the market, but there are many much more plausible and, perhaps more meaningfully, publically stated reason why they did this. - they were trying to starve out oil sands and other alternative oil sources to ensure they don't continue to come online in the near term, this has had some success as anyone in Calgary or Edmonton will tell you. This is far and away the biggest…

Exactly, look at the simple answer, as you said. I'm not sure why people think this is such a controversial viewpoint. It's pretty obvious that ISIS was a big threat in 2015-2016 to the entire Middle East and that just so happens to correspond to when Saudi Arabia started acting irrationally in terms of its oil output. I'm not sure why this is so hard to believe that it's related. The oil sands have been in business…

I'm with chollida1: both can be true.

When the Saudi's tanked the price of oil, I assumed it was engineered by the USA to kick Russia's economy in the nuts in retaliation for their actions in Ukraine, Syria.

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#59

Post by probe »

danielahn wrote: post #55
probe wrote: post #50

Earlier quoted context omitted.

I'm not sure where you're getting the 20% number...? The ownership stake is dependent on how the negotiations go and how much the company is looking to raise at what valuation/terms. Social Capital will argue a liquidity premium should be applied, and I'm sure the company will say what you're saying (they can IPO <1%). However, they could both stand to benefit, so I see a deal happening with this SPAC

SPACs issue units to their founders that will convert into approximately 20% ownership upon the successful completion of a deal

No it's the founders of the SPAC (Chamath et. al) get 20% of the SPAC, which will then be diluted once they merge with the target startup.

I do think you do raise a fair question of what stake Chamath et. al should get for sourcing a deal. 20% is definitely high, and I think a typical SPAC is something like 5% sourcing stake for the owners.

Re: With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings

#60

Post by sharemywin »

ubernostrum wrote: post #57
sharemywin wrote: post #10

Earlier quoted context omitted.

it's not an ICO. it's a public company blank check company.

Based on your comment I'm guessing you only read the URL, or perhaps the title, and not the actual column. Matt Levine does a daily "roundup" style column where he links to and comments on multiple finance-related stories. He did not claim this was an ICO; he simply mentioned this in a daily roundup which included a story about Hedosophia and also a story about ICOs (and in context he was discussing them as two diffe…

At the top of the article he wrote:

"If you are a technology startup, there are two hot ways to fund yourself:"

I just thought SPAC was some VC term or something. Didn't realize he was laying out a third way.

I admit by that point in the article, I had assumed I got the gist of the article. Why fund yourself with an VC when you can ICO and give away basically nothing.

FYI, I just laying out where the mis-understanding came from.

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