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Bursts of Color - SPAC Winds of Winter

Bursts of Color - SPAC Winds of Winter
By Geoff Donaker • Issue #59 • View online
Axios recently posted that SPAC winter has arrived. Here’s a taste:
SPAC enthusiasm is slowing, as evidenced by rising redemption rates.
Higher redemption rates mean that investors are skeptical of the market and the deals — choosing to pull their money instead of risking losses if the stock price dives.
In July, the majority of SPAC deals saw redemption rates north of 50%.

Father Always Promised, Didn’t He?
The Axios post caught my attention, since I have been following the SPAC phenomenon… and also because I’m a sucker for any Game of Thrones reference. You may recall that my partner Rob wrote SPAC - Red Alert in January to shine a light on this overheated, under-regulated market. And of course, the whole thing reminded me of the following scene from Season 7:
"Winter is Coming" - Rob K for the past two years
"Winter is Coming" - Rob K for the past two years
To Clarify: SPACs Aren’t Bad (or Good)
As I wrote previously: a SPAC is not inherently bad or good… rather, it’s just a financial instrument. In some situations it will be a good choice for the target company and its investors. However, anytime the financial community goes wild for a new product like this, we have to ask: who will be left without a chair when the music stops?
Just For GOT Nerds
We may never get to read Winds of Winter, so it’s exciting to see HBO moving forward with its new series House of the Dragon, which has completed casting and should air in 2022.
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Geoff Donaker

Bursts of Color is a newsletter for start-up leaders who work with Burst Capital. It's meant to include products, people and ideas that I think are interesting and maybe relevant for you.

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