20VC: SPACs. What Are They? Why Now? How Do They Change The Venture Landscape? Are They Better Than IPOs & Direct Listings? How Should Founders Think About Them? Kevin Hartz & Troy Steckenrider @ A*
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 31 August 2020
⏱️ 38 minutes
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Summary
Kevin Hartz is Co-Founder & Partner @ A*, a newly listed special acquisition company which raised $200M to acquire and take public a tech startup. Kevin is also the Co-Founder, former CEO, and Chairman Eventbrite (NYSE: EB). Before Eventbrite, Kevin was the Co-Founder & former CEO of online money transfer service, Xoom (acquired by PayPal for $1.1B). Kevin is also one of the most successful early-stage investors in the business with a portfolio including the likes of Airbnb (Seed, Series A), Uber (Series B), Pinterest (Seed, Series A), Trulia (first check) and PayPal (Seed).
Troy Steckenrider is Kevin's co-founder and Partner @ A*. Prior to A*, Troy was COO @ ZeroDown changing the landscape for homeownership with $136M in funding. Before ZeroDown, Troy spent 5 years at Opendoor as Director of Capital Markets. Before that hyper-growth experience at Opendoor, Troy enjoyed roles at both Bain Private Equity and McKinsey.
In Today’s Episode You Will Learn:
1.) How Troy and Kevin came together to co-found A*? What is a SPAC? What are Kevin and Troy looking to achieve with the SPAC?
2.) What does Kevin believe are the primary drivers for the rise in SPAC's over the last few years? How will they change the structure of both the VC and startup industry? How will the SPAC landscape evolve over the next few years? What is the biggest challenge they face?
3.) Why does Kevin believe that the fee structure for SPACs is egregious? How would they like to change the incentive structure? How does the timeline for a SPAC transaction compare to that of an IPO? How does the fee structure compare when comparing SPACs to banks in IPOs?
4.) Why did Kevin and Troy choose $200M for the right size for their first SPAC? How does the size of the SPAC determine the type of company the SPAC will merge with? What are Kevin and Troy looking for in their partner company?
5.) What does the fundraising process look like for a SPAC? How do SPAC sponsors deal with the challenge that LPs call pull out if they do not like the proposed partner deal? When evaluating SPACs, what do investors look to invest because of? What makes A* special?
Items Mentioned In Today’s Show:
Troy’s Fave Book: Churchill: Walking with Destiny
As always you can follow Harry and The Twenty Minute VC on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript
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| 0:00.0 | We are back and this is the 20 minute VC with me, Harry Stebbings. Now last week we covered one of the |
| 0:04.0 | most discussed topics of the moment being rolling funds and today I'm really excited to discuss |
| 0:08.3 | another very hotly discussed topic of the day, SPACs or special acquisition companies and joined by |
| 0:14.2 | the founders of one of the most recent SPACs, A-Star. And so with that I'm thrilled to welcome |
| 0:18.3 | Kevin Harts, co-found and partner at A-Star, a newly listed |
| 0:21.6 | special acquisition company, which raised $200 million to acquire and take public a tech |
| 0:26.2 | startup. Kevin is also the co-founder, former CEO and chairman at Eventbrite. Kevin is also one of the most |
| 0:31.5 | successful early stage investors in the business, with a portfolio including the likes of check this out, |
| 0:36.2 | Airbnb, Uber, Pinterest, |
| 0:38.5 | Trulia and PayPal, just to name a few. And then I'm also very, very excited to be joined by |
| 0:42.7 | Troy Steck and Ryder, Kevin's partner at A-Star. Now, before A-Star, Troy was CEO at Zero |
| 0:47.6 | Down, changing the landscape for home ownership with $136 million in funding. Before Zero-down, |
| 0:53.2 | Troy spent five years at Open Door as director of |
| 0:55.5 | capital markets. And before seeing that hypergrowth experience at Open Door, Troy enjoyed roles |
| 1:00.0 | at both Bain Private Equity and McKinsey. And I do want to say a huge thank you to Brian |
| 1:03.9 | Singman at Founders Fund and Spike Lipkin for some fantastic question suggestions today. I really |
| 1:08.5 | do appreciate the team effort on the schedule. But before we |
| 1:11.1 | move into the show today, I want to take a moment to mention HelloSign, a great example of a |
| 1:15.1 | company that found success in building a product focused on user experience. HelloSign is an |
| 1:19.9 | effortless e-signature solution used by millions to securely send and request legally valid |
| 1:25.0 | digital signatures and agreements. They raised a total of $16 million |
| 1:28.4 | in funding and recently got acquired by Dropbox for an impressive $230 million. Check out HelloSign.com |
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