What’s the Right Size for a SPAC?
What’s the ideal size for a SPAC? Chris Cattone explains why the sweet spot is often between $100M and $150M in trust, balancing fee efficiency, target quality, and flexibility through the DESPAC process.
Connect with the Guest: Chris Cottone
Connect with the Hosts & The SPAC Podcast:
Michael Blankenship LinkedIn: https://www.linkedin.com/in/mikeblankenship/
Joshua Wilson LinkedIn: https://www.linkedin.com/in/joshuabrucewilson/
YouTube Channel: https://www.youtube.com/@Thespacpodcast
Disclaimers:
The views, opinions, and statements expressed by the guest are solely their own and do not necessarily reflect the views of The SPAC Podcast, its hosts, or affiliated organizations. This content is for informational purposes only and should not be construed as investment, legal, tax, or accounting advice.
Michael J. Blankenship is a licensed attorney and is a partner at Winston & Strawn LLP. Joshua Wilson is a licensed Florida real estate broker and holds FINRA Series 79 and Series 63 licensure. The content of this podcast is intended for informational and educational purposes only and should not be interpreted as legal, financial, or compliance advice. The views and opinions expressed by the hosts and guests are their own and do not necessarily reflect the official policies or positions of any regulatory agency, law firm, employer, or organization.
Listeners are encouraged to consult their own legal counsel, compliance professionals, or financial advisors to ensure adherence to applicable laws and regulations, including those enforced by the SEC, FINRA, and other regulatory bodies. This podcast does not constitute a solicitation, offer, or recommendation of any financial products, securities transactions, or legal services.
Let’s Connect on LinkedIn:
👉 Michael J. Blankenship - https://www.linkedin.com/in/mikeblankenship/
👉 ...
Mike B: So Chris, um, I know you have a lot of experience in the SPAC space, so tell us what's the right size of a SPAC in your mind?
Chris C: That's a great question. We get that question a lot. I find that SPAC sizes and, and we've done 'em as small as 60 million and as large as 300 million. I find the sweet spot is between, uh, a hundred and 150 million, and there are a couple of significant reasons for that.
Uh, first of all, the banking fees are usually determined based on the SPAC size, and so you're trying to find a point of efficiency where what you're paying to launch the SPAC meets within the budget of the SPAC team. So you also want the funds to be large enough to be able to attract the type of target that you're looking for, and sometimes 60 or 80 million might be a little bit on the small side for the target.
So yeah, a hundred, 150 million in trust I think is a great starting point. Keep in mind in the d spac you can always raise additional capital if you needed to. Uh, it also helps you in a situation where, uh, because you're paying for, you're paying fees associated with your initial raise, that if you have a higher, uh, amount of redemptions that come in at the end, that you haven't paid all those fees for nothing.
VP of Greentree Financial Group, Inc.
Robert C. (Chris) Cottone graduated from Florida Atlantic University with a Bachelor’s degree in Business Administration. Chris co-manages Greentree’s internal emerging growth fund and oversees the capital markets policies and procedures implemented by the firm including new project origination. Chris has experience working on new public listings, SPACs, bridge financing and PIPEs. In this role, Chris has been involved in several business combinations that have exceeded $1 billion in enterprise valuation.
Chris is also responsible for monitoring legislative activities effecting securities issues. With more than two decades of service to the business community, Chris has been instrumental in guiding the careers of many of the nation’s new entrepreneurs. Chris heads many of Greentree’s community awareness programs that contribute to the Global Vision maintained at the firm. He is a frequent contributor to various publications and periodicals and lectures to professional organizations.