Special-Purpose Acquisition Companies Investor Due Diligence



It’s always useful to spend some time evaluating a SPAC’s management team. In fact I would argue that quality of the management team is the most critical factor in any deal.

So … read through the track record and bios of the SPAC’s executive board roster and ask the following questions:

  • Do they have a solid M&A history?

  • Do they have a history raising venture capital?

  • Do they have long experience managing public companies?

  • What is their background and performance in the area in which the SPAC is searching for a business combination?

It is also very worthwhile to review any history a SPAC’s sponsor has with previous SPAC transactions, in particular the underwriter(s) ‘on the cover’ and securities counsel. You can gain valuable insight into their ability to source and finance a credible deal in the SPAC format.

Some serial SPAC sponsors have a history of acquiring successful companies that continue to prosper over time, while others have a history of finding deals that barely secure enough financing to close and whose common stock has cratered almost immediately after closing.

Get the ‘right’ answer to these fundamental questions and your choice – of whom to back – can be made with increased confidence.

2021 saw a significant increase in the popularity of special purpose acquisition companies (SPACs) as a way to bring private companies public. It also made some well-known private equity managers accessible to public investors. Looking back, we see that 2021 saw 613 SPAC listings on NASDAQ, raising a total of $145 billion – an increase of 91% from the amount raised in 2020 representing over 59% of total new listings, an increase from around 53% in 2020. In fact, even though all other IPOs increased by 88% from 2020 levels, SPAC listings increased almost 150%.

It seems prudent to take a serious look at this asset class.

“It really is a mainstream way for companies to go public,” ~ David Batalion, head of SPACs at Cantor Fitzgerald & Co

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Trevor Lee



Cell +44 7979 882992

Life-Cycle of a SPAC



A SPAC – acronym for Special Purpose Acquisition Company – is a new company going public (IPO) to raise capital from institutional investors to fund an acquisition. The acquired company will typically have an enterprise value of 2 to 4 times the SPACs capital after the IPO (leveraged buy-out). The SPAC should acquire a significant majority of the company taken over. A complete transfer of shares by a merger is preferred although, other forms of a business combinations is possible, e.g. as a holding company or joint venture. The acquisition could be compensated in cash, debt or (issuing new) shares of the SPAC.


The process is governed by the SPAC management team in accordance with the wishes of the company’s shareholders. No cash compensation is paid to the management team, but they are rewarded with initial shares of the SPAC before the IPO – so called Founder Shares. These executives should have a positive track record in public listed companies and be experienced in M&A as well as in the targeted industry.

The process is started by engaging securities counsel, investment bankers, consultants and the public company accountants. This process is initiated by the Sponsors, who finance approx. USD $750,000 for the costs of going public and provide the company with seed capital of usually 5% of the expected IPO proceeds.

Approximately one-half of the expenses are for the advisers and for the listing of the company on the stock exchange, with the remaining expenses taken out of the IPO proceeds.

The 5% capital invested by the sponsors is held in a trust account, which is subject to the provisions of the securities prospectus (“S-1”).

In return for their investment, Sponsors typically receive as much as 25% of the Founder Shares and one warrant for each dollar invested; the exercise price for one warrant is usually USD $11.50. Founder Shares comprise 20% of the fully diluted shares of common stock after the IPO.


After the IPO, the proceeds are paid into a trust account. There are deductions from the total amount in the trust account: the investment bank receives a standard 2.5% fee out of this amount for the underwriting. Some of the sponsor capital is held in trust in addition to the 100% of the IPO proceeds.

A typical SPAC may have 102% in trust which comprises the IPO proceeds plus 2/5th of the sponsor capital. An acquisition budget accounts for the remaining sponsor capital not held in trust.

SPACs are typically structured to allow the team 18 months from the day of the IPO to complete the acquisition, including identifying the targeted company, negotiations, due diligence, etc. An extension of this strict timetable would depend on a shareholder vote. SEC regulations rule out any time longer than 36 months. If the SPAC has not completed a business combination or acquisition within the given time, the capital in trust is returned to the participating investors.

Once the acquisition negotiations have been successfully concluded, the SPAC will make an offer to its shareholders: It is common to offer the shareholders to approve the intended business combination, or to buy back their shares. Having said so, shareholders most usually prefer to keep the shares and approve the business combination once this appears lucrative. To market this proposed transaction, a second road show is held to present the acquisition plan to the shareholders and a selected group of institutional investors. In some rare instances a backstop is structured to provide additional financing in the event that some of the shareholders decide to redeem their shares.

After the business combination, the acquired or merged company becomes a fully operational and listed company on whichever SE the float took place.

At that time the underwriting investment bank receives another 3.5% in fees out of the IPO proceeds, for a total fee of 6%.

