More About SPACs. The ‘K-Shaped’ Recovery. Crypto Digest. A Tribute to Texas.
Today: My column in “Sifted” about whether to have more SPACs in Europe. Recent essays. Recent news.
The Agenda 👇
In Sifted: SPACs are everywhere, except in Europe. Is that a problem?
What governments should do to make the most of the recovery
I compiled everything I wrote (and most of what I’ve read) on crypto
Let me pay tribute to one of the most misunderstood American states: Texas 🇺🇸
In the old days, the only way for a company to go public was through the slow, boring, and constraining process of doing an IPO. Then for a brief moment there were conversations (and some action) around an alternative known as ‘direct listing’. But over the past few months, it sounds like all the money is flowing toward a new approach to getting a company listed: special purpose acquisition vehicles, or ‘SPACs’.
A SPAC is a company that’s listed on a stock exchange and is loaded with money raised from investors so as to acquire a target that isn’t yet public (and hasn’t likely been identified yet). Once a target has been found, the two parties have to settle on a price, after which they merge and the target thereby becomes a public company without having to dance around to seduce capricious public equity investors.
SPACs have dominated the conversation so much lately, with powerful voices such as Chamath Palihapitiya leading the choir, that you could be forgiven for not realizing that there aren’t that many SPACs in Europe, for many reasons that I discuss in my latest Sifted column. Should we do something about it? And will SPACs go the same way as crowdfunding—a nice experiment, but ultimately a failure?
👉 Read the whole column on the Sifted website: Is it time for more SPACs in Europe?
📊 How Governments Can Deal With the 'K-Shaped' Recovery
Last week I participated in a panel discussion as part of Building tech ecosystems in a distributed world, an event brought to you by Dealroom, Sifted, and European Startups (the European Commission’s effort to foster tech entrepreneurship on the continent). The focus of my panel was precisely on this idea of a ‘K-shaped’ recovery and what governments can do to mitigate its adverse consequences.
Kim-Mai Cutler, Margaret Mulligan, Pat Wilson, Michael Stothard and I shared a lot of ideas around regulations, the housing market, the ability of entrepreneurs to tackle challenges that so far have eluded governments and much more. I had written a few notes before the panel, focusing on three ideas:
The pandemic is an accelerant rather than a disruptive change in direction
Because a lot is expected from them, governments are more powerful than ever
However, the ‘K-shaped’ recovery will be made worse by governments’ cluelessness
There are a few things that we should do, starting with realizing that it’s a two-part race
👉 Read the details in How Governments Can Deal With the 'K-Shaped' Recovery.
🤓 All About Crypto
Last week I introduced the new series of the European Straits edition sent on Friday: a curated collection of past writings and interesting readings on a specific topic that has attracted attention during the week. And the very first topic to be covered in that series was… crypto.
I admit I don’t even know what word to use—whether it’s ‘cryptocurrencies’, ‘tokens’, ‘crypto protocols’, ‘blockchain’, ‘DeFi’, or any other word relating to what is happening in that space. What I see is mostly protocols on one hand and tokens designed as incentives to make these protocols more widely used on the other, but I’m open to other interpretations!
What I’ve come to know, on the other hand, is that the key to understanding that world is that cryptocurrencies are an attempt to renew innovation in the realm of network protocols that have long been neglected by today’s Internet giants. The key function of a cryptocurrency is to get the early users of a new protocol interested in its large-scale deployment.
👉 Discover the implications in the very first ‘Friday’s Digest’: All About Crypto.
⭐️ We All Need a Lone Star State
Everyone loves to hate Texas, especially in Europe. I mean, there’s the cowboys, the racism, the archconservatism, the rising inequalities, the capture of the state’s government by fossil fuel industries... And yet so many things have been happening and changing in Texas recently that I think it’s worth another look—and a reading of some inspiring writing about the ‘Lone Star State’.
This is what I shared with my subscribers yesterday, making the case that Texas has often been a haven for adventurers and innovators, and that a new Texan elite seems to be emerging these days. That new elite, both in politics and business, could radically transform Texas from a de facto petrostate into the new frontier of the American growth engine.
I’m also asking another important question: Where’s our Texas in Europe? Do we have an entire state/country that likes to think of itself as an outsider, presenting itself as the perennial frontier and translating this message into action by providing entrepreneurs with a looser regulatory framework and infinite resources (from oil to real estate) which they can freely use to grow their business?
👉 Discover my answer in We All Need a Lone Star State.
Sounds interesting? Subscribe to European Straits and let me know what you think!
🦢 Yesterday was the very first Demo Day of my firm The Family since we switched to working with founders and investors remotely. We still have to wait and see if it translates into successful fundraisings, but so far it’s been a huge success: almost 800 invited investors attended the pitch sessions by the batch’s 30+ startups; we’ve received dozens of messages congratulating us for the fast pace of the event and high quality of the pitches; and more than 200 introductions were made in just the first hour!
You can read more about the preparation for this Demo Day in recent editions of The Family’s newsletter by my colleagues Mathias Pastor (see The Family Demo Day & The Future of Online Events) and Balthazar de Lavergne (see Money, advice, community).
📊 Above, I mentioned the panel I participated in about governments and the ‘K-Shaped’ recovery. Well, you can actually watch the replay online! Here it is: How to deal with a "K" shaped recovery.
🇫🇷 If you prefer to listen about Texas in French rather than reading about it in English, check out the latest edition of my wife Laetitia Vitaud’s and my podcast “A deux voix”, which we published yesterday: Tout comprendre sur la crise au Texas (subscribers only, but definitely worth it 😉).
📨 Finally, don’t miss the latest installments of The Family’s newsletter:
You always remember a clean restroom. (Mathias Pastor)
Why so much hate? (Oussama Ammar)
From Some Quick Notes on SPACs (February 2021):
For those of you who have stayed away like me, SPAC stands for ‘special purpose acquisition company’ (also known as ‘blank-check company’). It’s a company that’s listed on a stock exchange and loaded with money raised from investors so as to acquire a target that isn’t yet public (and hasn’t likely been identified yet). Therefore it’s considered an alternative to an initial public offering (IPO) or a direct listing for companies that want to go public: instead of offering investors the opportunity to invest, just get a SPAC to acquire you so its investors become shareholders in your company as a result. The regulatory implications and costs are very different from those of an IPO, thus making SPACs very attractive and hot over the recent period.
All recent editions:
We All Need a Lone Star State—for subscribers only.
All About Crypto—for subscribers only.
How Governments Can Deal With the 'K-Shaped' Recovery—for subscribers only.
Europe & Silicon Valley w/ Toni Cowan-Brown. Capital Call. AI. International Expansion. Consumer Goods.—for everyone.
Some Quick Notes on SPACs—for subscribers only.
Vaughn Tan on Uncertainty—for subscribers only.
“Be Patient” | A Conversation About Angel Investing w/ Pascal Levy-Garboua (Parts 1 and 2)—for subscribers only.
The Digital Economy w/ Bill Janeway. Reinvention. Bezos. Musk. Communications.—for everyone.
European Straits is a 4-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!
From Munich, Germany 🇩🇪
Nicolas
