Introducing a SPIC
in a sea full of SPACs

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Special Purpose Investment Company (SPIC)

With 200 SPACs going public in 2020, it would be safe to say that the SPAC-fad, as I would like to call this recent enthusiasm, is here to stay. Raising nearly as much as all the IPOs collectively, SPACs have been at the centre of discussions for many companies that want to go public during the pandemic. 

Special Purpose Acquisition Companies (SPACs) have been around for many years. But their popularity has increased immensely amid recent developments. The volatility COVID-19 brought in the investment market has given rise to less traditional solutions that offer speed and stability in securing adequate funding. 

Getting their name from their unique feature of raising money to acquire new companies, SPACs have attracted the interest of many high-profile CEOs, proclaiming that they are challenging the traditional IPO fundraising process. 

Jumping in the discussion of whether SPACs are the next-big-thing in the investment landscape, one thing that finds me sympathetic is the need to revolutionize the way we invest in companies. In our quest to transform venture capital, we stumbled upon many bumps. The most important ones concerned legislation and restrictions regarding running an evergreen structure in Europe and Singapore. So, focusing on the Problem at hand, we have created a new structure to fund start-ups, the SPIC.  

SPIC

Combining start-up scaling expertise with advanced technology, at Venturerock we have designed a new investment protocol. Investing in multiple rounds from pre- seed to scale, this protocol implements the legal and operational processes needed to safeguard the ventures’ success, and it is organized in 5 main pillars: 

 

Centralized around a Special Purpose 

A SPIC has a specific vertical and a clear Problem Statement. In other words, it has a special purpose to play in revolutionizing the current systems. All investors and mentors that join the cap table of a SPIC are coming from the same vertical and have a connection with the Problem Statement.  

Our ventures are 100% owned by the SPIC, and new founders commit themselves to helping solve the defined Problem Statement. Founders will receive a share based on the progress they are making. Early revenue translates to more shares, while more capital to less shares. 

 

Start-up CooP 

We have fully digitized the cap table, based on the Co-Operative Legal Framework many European corporates utilize. This makes it possible for start-ups to adjust their operations as they pass through the phases of growth allowing them the agility in bringing the right talent onboard and managing business risk. 

The framework is flexible enough to allow for notary-independent ownership and share exchange, while it prepares founders to allocate the needed resources throughout their different business phases. By tokenizing shares we eliminate investment process complexity, and we enable the free flow of capital within the venture ecosystem. 

 

Metered funding 

We guide our ventures from seed to scale and allocate investments based on 3 datapoints that derive from our metered assessment process. Depending on the ventures’ readiness level, deal-flow and phase-specific criteria, we move them across the 4 investment phases of respectively €50K (phase A), €150K (phase B), €500K (phase C) and a maximum of €1.5M (phase D).  

In this way, we ensure that everyone’s interest is aligned and targeted into making the venture a success. 

 

Focus on execution, instead of funding 

Within our framework we digitize the investment supply chain from cap table to KPI reporting and legal agreements. This enables our founders to focus 100% on execution instead of spending an average of 60% of their time fundraising in the first 3 years.  

By simplifying the investment process, we alleviate funding concerns and make our companies investable from day 1. 

 

Value creation 

The entire supply chain of the startup is part of the carry. Everyone involved in the growth process works for a startup fee and receives tokens based on the value they create. Tokens correspond to a share portion in the carry of the whole portfolio.