Comments on: Business Values: Some Things I Just Don’t Believe In http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/ A blog about our thoughts on entrepreneurship, teamwork, our services, the Web and anything we find interesting. Wed, 17 Mar 2010 22:26:59 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: carl nickelson http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/comment-page-1/#comment-45720 carl nickelson Mon, 29 Oct 2007 00:08:49 +0000 http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/#comment-45720 I think spacs are a great vehicle. We own 2,640 acres of Alluvial Gold deposit and I am looking for a spac to raise 200mm usd. worth 8B at $300.00 gold. Gotta dig it though. CARL 602 357 4675 I think spacs are a great vehicle. We own 2,640 acres of Alluvial Gold deposit and I am looking for a spac to raise 200mm usd. worth 8B at $300.00 gold. Gotta dig it though.

CARL

602 357 4675

]]> By: Things I Just Don’t Believe In http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/comment-page-1/#comment-31205 Things I Just Don’t Believe In Thu, 22 Feb 2007 19:16:15 +0000 http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/#comment-31205 [...] As posted on the FreshBooks Blog (there are some comments there too): [...] [...] As posted on the FreshBooks Blog (there are some comments there too): [...]

]]> By: Mike McDerment http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/comment-page-1/#comment-31089 Mike McDerment Wed, 21 Feb 2007 14:57:15 +0000 http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/#comment-31089 Jay - again I totally agree with you. I think I misrepresented myself to some degree with my "That said, SPACs seem like soulless entities to me" statement. There is no logic per say as to why I don't believe in SPACs. It's a visceral thing more than anything. SPACs seem like a great financing vehicle - and an alternative to VCs - I still don't believe in them, and where that comes from is hard to explain...but I'm sticking with no. Rationally speaking I am inclined to agree with everything you say. My gut...it says otherwise. Jay – again I totally agree with you. I think I misrepresented myself to some degree with my “That said, SPACs seem like soulless entities to me” statement.

There is no logic per say as to why I don’t believe in SPACs. It’s a visceral thing more than anything. SPACs seem like a great financing vehicle – and an alternative to VCs – I still don’t believe in them, and where that comes from is hard to explain…but I’m sticking with no.

Rationally speaking I am inclined to agree with everything you say. My gut…it says otherwise.

]]> By: Jay http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/comment-page-1/#comment-31087 Jay Wed, 21 Feb 2007 14:51:21 +0000 http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/#comment-31087 Mike, you're entitled to whatever logic you choose, but I don't see what there is to not believe in. Your main contention seems to be this: "That said, SPACs seem like soulless entities to me. What are the odds they share the business values of the people at American Apparel? Slim to none I’d say. What if the dark clouds come when you have an investor like that? Won’t be pretty I suspect." The business owner gets to retain control in a reverse merger. And in the case of a SPAC, the business owner is actually in a better position than with a VC. The reason is that the SPAC is made up of a bunch of smaller investors, not just one or two big VCs who can hold a hammer over the company, even after its gone public. If dark clouds come, all the investors in the SPAC would have to get together in a grass roots movement to have any power. It's a bunch of smaller shareholders voting instead of one huge one. The SPAC does not simply vote as a block as a regular large investor would. I live in the States and I think the reverse merger method of going public as is usually used in Canada is actually far better for many reasons. Mike, you’re entitled to whatever logic you choose, but I don’t see what there is to not believe in.

Your main contention seems to be this:

“That said, SPACs seem like soulless entities to me. What are the odds they share the business values of the people at American Apparel? Slim to none I’d say. What if the dark clouds come when you have an investor like that? Won’t be pretty I suspect.”

The business owner gets to retain control in a reverse merger. And in the case of a SPAC, the business owner is actually in a better position than with a VC. The reason is that the SPAC is made up of a bunch of smaller investors, not just one or two big VCs who can hold a hammer over the company, even after its gone public. If dark clouds come, all the investors in the SPAC would have to get together in a grass roots movement to have any power. It’s a bunch of smaller shareholders voting instead of one huge one. The SPAC does not simply vote as a block as a regular large investor would.

I live in the States and I think the reverse merger method of going public as is usually used in Canada is actually far better for many reasons.

]]> By: Mike McDerment http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/comment-page-1/#comment-31086 Mike McDerment Wed, 21 Feb 2007 14:31:40 +0000 http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/#comment-31086 Jay - you are right and none of that is lost on me. All the points you made are the benefits of the shell and the revese merger - especially from the entrepreneur's perspective. That said, I still don't believe in SPACs. Jay – you are right and none of that is lost on me. All the points you made are the benefits of the shell and the revese merger – especially from the entrepreneur’s perspective. That said, I still don’t believe in SPACs.

]]> By: Jay http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/comment-page-1/#comment-31085 Jay Wed, 21 Feb 2007 14:27:50 +0000 http://www.freshbooks.com/blog/2007/02/21/business-values-spacs-or-false/#comment-31085 I think you have a fundamental misunderstanding of what is going on here. It's just another way of going public. And frankly, a much safer way for the business owner. When doing an IPO, the broker can bail out at any moment if they don't like the market, and that's after the business owner has spent a bunch of money. With a reverse-merger, the company is certain to go public. The SPAC, or any reverse merger shell, is simply an investor. A shell is soulless on purpose. The shell then looks for a company to become its soul, and then hands the reins over to that company. Reverse mergers are the main method of going public in Canada. I think you have a fundamental misunderstanding of what is going on here. It’s just another way of going public. And frankly, a much safer way for the business owner. When doing an IPO, the broker can bail out at any moment if they don’t like the market, and that’s after the business owner has spent a bunch of money.

With a reverse-merger, the company is certain to go public. The SPAC, or any reverse merger shell, is simply an investor. A shell is soulless on purpose. The shell then looks for a company to become its soul, and then hands the reins over to that company.

Reverse mergers are the main method of going public in Canada.

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