SPAC Lessons from Realtopea: When Money Isn’t the Strategy
My first venture outside music — Realtopea, an entertainment company born from a social club — was a rush. Then came the SPAC pitches. Tempting? Absolutely. Smart for where we were? Not even close. Here’s the straight talk and the playbook I wish every founder had.
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A SPAC raises cash via IPO, then has a short window to merge with a private company so that company goes public fast. It can unlock capital and access — but the clock, fees, and incentives aren’t built for your growth story; they’re built to get a deal done.
What I Learned Saying “No”
- Systems first, capital second: Without repeatable systems, methodologies, and governance, fresh money accelerates chaos.
- Dilution is real: Sponsor promotes and deal terms can carve out a big slice before you see growth.
- Deadline pressure: Two-year clocks push deals to close, not to mature.
- “SPAC-offs” (competing bids) can inflate price — great for sellers, rough for future returns.
- Mindset matters: As CEO, my head wasn’t where it needed to be yet. Better to build capacity than sell the wheel and keep the car.
SPAC Pros vs. Cons (Quick Scan)
- Pros: Faster path to public markets; potential brand credibility; capital for scale.
- Cons: Dilution; fee stack; timeline pressure; misaligned incentives; post-merger scrutiny without the muscle memory.
Founder Checklist Before You Even Enter the Chat
- Operating System: Documented processes, dashboards, and governance.
- Unit Economics: Real customer LTV/CAC, gross margin, retention, and path to profitability.
- Story Discipline: Investor-grade narrative backed by data, not vibes.
- Leadership Readiness: Executive bench, audit readiness, public-company hygiene.
- Term Sheet IQ: Understand promote, earnouts, redemptions, fees, and lockups.
Realtopea didn’t have the scaffolding yet — and that’s okay. I walked away, launched new ventures, leveled up my operating mindset, and came back stronger. The lesson: money accelerates what already exists. Build well, then scale.