What Most Sponsors Get Wrong Before They Ever Find a Target — Bob Brown & Ari Brown

ClearThink Capital structured their SPAC IPO with closing fees under $2 million — at a time when most sponsors are paying $10 to $15 million. Bob Brown helped write the SEC rules that govern SPACs back in 1991. Here's what he and Ari built differently.

Robert "Bob" Brown and Ari Brown, Managing Directors of ClearThink Capital, join Michael Blankenship on The SPAC Podcast to break down what separates a well-structured blank check company from one that's already compromised before a target is ever found. Bob brings over three decades of securities and M&A law experience — including working on the very first SPAC in 1991 and helping the SEC write the rules that govern the structure today. Together, Bob and Ari walk through how ClearThink designed their own SPAC IPO to minimize sponsor-side closing costs, why "deal dementia" quietly kills more transactions than bad targets do, what private companies consistently get wrong when preparing for a de-SPAC, and how the current SEC environment and new administration are reshaping cross-border SPAC deal flow.

🎯 What We Cover:

• How ClearThink structured their SPAC to keep closing fees under $2M vs. the $10–15M industry norm
• Why sponsors must differentiate on deal quality — not just sector focus
• The "deal dementia" trap: how sponsors drift from sound valuation discipline over time
• What private companies consistently miss in audit readiness and PCAOB compliance before a de-SPAC
• Cross-border de-SPAC complexity: double dummy structures, multi-jurisdiction regulatory regimes
• NASDAQ vs. NYSE: what the data actually shows vs. sponsor perception
• The S-1 review delay caused by the government shutdown — and how to plan around process risk
• Why cadence and timeline discipline matter more than most first-time sponsors expect

🤝 Connect with Bob Brown & Ari Brown: 🌐 https://www.clearthinkcapital.com

📩 Connect with Michael Blankenship: 💼 https://www.linkedin.com/in/mikeblankenship/ 🌐 https://www.thespacpodcast.com/

📩 Connect with Joshua Wilson: 💼 https://www.linkedin.com/in/joshuabrucewilson/ 🌐 https://www.thespacpodcast.com/

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Disclaimer: Michael J. Blankenship is a licensed attorney and partner at Winston & Strawn LLP. Joshua Wilson is a licensed Florida real estate broker and holds FINRA Series 79 and Series 63 licensure. The content of this podcast is for informational and educational purposes only and should not be considered legal, financial, or compliance advice. All views and opinions expressed by the hosts and guests are their own and do not necessarily reflect the policies or positions of any regulatory agency, law firm, organization, or employer. Listeners should consult their own legal counsel, compliance teams, or financial advisors to ensure adherence to applicable regulations, including SEC, FINRA, and other industry-specific requirements. This podcast does not constitute a solicitation or recommendation for any financial products or services. Let's 

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Transcript

Ch 1 — Welcome & Introducing ClearThink Capital

SPEAKER_02 0:00

Mike Blankeship here with the SPAC podcast today. I'm joined by with by Robert Brown and Ari Brown from ClearThink Capital. Guys, why don't you just give a quick introduction? Maybe start with you, Robert.

SPEAKER_01 0:12

Sure. My name is Bob Brown. I'm the CEO and managing director of ClearThink Capital. We're a transactional transactional and strategic advisory firm with a focus on, among other things, SPACs.

SPEAKER_02 0:25

Excellent. So, you know, I know you guys just released your first SPAC. So what was it like working for that first SPAC and how are SPACs now different than they were several years ago?

SPEAKER_01 0:40

Do you want me?

Ch 2 — Launching Their First SPAC as Principals

SPEAKER_02 0:42

I'll take it from you, Bob. Go ahead.

SPEAKER_01 0:43

Okay, sure. You know, it honestly it was it was a relatively smooth process for us. We have obviously we have a lot of experience with SPACs. Um as far as doing it as a principal for the first time, it was it was very different doing it as principal. Uh a lot of different concerns, a lot of uh a lot of time spent making sure that that uh sponsor investors understand the mechanics and so forth. Uh but as far as the the differences between our spec and and spacks we've seen historically, you know, we've been able to keep the expenses very, very low. So we had a great partner in DBRL that kept the underwriting discount very low with no back end. Uh great partners with council and others who were willing to work with us to keep those expenses down, with the the real goal of making the SPAC as attractive as possible on the back end.

