By Mike Houston, Managing Partner, Capital Markets

As discussed in recent blog posts – SPACs, or special purpose acquisition companies, are diverse in their nature, serving as an alternative way for companies to go public while eliminating some of the risk and complexity associated with the typical IPO process.

SPACs have gained momentum attached to celebrities, billionaire investors, and famed CEOs serving as “successful sponsors,” while also removing the time-consuming hurdles of road shows and story pitching to potential investors, but how are they creating value beyond serving as investment pursuits and passion projects for the rich and famous?

Alongside MLB All-Star Alex Rodriguez, NBA Hall of Famer Shaquille O’Neal, and music mogul Jay-Z—all of whom have connections to SPACs within recent months—former NFL star Colin Kaepernick is converting his talents and platform to the capital markets with the introduction of a social justice SPAC.

In connection with Phoenix Suns partial owner Jahm Najafi, Kaepernick has launched Mission Advancement, a SPAC which plans to raise $287 million to eventually acquire a billion-dollar, consumer-focused company with the intent on generating a positive social impact.

In the macro, sponsors have acquired shares at more favorable terms than the general investor, and thus have even prompted the SEC to explicitly warn these sponsors might have a conflict of interest and that their economic interests may differ from that of other shareholders, stating:

“Celebrities, like anyone else, can be lured into participating in a risky investment or may be better able to sustain the risk of loss.  It is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment.” 

Kaepernick’s missions serves differently, however; and to ensure Mission Advancement’s board is aligned with its socially just company conscience, the board of directors is made up entirely of “Black, Indigenous and people of color,” and boasts a majority of females as well.

Unfortunately, this cannot be said of the SPAC environment as a whole. According to a December 2020 Bloomberg report, half of 151 SPACs with dedicated boards have no women serving as directors. And of the total 671 board seats, data showed that women held only 15.5% of these positions.

Naturally, companies that go through a traditional IPO process often consider diversity initiatives within their framework and strategic mission throughout the months ahead of a public offering; however, we are learning that currently SPACs at-large have not shared this priority.

Lambert is united in seeking this change across capital markets, and alongside Kaepernick through SPACs specifically. Our sister company, EQUALSIGN, is a diversity, equity and inclusion consultancy focused on diverse board development for public companies and private equity firms; environmental, social and corporate governance (ESG) consulting and strategic audience engagement; as well as marketing and communications to multicultural demographics.

As stewards of Equity, its collective mission is to create authentic change and build businesses with culture-forward solutions, and we are dedicated to using our experience to drive organizational change within the ever-growing SPACs market.

Interested in learning more? Connect with us today!