Owners of the Founder Shares are restricted from trading their Founder Shares for a period of one year after the business combination.

However, this restriction may be waived if the value of the shares  after the business combination is 20% above the offering price on 20 consecutive trading days.


Our principal partner is a unique consulting firm specialising in Special Purpose Acquisition Companies.

They have established a powerful international network that includes the top investment bankers as well as the top securities law firm in New York. This team along with their accounting partners are recognised as the leading players in the SPAC space on Wall Street.

From the beginning, they structure a deal with the client to eliminate risks and expenses while adding value to the deal with experienced management consultants and advisers.

  • They are not engaged by their clients, they partner with them.

  • They are co-founders of each SPAC.

  • Their contribution of expertise, experience and effort are compensated exclusively in Founder Shares.

  • In this way they are partners with our clients in the success of the SPAC.


      • Coordinate all of the involved parties and secure their communication.

      • Evaluate a proposed SPAC and its potential targets – M&A

      • Negotiate with the relevant parties to achieve the best outcome for the SPAC.

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Trevor Lee

+44 7979 882992



In Praise of Mavericks


This is for them:

Here’s to the crazy ones. The misfits. The rebels. The trouble-makers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules, and they have no respect for the status-quo. You can quote them, disagree with them, glorify, or vilify them. But the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

Steve Jobs, Apple Computers  

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Trevor Lee



Cell +44 7979 882992

Empathy – An E.I. Competency


Use Empathy to Improve

Your Next Meeting

Improving meetings isn’t just about inviting the right people and being prepared. You also need to employ empathy, an emotional intelligence competency that can help you better manage discussions.

Empathy allows you to read people:

Who is supporting whom? 

Who is coasting? 

Where is the resistance?

Carefully reading people will also help you understand the conflicts in the group so that you can manage the power dynamics. You may think these sorts of politics are unimportant, but power matters — and it plays out in meetings. Learning to read how the flow of power is moving and shifting can help you lead the group.

It’s your job to make sure people leave your meeting feeling good about what happened, their contributions, and you as the leader.

Adapted from the HBR Emotional Intelligence Series

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Curated by Trevor Lee
Cell +44 7979 882992

3 Steps to Building a Better Top Team

When your top team fails to function, it will likely paralyse the whole company.



Few teams function as well as they could. But the stakes get higher with senior-executive teams: dysfunctional ones can slow down, derail, or even paralyse a whole company. McKinsey in their work with top teams at more than 100 leading multinational companies, including surveys with 600 senior executives at 30 of them, they identified three crucial priorities for constructing and managing effective top teams. Getting these priorities right can help drive better business outcomes in areas ranging from customer satisfaction to worker productivity and many more as well.

1. Get the right people on the team . . . and the wrong ones off

Determining the membership of a top team is the CEO’s responsibility—and frequently the most powerful lever to shape a team’s performance. Many CEOs regret not employing this lever early enough or thoroughly enough. Still others neglect it entirely, assuming instead that factors such as titles, pay grades, or an executive’s position on the org chart are enough to warrant default membership. Little surprise, then, that more than one-third of the executives they surveyed said their top teams did not have the right people and capabilities.

The key to getting a top team’s composition right is deciding what contributions the team as a whole, and its members as individuals, must make to achieve an organisation’s performance aspirations and then making the necessary changes in the team. This sounds straight-forward, but it typically requires conscious attention and courage from the CEO; otherwise, the top team can under-deliver for an extended period of time.

2. Make sure the top team does just the work only it can do

Many top teams struggle to find purpose and focus. Only 38 percent of the executives McKinsey surveyed said their teams focused on work that truly benefited from a top-team perspective. Only 35 percent said their top teams allocated the right amounts of time among the various topics they considered important, such as strategy and people.

3. Address team dynamics* and processes

A final area demanding unrelenting attention from CEOs is effective team dynamics, whose absence is a frequent problem: among the top teams McKinsey studied, members reported that only about 30 percent of their time was spent in “productive collaboration”—a figure that dropped even more when teams dealt with high-stakes topics where members had differing, entrenched interests.

Correcting dysfunctional dynamics requires focused attention and interventions, preferably as soon as an ineffective pattern shows up.

Finally, most teams need to change their support systems or processes to crystalise and embed change.

Each top team is unique, and every CEO will need to address a unique combination of challenges.

Developing a highly effective top team typically requires good diagnostics, followed by a series of workshops and field work to address the dynamics of the team while it attends to hard business issues. The best top teams will begin to take collective responsibility and to develop the ability to maintain and improve their own effectiveness, creating a lasting performance edge.