Ch 3 — How ClearThink Structured Sub-$2M Closing Fees

SPEAKER_00 1:38

Yeah. To add to that, and this is this is Ari Brown, you know, before we formed the SPAC, we really looked and said, you know, what are the issues that cause SPACs to be unable to close deals or for deals to perform poorly post-close? And the goal with the SPAC was to structure around that. So one of the biggest things was the high SPAC-side fees that many SPACs have on the close of a transaction, regardless of redemptions. So, like Bob said, we we you know have great professionals we're working with who have uh been very reasonable with their fees. And we brought a lot of the other services um in-house. So we plan to do the MA banking and advisory work in-house. Um, as Bob, he hasn't gotten into his background yet, but as he was a securities and MA attorney for 25 years, he can do a lot of the preliminary legal work. Um, we have diligence teams in-house as well. So for us on the close of our transaction, we expect our SPAC side fees to be sub-2 million dollars. When in many cases you have, you know, between deferred underwriters' fees, council, um, MA, bankers' fees, you know,$10 to$15 million of fees.

Ch 4 — What Sponsors Get Wrong When Searching for Targets

SPEAKER_02 2:52

So all right, what you know, talking about sponsors, what can sponsors do to improve sort of the SPAC's performance as they're looking for targets or or just in general?

SPEAKER_00 3:04

Yeah, I mean, you know, I think uh there are two sides to it. You know, on one on one hand, I think a lot of sponsors fail because they look for the perfect deal. And there is no perfect company. You know, perfect doesn't exist. You have to find a very solid company that that you know has strong fundamentals and will perform over time. Um the the other side to that is you don't want to um merge with something that's so overvalued that um you know, so so early and overvalued that it's going to tank post-close and it's going to be difficult to meet whatever that cash requirement is.

SPEAKER_02 3:45

And Bob, what when you look at ClearThink, you know, one acquisition corp, uh how are you distinguishing that? I mean, there's 200 spacks out there. How do you distinguish yourself? You know, what is your target that you're looking for? What's what's the ideal um target for your for your spec?

SPEAKER_01 4:05

Sure. I I don't know that there's necessarily an ideal target. I would say reasonable value, reasonable requirements as to cash on the back end, uh a solid business, very solid management. You know, we're fortunate in that as part of the ordinary course of our business, we're approached by a reasonably large number of companies looking to explore a SPAC merger. So we've had the the great benefit of just even over the last several months, reviewing dozens and dozens of companies that that really could qualify and then pick trying to pick as close as possible to what would be an ideal target and uh and working with them going forward.

Ch 6 — The Most Complex De-SPAC They've Ever Worked On

SPEAKER_02 4:49

Yeah, and so Ari, you guys have worked on a bunch of other SPAC deals, not your as a principal, but what are some of the most complex ones you've been part of and and how did you maximize that's the SPAC success for that or advising on that?

SPEAKER_00 5:05

Sure. I I'll let Bob address that because I know which which transaction he's gonna refer to.

SPEAKER_01 5:10

So we worked on a transaction where we took a public company in Australia, uh, took it out of the Australia Stock Exchange and out of the jurisdiction of the Australia Securities Commission and merged it with a SPAC here. Uh it was literally among the transactions I've done over my entire career, maybe the most complex transaction. Um, we had to use a double-dummy structure where you had regulatory regimes that that were applicable in the US, Australia, Israel, Ireland, and several other jurisdictions. But uh completed completed the transaction, and you know, it's it's sort of a case where you look and you say, How do you eat an elephant? It's one bite at a time. So you sort of work your way through each of these issues and each of the steps and put together a solid deal.

Ch 7 — Cross-Border SPACs: New SEC Posture & Jurisdiction Strategy

SPEAKER_02 5:58

Yeah, and speaking of like non-US VAC deals versus US, I mean, do you see some of the complications coming into the United States? And maybe talk about it from a perspective of looking at from you know regulatory. So the SEC's changed, right? We have a new administration. So how do you see that right now?

SPEAKER_01 6:18

Well, certainly the the administration is far more receptive to SPACs and sort of non-conventional finance. Uh there are jurisdictions that I think the the administration is more lenient towards and those that they're more more stringent towards. So I mean, looking at Europe, looking at Israel, looking at at Singapore, uh, number of other jurisdictions, I think that there's a not only a willing uh receptivity at the SEC to entertain these transactions, but also in the capital markets. Uh, when you start to look at some of the other jurisdictions, whether that's that's China or otherwise, it's become more difficult. So we've really tried to limit our search to those jurisdictions where we think we'll we'll have the most receptivity.

Ch 8 — NASDAQ vs. NYSE: What the Data Actually Shows

SPEAKER_02 7:07

Yeah, I I think I know what you're talking about when you say there are certain ones they don't want to go. What about the stock exchanges? What are you seeing there versus you know NASDAQ versus NYC?

SPEAKER_01 7:17

You know, we haven't done we haven't done a lot with the New York Stock Exchange on on this current generation of SPACs yet, but certainly from the standpoint of seeing other transactions coming to market, there there seems to be receptivity from Nasdaq and the New York Stock Exchange. Uh, we do have some international transactions that we're entertaining currently, so I I guess we'll find out soon.

