SPAC Dynamics: An interesting turn in SPACs are those SPACs being raised by Venture Funds, Growth Funds or Crossover funds in the hopes of working with an existing portfolio company.

There are a lot of interesting turns that may play out here:

In some private company boards, politics can be intense with "Alpha" Directors and "Beta" Directors.

Also is the issue that the earliest investors are oftentimes the largest owners versus later stage investors who usually own less but have invested a lot more capital

Success of the startup typically amplifies the dynamics of both of these trends.

Now consider when one of the Directors approaches the CEO and the rest of the board with a SPAC:

1. Is it the Alpha Director or one of the other Beta Directors? How will that drive reactions?

2. How will the rest of the board react to Sponsor economics benefitting an existing investor over themselves?

3. What happens if two Directors have a SPAC?

4. What if a PIPE or Sponsor economics flips ownership dynamics amongst existing Directors?

Over time, the easiest way to navigate these issues may be to have a stand-down agreement amongst existing investors that says that the IPO should be taken by a new partner vs someone already on the cap table.

Otherwise, these issues will likely get messy over the coming years.