Friday Letter: SPACs dominate and other takeaways from capital raising panel

A panel hosted by financial services firm Capital discussed understanding what makes the modern investor's job difficult. The panelists also pored over one of the most popular subjects of the past year: SPACs.

The current environment for raising private capital is frothy, and although there was a pause in activity last March and April, it’s like the pandemic never happened since it’s had little impact on capital raising.

That was one of the takeaways from Howard Morgan, co-founder and chairman of B Capital, who’s perhaps better known as co-founder of First Round Capital, during a panel I moderated yesterday called “Unlock the Capital Markets in 2021.”

I moderated the virtual panel for Capital, the New York financial services firm, and speakers included Morgan; Chris Gaertner, global head of technology at Rothschild & Co; Ashley Fieglein Johnson, CFO of venture-backed Planet; and Blair Silverberg, CEO of Capital.

The foursome talked a lot about today’s capital-raising environment, how to weigh the options of debt vs equity and, of course, SPACs. In fact, SPACs was a topic du jour, judging from the questions that came in over the Zoom chat from the 200-plus attendees.

As Gaertner said, whether the funding option is a SPAC or a direct listing, the options have gained in popularity recently because the IPO market is broken. That seemed to be a given across the panel. “SPACs as a mechanism to go public are not for every company, and they’re not meant to solve equity funding problems, but there are benefits,” Gaertner said.

Debt vs equity was another theme discussed during the panel, with the speakers noting that rates are low now and companies should only take on debt if they know they can pay it back. Morgan added that he’s seeing more debt transactions involving SaaS companies.

The panelists talked about everyone being on the same page during the fundraising process, including investors and the companywide executives. And Johnson said it was important for companies seeking capital to have a good, solid story to tell investors.

But, overall, the issue of SPACs dominated the discussion, and we can expect they’ll remain a hot topic throughout 2021.

Speaking of which, at the end of the roundtable, I asked the panelists what they were looking forward to in 2021. Morgan had the line of the day when he said: “That it’s no longer 2020.”

Let me know what you think. I would like to hear from you about financing options and the growth of SPACs, and how they’re impacting the venture community. You can drop me a line at, and I’m happy to chat.