© McKinsey & Co • Michiel Kruyt, Judy Malan, and Rachel Tuffield


Curated by Trevor Lee



Cell +44 7979 882992

Relationships Matter (more than ever)

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In his 1994 book Job Shift, William Bridges refers to the “job” as “an artifact of the industrial revolution”. The traditional organisation is designed to function like a machine. It is a hierarchy with jobs as the building blocks. In this model people are essentially cogs in the wheel of production. This model, and the leadership style of command and control it refined and has historically rewarded, is no longer sufficient for today’s organisations to thrive. We know this intuitively.

Many of us have had to invent ways to work that are often unsupported or even thwarted by the confines of the structure we are in and the remnants of command and control leadership style and practices it encourages.

Yet for better or for worse, this model is not going away anytime soon.


The hierarchy continues to represent what organisations looks like. From an individual perspective the construct of a “job” also continues to be very important. It tells us how we fit and helps to clarify what is expected of us in exchange for a paycheck. As we move up the boxes on the hierarchy it represents power, authority, achievement, and the promise of increased financial reward.

There is a significant flaw in this model that provides a clue to what is needed from leaders now and into the future.

The traditional model of organisations, including the thinking and assumptions that underlie it, ignores the extent of our interdependence. Leaders now and into the future can no longer afford to ignore this reality in style or practice.

Most work in today’s world gets done through a multitude of transactions conducted between individuals and rarely follows the neat path of organisational lines. Even the notion of organisational lines is blurring as collaboration across businesses, becomes more prevalent and the rapidly growing ranks of the self-employed create a kind of free agency workforce.

The command and control style of leadership may have ensured the order and efficiency essential to success in the industrial age. Yet in today’s world it all too easily causes the hierarchical model to devolve into the kind of bureaucracy we can no longer afford and are less and less willing to tolerate.

The world of work is far too complex and rapidly changing to continue to relate to the definition of our jobs in the simplistic terms of what we do. And the construct of setting individual objectives that are expected to somehow “roll up” into organisational objectives is no longer sufficient to ensure we succeed together.

We must all begin to think about our jobs in terms of what we promise, not just in terms of the things we must do, but also in terms of the promises we must make to others to produce results.

It is that network of promises, both in terms of organisational goals as well as the everyday fabric of our promises to each other, which interconnect our actions and ensures our shared goals are ultimately achieved.

A job description will never be able to capture everything we need to do to get the job done. And an org chart is not designed to reflect our interdependence. We don’t need to ditch the org chart. But positional leaders do need to make an essential shift from focusing on the relationship between jobs to fortifying the relationships between people.


Because the building block of organisations of the future is no longer the job. It is relationships.

The hierarchical model inherently keeps our focus on people as the boxes in an org chart and keeps our attention on what separates us. This undermines our relationships, unwittingly keeping the destructive dynamic of “us” vs. “them” intact. It is far too easy to retreat into our “box” when something isn’t working, justifying ourselves with “It’s not my job” or “I did my part, but someone else didn’t do theirs” so it’s not my responsibility.

To be effective now and in the future leaders must instead foster a culture of accountability, shifting everyone’s focus to clarifying and fortifying their inter-dependencies in terms of their commitments to each other.

The job may or may not become an artifact as Bridges predicted, but those organisations whose leaders fail to change the way they relate to them may find themselves on the brink of extinction.

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Trevor Lee
Cell +44 7979 882992

Why Retired CEOs Favor SPACs


In the last few years, interest in Special-Purpose Acquisition Companies among top retired CEOs has grown dramatically. Not surprising as 1 in 4 IPOs in 2019 on Wall Street were SPACs raising a total of $13.6bn = average raise c. $230m.

What is the attraction?

For many recently retired Chief Executives, leading a SPAC offers the optimal combination of opportunity and activity. The large majority of former public company CEOs are not interested in jumping back into a similarly all-consuming leadership role. They have been there, done that, and most have taken enough chips off the table to be choosy. But many CEOs aren’t satisfied with simply reducing their golf handicap. They want to stay active, and relevant, in the business world.

The dilemma they face is that the timeline for most challenging opportunities is somewhat lengthy. For instance pursuing an early stage start-up holds great uncertainty and an unpredictable time horizon to exit. Similarly taking on one or two board seats, particularly as Chair, is likely to be just as inflexible and can be similarly difficult to exit.

With a SPAC, the CEO is required to only make a maximum 36 month commitment as SPACs are time limited under SEC rules, work part time with a small team that would have a similarly motivated listed company CFO, and focus on an industry sector they are passionate about. Average time is 24 months.

N.B. SPAC creators are rewarded by founder shares that typically equal 20% of the capital raised.

Leading a SPAC is not the right fit for every retiring CEO. But for a growing number of companies and executives, the flexibility of SPACs is likely to continue to attract many of the world’s best.

