The $4B blank check


August 25, 2020

Plus: Aerospace AI feels the need… the need for speed.
August 25, 2020
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Earlier this year, Sam flew to NYC for a podcast with Gary Vee. During their chat, Gary was adamant that sports cards were the next big thing.

On Saturday, baseball star Mike Trout’s rookie card sold for a record $3.9m. We can neither confirm nor deny that anyone from The Hustle is the buyer.

The Big Idea

The hottest trend in finance? ‘Blank check companies’

What do Virgin Galactic (space exploration), Nikola (EV trucks) and DraftKings (sports gaming) have in common — other than the letter “a”? 

All 3 went public through a special purpose acquisition company (SPAC), a financing arrangement that’s gone gangbusters in recent months. 

Also known as “blank check companies,” SPACs raise money from the public for the express purpose of merging with an existing company.

SPACs were founded in the 1990s

But they’re having a moment in 2020: So far this year, we’ve seen 78 SPAC IPOs — more than any year on record. 

DraftKings (April) and Nikola (June) both went public with SPAC mergers.

Hedge fund manager Bill “don’t call me SPACman” Ackman recently raised the largest SPAC ever. Investors gave him a $4B blank check to “marry a unicorn” (AKA billion-dollar private tech company).

Even former House Speaker Paul Ryan — I repeat, Paul Ryan — is getting in on the action.

Why are people SPAC-ing?

Anuj Abrol — founder of the Witty Wealth newsletter — tells us why market participants are hot for SPACs:

  • Sponsors (AKA parties raising SPAC funds): They get 20% of the SPAC just to run it and, often, only have to put up <5% of the money.
  • Companies: Private companies can avoid the onerous (and long) IPO process and go public by dealing with one entity (the SPAC). 
  • Investors: Get access to higher-risk/higher-reward companies that would otherwise not go public via the IPO process.

And, there’s no end in sight 

With markets relatively frothy, those looking to cash in on the good times can certainly benefit from the speed advantage that SPACs offer.

Just yesterday, Bloomberg reported that Peter Thiel-backed Luminar Technologies (a driverless car startup) is hitting public markets using the SPAC track. 

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Snippets
Need for… Props

Top Gun fans, unite: Hollywood is hosting a massive movie-prop sale

If you thought the toilet paper aisle felt like The Purge this spring, just wait for this $6m+ auction. 

A record number of people have registered for the 850+ item sell-off from Prop Store, a movie collectibles vendor. 

Among the props up for grabs (with estimated auction price):

  • Obi-Wan’s lightsaber hilt from the original Star Wars ($25k-$35k)
  • The Maverick helmet from Top Gun ($50k-$70k)
  • The 11-foot spaceship from Alien ($300k-$500k)
  • Walter White’s hazmat suit from Breaking Bad ($4k-$6k)
  • Edward Scissorhands’… scissor hands ($5k-$7k)
  • James Bond’s passport from Die Another Day ($2k-$3k)
  • The game board from Jumanji ($60k-$80k)
  • A T-Rex armature from Jurassic Park ($25-$35k)

A few pandemic-specific recommendations

After studying the complete catalog, here’s what we think can spice up your quarantine: 

  • Forget athleisure. It’s time to blow away your coworkers with the Spartan outfit from 300 ($6k-$8k)
  • I don’t care how good your headphones are; aesthetically, they just can’t beat the Brain-Computer Interface Headset from the sci-fi movie Brainstorm ($10k-$15k)
  • Snag Marty McFly’s dehydrated Pizza Hut wrapper from Back to the Future Part II, and you’ll never need to buy a plate again ($400-$600).

Interested? Bidding starts this Wednesday at 10am PST.

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Danger zone

AI is getting good at fighter jets. What does that mean for humans?

Weeks after GPT-3 had writers sh*tting bricks, fighter jet pilots are now on high alert. 

The Defense Advanced Research Project Agency (DARPA) recently held a tournament pitting algorithm against algorithm to see which model could become king of the sky.

Last year — according to a DARPA official — AI fighter jets could “barely prevent [themselves] from crashing.” Now, they’re making moves that look like actual aerial fighting.

Machines aren’t taking over the air just yet

But experts are examining opportunities for crewless fighter jets to play wingman.

They could fly ahead on scouting missions, or tackle low-level tasks while pilots act as “battle manager.”

A boon for the defense industry  

Per McKinsey, AI and automation has the potential to create ~$50B in value for the aerospace and defense sector.

Already, aerospace companies are hard at work developing hardware for pilotless jet-type drones.

  • Kratos makes an uncrewed aircraft dubbed the Valkyrie.
  • Boeing’s got a jet nicknamed the Loyal Wingman.

We’ll fly with that. 

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Faux meat

The ‘Tesla of chicken nuggets’ is using memes to stand out in the race to replace meat

As the world looks for more sustainable protein sources, funding in the alt-meat space has surged.

Through July of this year alone, alt-meat startups have raised $1B+, more than double last year’s haul.

One fast riser: SIMULATE — the startup behind plant-based NUGGS (AKA the “Tesla of chicken nuggets” 😂), has raised $11m+ from investors including frozen food giant McCain Foods.

It’s creating hype like a streetwear brand

The nutrition tech startup recently did a “drop” of Spicy NUGGS, which sold out 1k boxes in 16 minutes and led to a hilarious Instagram exchange with supermodel Bella Hadid.

Another meme-tastic move includes release notes (like software updates) for each new product improvement (i.e., “increased fiber”).

And its pricing page gives options of 2 lbs. ($34.99), 4 lbs. ($44.99) and 420 lbs. (“you don’t need this” LOL).

Nuggets are only the beginning

Like Hadid (we’re basically spirit animals), The Hustle had some fun with the NUGGS social team: we did a chicken nugget taste test vs. McDonald’s and Wendy’s.

We also caught up with SIMULATE’s 20-year-old founder Ben Pasternak, who told us what’s next for his hot startup: hot dogs (DOGGS) and chicken tenders. 

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TRENDS

These 30 minutes will change the way you work

Turns out, there’s a scientific reason you’re unproductive. And science can help you turn the tide.

Anne-Laure Le Cunff — ex-Googler, Ness Labs founder, and neuroscience student — is joining the Trends team this Thursday to help turn the unproductive productive.

Mindful Productivity for Entrepreneurs will walk viewers through proven strategies for finding more productive and rewarding work. 

In this live event, Anne-Laure will share:

  • Neuroscience-based strategies to fight procrastination
  • How to make the most of your time without burning out
  • The productivity mistakes most entrepreneurs make
  • The difference between habits, routines, and rituals
  • How to design your own mindful productivity framework
  • And more!

RSVPs for the session are open now and free for all Trends subscribers. 

Not a Trends subscriber? 

Start today for just $1. Get access to this session, and our archive of 15+ Trends lectures with entrepreneurs and business leaders from dozens of industries — plus a whole landing page-load of other features.

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Editing by: Zachary “Iceman” Crockett, Ernest & Julio Hemingway (Literary Critics).

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