Greed is God.
At this pointUnless you go public through a direct listing, traditional IPO, or SPAC, are you a high growth company at all?
Every CEO I speak to at a startup that generates more than just Series B revenue tells me that SPACs are circling and hungry for a deal so they don’t have to return the raised funds to their original backers. There’s an old joke: when you only have a hammer, everything looks like a nail. Except this time, when all you have is a blank check company, any former startup looks like a public company waiting.
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Enter WeWork. Yes, the company known for setting fire to a mountain of cash that rivals the Ever Given in bulk is going public through a SPAC. This morning we’re going through the investor presentation and asking ourselves questions like, “Is this as bad a deal as it was a few years ago?” and “Why, oh god, why do we need to talk about WeWork again?”
But that’s not all. Axios, the rare media startup that seemed positioned for a good run, could merge with The Athletic and go public through a SPAC. At least according to WSJ reporting.
It is possible to make arguments in favor of the deal. The Athletic has what Axios lacks and vice versa. So if you combine the former’s subscription base with the latter’s newsletter and advertising capabilities, it would make for an attractive business. May be.
But the gist of this morning is that private investors in companies of all kinds are trying to get their money out of it while it is still possible. That’s why we’ve seen seventy-seven LIDAR and EV SPACs. These aren’t typically companies ready to go public. They are companies with investors who are ready to cash out.
The same dynamic applies to the WeWork deal and the possible Axios combo-and-SPAC, I think.
Greed is not really good today, to quote an old movie. It’s been good in the tech-and-money class for so long that it’s too boring to quote a movie about a corrupt financier to warrant even being overheated. Instead, greed is God and we are all watching his rise.
Now let’s digest the latest victims.
First, is WeWork a bouncing company that has a proven record of growing while losing less money? Not really.