Recent financial press:

  • “SPACs are definitely a more viable option today.” ~ Jackie Kelley, the America’s IPO leader for EY.
  • “Looking forward, the surge in SPACs will likely translate into greater activity in deal markets as they fulfil their acquisition strategies” ~ PwC analysts.
  • “‘Blank-check’ IPO proceeds [$13.6bn] hit new record in 2019 as Wall Street buys in.” ~ spglobal.com
  • “It really is a mainstream way for companies to go public,” ~ David Batalion, head of SPACs at Cantor Fitzgerald & Co

In collaboration with Rick Smith: CNEXT, Fast Radius, World 50, G100 NGL,TED Speaker.


Trevor Lee



Cell +44 7979 882992

Plan Your Post-Retirement Career


If you want to continue working in some capacity after you retire, you’ll have to do some planning. Start by asking yourself four questions:

  1. How much money do I need to earn? If a certain income is mandatory, this criterion needs to come first and will influence your other decisions.

  2. How much location independence do I want? If you have visions of balancing some work with a lot of travel, or if you’d like to spend winters in sunny climes, think carefully about how to cultivate a location-independent second act, such as a seasonal or internet-enabled job.

  3. How much change am I seeking? If you’d simply like to downshift in your current career, ask your manager about transitioning into a consultant role. A bolder change will require additional groundwork.

  4. How can I start test-driving my future career now? Experiment with some small side projects while you have the security of your regular income.


Adapted from “Planning Your Post-Retirement Career,” by Dorie Clark


Trevor Lee



Cell +44 7979 882992



Without collaboration, innovation stalls


How we can bring Edison’s world-changing collaboration process into the digital age.

When we call Thomas Edison to mind, our first thought is of a brilliant inventor and innovator whose creations transformed modern life. We often think of him toiling away in a laboratory all by himself, long into the wee hours of the morning.

And yet, we rarely consider the role that collaboration played in Edison’s world-changing success. Tangled in the lore of the lone American inventor, our mind’s eye conjures Edison’s spray of white hair, his signature bow tie, and we quickly ascribe his 1,093 US patents to innate genius.

Tempting as it is to sustain this image of Edison, it is inaccurate. In an age when we speak of Thomas Edison and Steve Jobs in the same breath, it’s important to refresh our understanding of the pivotal role collaboration played in Edison’s innovation prowess. He viewed collaboration as the beating heart of his laboratories, a sustaining resource which fuelled the knowledge assets of his sprawling innovation empire.

Thomas A Edison

Rising from humble beginnings, Edison was largely self-educated, pursuing his relentless passion for learning well into his 70s, when he taught himself botany. Deeply skilled in chemistry, telegraphy, acoustics, materials science, and electro-mechanics, Edison’s thirst for discovery began in his early teens and never ceased. Like a magnetic force all its own, Edison’s brainy leanings drew others to his quests, attracting bright colleagues with a huge diversity of skills.

From his earliest years renting space in workshops and small laboratories, Edison collaborated with others. Realizing the value of sharing his inspirations with people who held different skills than he did, Edison felt a unique bond with those who labored with him. In establishing his famed Menlo Park Laboratory at the age of 29, Edison journeyed from the failure of his first patented invention at age 22 to becoming a world-renowned inventor in just 7 years, establishing collaboration practices which came to be a signature of his campus-style operations.

Extract from Midnight Lunch ©  Wiley Publishing


In Memoriam: Author Sarah Miller-Caldicott  1957-2017 RIP

“It challenges each reader to examine the ambitions they’ve set for themselves, re-imagining what one person is capable of producing when they work in true collaboration.”

The linkage between innovation and collaboration underscores why Edison’s collaborative approach becomes such a relevant subject for us now. Given the increased scrutiny placed on the role of innovation as a driver of growth for every economy – whether emerging or developed – we must ask whether collaboration is also engaged. Like a symbiotic organism which can only thrive when its host is present, innovation can only gain sustainable traction when true collaboration also exists.



Trevor Lee



Cell +44 7979 882992

Trevor Lee – Connect and Collaborate

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Today, we live in a world that is interconnected as never before.

Not only that, it is a world where dialogue, collaboration and conversation have replaced the static, one-way communication channels (like a corporate website) of the past. And where trusted relationships between individuals drives business decisions.

‘Business is personal’

In collaboration with leading multi-national domain experts, including underwriters and securities counsel, I advise and guide entrepreneurs in preparation for public listing of their firms. This includes the facilitation of institutional funding.

Specifically in the development of Special Purpose Acquisition Companies (SPACs).

Verticals: fintech, smart energy, media, telco and healthcare.

I CONNECT and COLLABORATE for the PURPOSE of building relationships with, and between, a trusted global network who can effect change and ‘make a difference’.

I champion freedom, liberty and diversity with the learning at The Mises Institute forming the basis of my passion.

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Skype: trevorblee