this is the story that we shall call: "How We Accidentally Created A "$100,000 Mini-SPAC".
β
First a little background... what the hell is a SPAC?
β
SPAC stands for Special Purpose Acquisition Company. Also known as a "Blank Check" company.
β
Basically - it's when a legit person (like Chamath, or Bill Ackman) goes to the stock market and says: "Give me money, and I'll use that money to buy a great company". β
β
For example:
- 2017 - Chamath launched a SPAC called "IPO A"
- It raised $700M from investors, to go find a company to buy
- 2 years later, IPO A bought a 49% stake in Virgin Galactic, and the stock ticker changed from IPO A --> SPCE
- Investors who gave Chamath the "$700M blank check" have since tripled their money in the 3 years as the stock went from $10 to $30
β

β
He's done ~4 more SPACs in 2020, and has registered every letter in the alphabet (IPO A, IPO B, IPO C etc..). I'm pretty sure he's making ~$100M a pop on these (the rich get richer!)
β
I might do a deep dive about SPACs in a future email, but for now just know - it's a blank check given to someone to go buy a company.
β
This is the story of how we accidentally created a micro SPAC...(a $100,000 blank check company)
β
It all started with a Twitter DM from a guy named Andrew Gazdecki.β
β
Andrew owns MicroAcquire, a website where you can go and buy small SaaS businesses.
β
Basically, instead of starting a business from scratch - you can buy a business that's kinda-sorta-working and make it better.
β
So anyways - Andrew says hey I got an idea. What if we just gifted one of these businesses to someone from your community.
β
Me: what do you mean gifted. Like, give away a business? Oprah style?
β
Him: yeah exactly. We have some micro companies for sale for like $5k, let's give one away.
β
Me: *wheels turning*
β
I agreed on the spot. It's a genius marketing move for him. I have a big community of entreprneurs. He wants to get the word out about his marketplace.
β
This is way more buzzworthy than just running an ad about his site. Giving away a business!
β
This is where things got interesting..
β
I tweeted it out:
β
β

β
*note the off the cuff tone, as if this was my unplanned idea when in reality we had already arranged it before hand. I learned a thing or two watching wrestling (back in the Stone Cold Steve Austin days).
β
Immediately the tweet took off. 2 unexpected things happened:
β
#1 - A bunch of people tweeted that they would chip in $5k too, just for the fun of the experiment.

β
β
Within a day, we hit $100k. I never expected this. There was no promise of equity. This is just a wild experiment (aka kicks & giggles)

β
#2 - And MicroAcquire got a huge surge of traffic.
β

β

β
call me shaan kardashian baby
β
Alright baby - now we had a $100k bankroll, and some pretty impressive operators that we could give the business to.
β
Speaking of bankroll...this newsletter is brought to you by Mercury - modern banking built for e-commerce companies. They aren't just a sponsor, they are the bank I actually use for business.
β
Unlike traditional banking, these guys have super easy to use interface, and integrate with Shopify, Amazon, Stripe etc..
β
Just think about it - most banks sponsor old white guy golf tournaments. Mercury sponsors entrepreneurs like me so I can take time to tell these stories. As a founder, who would you rather roll with?
β
Check out Mercury here. It's one of the startups I wish I had invested in early on.
β
Anyways - back to our story.
β
Over the weekend, I went through about 100 businesses on MicroAcquire.
β
Now tbh - a lot of them are junk. Small side projects someone built, with no clear path to growing into something meaningful.
β
But there were a handful of contenders.
β
I liked 2 categories in particular:
β
a) Shopify Apps - shopify is growing like crazy, and these tend to be sticky once someone installs it in their store.
β
For example, This shopify app ($24k annual recurring revenue) that lets you schedule daily deals for your store.
β
b) Virtual Assistants - there were a couple companies that were offering virtual assistants to companies that can't afford Executive Assistants, but still want help dealing with a bunch of admin work.
β
βThis company had ~$114k ARR and ~$25k profit last year and seemed like it could grow.
β
I'm intentionally not telling you about the companies we liked (so you don't go bid against us), but will reveal that once a deal closes.
β
Last step - who do we give the business to?
β
Andrew went through hundreds of applications, and he short listed some contenders. We had the contenders do a little test ("how would you grow this business?")
β
and then we picked a winner. Here's his original application: https://www.notion.so/Dan-s-Plan-for-SaaS-Success-cd8b51c557774206a104954e7a1fd8eeβ
β
You should look at this ^. It's better than 99.9% of job applications.
β
Why Dan?
- I liked his video message, it was personal, and short.
- He built a landscaping company in high school (employing 12 of his school friends). I like people who have built "sweaty" blue collar companies early in life. Shows hustle.
- He's an engineer, has worked at Tesla, Rivian, etc.. Technical chops are an asset.
- He put his favorite frameworks at the top, which means he knows I have a framework fetish (did his homework)
- He found the sweet spot of "excited" without being "desperate"
β
To recap:
β
β1) From a random tweet, we raised a $100k Blank Check company to help a random hustler buy a business.
β
2) We found Dan, the person we want to give the business to. β
β
He'll learn more from 1 year of buying/growing this business than he could ever learn in business school.
β
β3) Dan will spend the next 60 days digging through MicroAcquire to find the right company to acquire.
β
I'll have Dan write some guest-updates about the journey on this newsletter in the coming months.
β
- shaan