5 ms·
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 a
by probe 9y ago
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
- danielahn 9y agoSPACs issue units to their founders that will convert into approximately 20% ownership upon the successful completion of a deal
- probe 9y agoNo 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.
- danielahn 9y agoSorry for late reply! 20% is standard SPAC comp. Also yes, I apologize, you are right - they get 20% of the value of the SPAC, so if they buy 10% of a company, they are only getting 20% promote on that 10%.