Seignorage

This week, Apple co-founder Steve Wozniak took public his new company, Acquicor Technology, in an IPO that raised $150 million. Obviously, the first question is, "What does this company do?" And that's where it gets interesting, because the answer is, absolutely nothing. According to its SEC filing, Acquicor Technology is a "blank check" company. They have two years to choose a mission, and it can be anything they want.

These investors have bought Wozniak's reputation, nothing more. And if that weren't enough, the same shares which cost $6 apiece to the public were sold to the company's three executives at four-tenths of a cent — in other words, those three men have already profited more than $30 million, based on absolutely nothing.

I spoke last week to a consultant who advises venture capital firms on potential investments. He said that he looks at hundreds of business plans every month, but he said that he mostly looks at the people. His clients aren't investing in an idea, after all; they're investing in a person's ability to make it work. There are a thousand bad ideas that have nonetheless struck gold, and there are even more good plans that have run aground. Conception and execution are worlds apart.

But you need a concept to execute, and using your name as a fundraiser doesn't qualify. Faith is good; blind faith is not. Steve Wozniak just made himself another $10 million by virtue of being Steve Wozniak. How much irony can you stand: Venture capitalists are buying shares in blank check companies.