SPEAKER_00 7:39

Yeah, we definitely have seen some people um you know have opinions one way or the other. Um, you know, some people view New York Stock Exchange as as you know more prestigious or NASDAQ is more prestigious. We found that most of that is just based on you know personal personal opinion than than real factor data. Um yeah, we haven't seen seen much of a difference.

SPEAKER_02 8:06

So let's um let's Bob, let's go back to ClearThink and working with operating companies, you know, well before you talked about the non- you know, non-US but and US. What are some of the common readiness gaps that you see as you're you know working with these private companies looking to go public?

SPEAKER_01 8:22

Sure. Uh obviously audit is the biggest issue in that there number one, you have different different gaps around the world if they're audited at all. And even if they are audited, most of those audits don't meet PCAOB requirements. So they require some degree of in your best case scenario, additional fieldwork. Uh, in your worst case scenario, complete re-audit. So that's that's been the biggest issue. But also from a corporate structure standpoint, uh, we find certain jurisdictions tend to be more, let's say, personality-based in their management, and that you tend, even with large companies, to have a handful of people who are often related, who tend to manage everything with very little outside supervision. So building that board, building the controls, uh, assisting them and putting everything in place can be really some of the most time-consuming aspects of our diligence process.

SPEAKER_02 9:19

Yeah. I mean, the the gap is sometimes tough. Private companies just don't aren't as organized and get it. You know, if you go back in time and you were to talk talk to yourself six months ago before you did your own SPAC, what are there any advice that you would give yourself uh kind of going forward, even though you've been in the SPAC game for a while?

SPEAKER_01 9:37

I I would just say be patient. You know, things always take longer than you think. Uh whether it's whether it's the banking or the drafting or whatever it happens to be. You know, I think we were very fortunate to have a strong team and everyone gave really strong efforts to get everything done. But everything takes longer than you think it's going to take. And I would say from our standpoint, that was the number one feedback that I got from the outside sponsors that we brought in, is sort of an understanding gap as to how long it takes to really draft something, how long it takes to go through an audit, even with a new company. So I would just say to be patient.

SPEAKER_02 10:18

Yeah, and Ari, what about yourself working with it?

SPEAKER_00 10:22

Yeah, I agree. You know, we had um mid-uh mid-process, uh, a government shutdown that caused, um, I think it was um, Bob, you can correct me if I'm wrong, but it's 70 days from when we filed our S1 to when we heard back. So uh, you know, you don't expect things like that, but uh just just expect the unexpected.

SPEAKER_02 10:46

Yeah, just so you know, or you might be seeing is that uh the SEC is now no reviewing, so I've done at least half a dozen now where they're just not even reviewing the S1. So it's a different different market because the government was shut down for 43 days. And if you filed on that September 30th date, um, you know, you were you were gonna be waiting. So I get it. That's tough. So was there anything else, you know, you would you know, piece of advice you would get somebody that may be a sponsor or a player in player in the ecosystem, um, that you know, you guys given the advisory work you do on the back end, but also now on the front end you've done it, you know, what what other piece of advice? I get this, you know, be patient, but is there anything else like I'm a sponsor, I want to raise money, I want to get this back done. What what would you uh tell them?

SPEAKER_01 11:38

Uh I would tell them differentiate yourself and try to put together as high a quality deal as possible. That people tend to get deal dementia. So the value suddenly doesn't matter so much, the structure doesn't matter so much, they tend to sort of wander further and further away from the point where a deal would be uh an easy deal to get done and and frankly, market acceptable. So you know, you we've all seen transactions that come out and and they're just overvalued or they're structured poorly, or that frankly the back end is structured in such a way that there's tremendous downward pressure on the stock. So to to differentiate yourself, to try to to uh put together really a high quality uh transaction, uh would be the advice that I'd give to anyone who's going out.

SPEAKER_00 12:34

I would say, you know, build build a strong team and you know, a strong team should have uh you know one expertise in whatever sector you're focused on. Um if you have a specific sector focus, you know, two people who have experience um experience executing transactions, um you know, people who have spAC experience, um, and and people who really are going to go, you know, get in the weeds and and do the work that that has to be done. Um the other thing I would say is you know keep a good cadence. So it can feel uh at the start like you have plenty of time, but very quickly it feels like you have no time at all. So, you know, move move as quickly as possible, talk to all your targets as quickly as possible and narrow down and move forward as quickly as possible.

SPEAKER_02 13:30

Great. Well, that's certainly good advice. Um well, I appreciate you coming in and speaking with me. Um, you know, it's uh a lot in the SPAC market now. We see a lot of activity and and congratulations again on on the success of uh your SPAC IPO. And you know, hopefully you find that uh near perfect target uh as you're going through. So again, thanks again, Bob and Mari.

SPEAKER_00 13:54

Thank you, thank you, Mike, for having us on.

SPEAKER_02 13:57

This is Mike with the SPAC podcast.