Yes, is probably the answer to working on a special purpose acquisition company (Spac) if you are part of the financial in-crowd at least.
The latest report is LinkedIn co-founder Reid Hoffman and tech entrepreneur Mark Pincus are nearing a deal to merge their blank cheque company with Joby Aviation, valuing the flying taxi developer at about $5.7bn, according to the Financial Times.
Joby, which has raised more than $800m including from corporate venturing backers Toyota among others, is hoping to start operations from 2024, similar to peers Lilium and Archer.
Archer delivered a $3.8bn public listing through a Spac and a $1bn order from United Airlines if its flying taxis were approved by the US regulators.
You can see what is attractive to the promoters of the Spac as they might receive up to 20% of the offer as shares. In a $5.7bn deal that is a lot of money and even if the aftermarket underperforms for some reason Hoffman and Pincus will have earned a fortune.
For Joby it provides new capital to cover development costs. As to why public market investors want access at this stage of risk is baffling but the promise of growth in a potential market seems to be enough for now.
You can see why SoftBank Group, which is heavily committed through its $100bn-plus Vision Funds has urged some of its high-profile portfolio companies to accelerate plans for stock market listings.
“They are being fairly transparent in their agenda that they would like everybody to list,” said one executive at a company backed by the Vision Fund told Nikkei Asia, the owner of the FT earlier this week. The person described the argument as very logical: “This is a once-in-a-lifetime opportunity, and you should take it.”
But for corporate venturers trying to do deals, Spacs are throwing out the calculations for new potential deals. As one new CVC head said: “Everything is different. We used to focus on potential revenues and let the equity return equation sort itself out over five years. Spacs are impacting on valuation.”
But when capital is this abundant everyone is looking at allocating cash to the potential winners.
