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On Tuesday, a new SPAC from VC and All-In podcast host Chamath Palihapitiya became a public company<\/a>. Dubbed with the lofty name \u201cAmerican Exceptionalism,\u201d it raised $345 million with a mission to acquire one or more startups in the fields of energy, AI, crypto\/DeFi, or defense, then convert those companies into publicly traded entities.<\/p>\n But Palihapitiya wants retail investors to know: He strongly advises you not<\/em> to buy the stock, even though he has reserved a tiny fraction \u2014 just over 1% \u2014 to be traded on the public markets for retailer investors, while 98.7% has already been sold to hand-picked, large institutions.<\/p>\n \u201cI want to temper retail investors\u2019 involvement with my SPACs,\u201d he posted<\/a> on X and later posted<\/a> again, \u201cWe designed it this way, almost entirely institutionally backed, because, as I have learned, these vehicles are not ideal for most retail investors. They are for investors who can underwrite the volatility, place it as part of a broader structured portfolio and have the capital to support the company over the long run.\u201d<\/p>\n It isn\u2019t typical for someone to launch an IPO and then tell people not to buy the stock. He even goes as far as to give a buyer-beware warning to any retail investor (like among fans of the uber-popular All-In pod) who wants to ignore his recommendation and buy anyway. \u201cFor anyone in the retail market who still chooses to disregard my advice to avoid SPACs, please carefully review our disclosures and make a fully informed decision.\u201d<\/p>\n The reason for these warnings is somewhat entertaining. Palihapitiya practically single-handedly sparked the rise of SPACs from 2019 to 2021, granting him the title of \u201cSPAC King.\u201d This came after his first SPAC, Social Capital Hedosophia Holdings (IPOA), raised $600 million and took Virgin Galactic public in 2019. (It now trades for under $4, by the way.) SPACs took off, seen as a fast-track to going public during the venture capital valuation bubble.<\/p>\n But, within a few years, the numbers showed that while SPACs might be lucrative for the SPACs\u2019 sponsors like Palihapitiya and sometimes for the acquired startup, they rarely made investors money. Or as the Yale Journal on Regulation<\/a> put it: \u201cSPACs have delivered poor post-merger returns to shareholders for many years.\u201d<\/p>\n Goldman Sachs even banned itself from underwriting them for three years. In June, it ditched that ban and began working with SPACs again, prompting Palihapitiya to post a poll on X asking, \u201cShould I launch a SPAC?\u201d<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tSan Francisco<\/span> Nearly 58,000 people voted and overwhelmingly voted no (71%)<\/a>. That\u2019s because Palihapitiya\u2019s track record was no better. In June, MarketWatch compiled<\/a> records of the abysmal performance of nearly all of his SPACs, showing many were down over 90% from their launch date.<\/p>\n When launching this new SPAC this week, Palihapitiya still argued that SPACs are good for the startups, as well as their employees and early investor VCs.<\/p>\n \u201cThe reason to return now is simple. The imbalance between private and public markets has only widened,\u201d he wrote on X, citing the even larger number of unicorns today than in 2019. \u201cEmployees are often holding paper wealth that is difficult to convert into liquidity. Early investors find it more challenging to reinvest capital in the next generation of startups.\u201d<\/p>\n But he also acknowledged that \u201cit hasn\u2019t been all roses.\u201d Hence the warning to retail investors. (Social Capital declined to comment further.)<\/p>\n He says he\u2019s trying to address some of the worst criticisms: that SPACs enrich the vehicle\u2019s sponsors at the expense of everyone else.<\/p>\n With \u201cAmerican Exceptionalism,\u201d he says he has structured payouts so that the sponsors\u2019 tranches of stock won\u2019t vest until stock prices hit 50%, 75%, and 100% increases. \u201cIf the deal is a dog, no one wins. If it is a winner, we will all win \u2026 together,\u201d he wrote.<\/p>\n The question remains though: With all that we know in 2025, should a startup choose to go public via SPAC, be it through Palihapitiya\u2019s or any SPAC? History would indicate: probably not, if they want their stock to perform well long term.<\/p>\n<\/div>\n
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\n\t\t\t\t\t\t\t\t\t\t\t\t\tOctober 27-29, 2025<\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n