News for hackers. Stuff that matters.

A comment on With $600M 'Blank Check' IPO, VCs Experiment on Startup Listings. Parent comment

Re:With $600M 'Blank Check' IPO, VCs Experiment on Startup L... by probe on Saturday September 16, 2017 @09:45PM (#15267805)
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.

[ Parent | on HN ]
Re:With $600M 'Blank Check' IPO, VCs Experiment on Startup L... by danielahn on Tuesday September 19, 2017 @11:29AM (#15285492)
Sorry 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%.

[ Parent | on HN ]