SPACs vs. Traditional IPOs: Insights from Emergence Capital’s Jason Green
Jason Green, co-founder of Emergence Capital, has built a reputation as a visionary venture capitalist in the enterprise software space. With a track record that includes early investments in Zoom, Salesforce, and Box, Green offers unique insights into today’s evolving IPO landscape—particularly the rise of SPACs versus traditional public offerings.
The SPAC Boom: A New Path to Going Public?
TechCrunch (TC): There’s been growing debate about whether SPACs are primarily for companies that lack the revenue to pursue a traditional IPO. What’s your take?
Jason Green (JG): This year has been unprecedented for SPACs, with roughly $50 billion raised. These SPACs must deploy capital within 12–18 months or return it to investors, creating intense pressure to find viable targets.
- High-growth, profitable companies will likely opt for traditional IPOs.
- SPAC candidates tend to be firms with strong growth but either:
- Slower growth than top-quartile public companies (yet slightly profitable), or
- Rapid growth with significant cash burn, which might deter traditional IPO investors.
“SPACs act as a ‘private-plus’ round—ideal for companies not quite ready for a conventional IPO but eager to go public.” — Jason Green
SPACs in Practice: Founder Sentiment and Market Uncertainty
TC: Are portfolio companies actively considering SPACs?
JG: We’ve begun these conversations, but most founders still dream of a traditional IPO. SPACs appeal to companies eyeing another private round first—they’re a hybrid solution for the “tweener” stage.
TC: With the U.S. election over, does this reduce market uncertainty?
JG: Not necessarily. Between political shifts, pandemic resurgences, and vaccine rollouts, volatility persists.
- Early 2021: SPACs may dominate as public markets favor fewer, higher-quality listings.
- Late 2021: Traditional IPOs could rebound as economic stability returns.
Emergence Capital’s Evolving Investment Strategy
TC: How has your deal flow changed in 2020?
JG: We’ve shifted to a data-driven, thesis-led approach:
- Outbound outreach to founders post-seed funding.
- Deeper relationships built 12–18 months before investing.
- Record deal volume despite COVID-19, leveraging Zoom to evaluate 50–100% more startups.
Emerging Themes in Enterprise Investing
- Coaching Networks
AI-enhanced human collaboration (e.g., SalesLoft, Guru, Drishti). - Vertical SaaS
Industry-specific solutions (e.g., Veeva in healthcare, p44 in logistics). - Remote Work Ecosystems
Platforms like Zoom spawning niche tools (e.g., ClassEDU for education).
Lessons from Missed Opportunities
TC: Any notable companies you passed on?
JG: Coupa stings—we hesitated at an $80M valuation; today it’s worth $20B. But venture capital isn’t zero-sum. The right investors shape outcomes, and hindsight isn’t always actionable.
Key Takeaways
- SPACs fill a gap for companies between private rounds and IPO readiness.
- Traditional IPOs remain aspirational, but market conditions favor flexibility.
- Emergence’s focus on AI, vertical SaaS, and remote work reflects shifting enterprise demands.
For more on SPACs, explore TechCrunch’s SPAC explainer.
