View:
United States securities and exchange commission logo
October 14, 2021
Mark Farrell
Co-Chief Executive Officer, Co-President and Chief Financial Officer
Thayer Ventures Acquisition Corp
25852 McBean Parkway
Valencia, CA 91335
Re: Thayer Ventures
Acquisition Corp
Registration
Statement on Form S-4
Filed September 16,
2021
File No. 333-259570
Dear Mr. Farrell:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Form S-4
Prospectus Summary, page 27
1. Please clarify if the
sponsor and its affiliates can earn a positive rate of return on their
investment, even if
other SPAC shareholders experience a negative rate of return in the
post-business
combination company.
2. Please revise the last
Question and Answer on page 11 and where appropriate to address
the PIPE financing
closing condition. It appears the condition cannot be waived, and the
opportunity should be
provided to vote separately on the issuance of shares in connection
with the merger and the
PIPE financing.
3. Regarding the PIPE
transaction disclosure on page 31, please highlight material
differences in the
terms and price of securities issued at the time of the IPO as compared
Mark Farrell
FirstName LastNameMark Farrell
Thayer Ventures Acquisition Corp
Comapany
October 14,NameThayer
2021 Ventures Acquisition Corp
October
Page 2 14, 2021 Page 2
FirstName LastName
to private placements contemplated at the time of the business
combination. Disclose if
the SPAC s sponsors, directors, officers or their affiliates will
participate in the private
placement.
4. We note your disclosure titled Interests of Thayer's Directors,
Officers, and Others in the
Business Combination on pages 31 and 32. Please highlight the risk
that the sponsor will
benefit from the completion of a business combination and may be
incentivized to
complete an acquisition of a less favorable target company or on terms
less favorable to
shareholders rather than liquidate.
5. Please revise the conflicts of interest discussion at the summary
level contained under the
heading Interests of Thayer's Directors, Officers, and Others in the
Business
Combination on pages 31 and 32 so that it highlights all material
interests in the
transaction held by the sponsor and the company s officers and
directors. This could
include fiduciary or contractual obligations to other entities as well
as any interest in, or
affiliation with, the target company, or whether the directors or
sponsor were required to
vote in favor of a presented initial business combination. In
addition, please clarify how
the board considered those conflicts in negotiating and recommending
the business
combination.
6. Please expand your conflicts of interests disclosure on pages 31 and
32 to include whether
the sponsor has any ownership interest in the target company. Should
the sponsor have an
ownership interest in the target company, disclose the approximate
dollar value of the
interest based on the transaction value and recent trading prices as
compared to the price
paid.
7. We note that the sponsor has agreed to waive its redemption rights.
Please describe any
consideration provided in exchange for this agreement.
8. Revise your disclosure on page 39 that illustrates the potential
impact of redemptions on
the per share value of the shares owned by non-redeeming shareholders
by including a
sensitivity analysis showing a range of redemption scenarios that not
only includes
minimum and maximum redemption levels, but also interim redemption
levels.
9. We note the statement on page 99 that the parties agreed to the UP-C
organizational
structure for tax and other business purposes. Please revise to
clearly explain in terms
understandable to the average investor what the tax and business
purposes are and the
extent to which the structure is unusual compared to other mergers and
initial business
combinations by SPACs. Additionally, we note the statement on page 150
that PubCo
will be required to make payments under the TRA. Please clarify why
such payments do
not "give rise to any significant business or strategic benefit or
detriment."
10. With respect to the UP-C structure, please identify the Flow-Through
Sellers and disclose,
if material, any economic differences or potential economic
differences between the Class
A common stock held by the public and interests held by the
Flow-Through Sellers and
others. Please clearly explain any such differences and risks they
pose to public
Mark Farrell
FirstName LastNameMark Farrell
Thayer Ventures Acquisition Corp
Comapany
October 14,NameThayer
2021 Ventures Acquisition Corp
October
Page 3 14, 2021 Page 3
FirstName LastName
stockholders.
Risk Factors, page 49
11. We note your disclosure of the risk of dilution of the value of
shareholders shares in the
combined company on pages 80, 86 and 95. Please revise to disclose all
possible sources
of dilution and the extent of dilution that shareholders who elect not
to redeem their shares
may experience in connection with the business combination. Provide
disclosure of the
impact of each significant source of dilution, including the amount of
equity held by
founders, convertible securities, including warrants retained by
redeeming shareholders, at
each of the redemption levels detailed in your sensitivity analysis,
including any needed
assumptions.
12. We note your disclosure on page 88 concerning the material risks to
unaffiliated investors
presented by taking the company public through a merger rather than an
underwritten
offering. Please revise your disclosure to include not only the risk
presented by the
absence of due diligence conducted by an underwriter, but also that
such an underwriter
would be subject to liability for any material misstatements or
omissions in a registration
statement.
Unaudited Pro Forma Condensed Combined Financial Information
Note 4. Net loss per share, page 109
13. Please tell us how you calculated pro forma basic and diluted loss per
share, assuming no
redemption and assuming maximum redemption, for all periods shown.
Based upon the
amounts on the schedule on page 110, it appears that pro forma net
loss for the year ended
December 31, 2020 should be $0.05.
Background of the Business Combination, page 120
14. Please expand your background discussion to provide more detailed
disclosure regarding
key negotiation considerations and how they changed over time.
Currently the
background disclosure references negotiation topics without providing
details or
explaining their significance or how they may have changed before
being reflected in the
proposed initial business combination. As examples only, please
further explain the key
terms and negotiated items involving "a proposal for a business
combination" on page
121; "transaction structure and exchange rights," "historical and
projected financial
performance," "investor presentation that would be shared as part of
the PIPE" on page
122; and "a further updated non-binding letter of intent" and
"projected financial
performance" on page 123. Please identify the original terms as well
as how and why any
terms were revised over time. Please also provide a more detailed
description of
any indications of interest or letters of intent and confidentiality
agreements entered into
with the 50 other potential targets and identify the potential target
companies that received
formal indications of interest and/or draft letters of intent.
15. Please also expand your disclosure of the key terms to clarify how
they were negotiated
Mark Farrell
FirstName LastNameMark Farrell
Thayer Ventures Acquisition Corp
Comapany
October 14,NameThayer
2021 Ventures Acquisition Corp
October
Page 4 14, 2021 Page 4
FirstName LastName
and ultimately resulted in the proposed transaction. As non-exclusive
examples, it is
unclear why you do not address the five-person board of managers, the
Class V common
shares or the PIPE investment, and the UP-C structure in more detail,
including which
parties proposed them and the extent to which the terms evolved during
negotiations.
Please also explain how the value resulted in $1.07 billion when the
parties had discussed
$1.25 billion and other values.
Proposals to be Considered by Thayer's Stockholders, page 120
16. We note your disclosure on page 120 concerning your hiring of a
financial advisor,
Evercore, and the lack of a obtaining a fairness opinion from them in
connection with the
business combination on page 126. Please revise your disclosure to
include the level of
diligence performed by your financial advisor, including any material
data or analyses
provided to you by your financial advisor. Additionally, please
disclose the basis for the
board's decision not to seek a fairness opinion from your financial
advisor with regards to
the business combination.
17. We note your disclosure on page 122 discussing the PIPE transaction,
specifically, that
both parties, Inspirato and Thayer, worked on an investor presentation
that would be
shared as part of the PIPE transaction. Please disclose whether
investor presentation
materials provided as part of the PIPE are materially consistent with
the information
contained within this filing.
Certain Inspirato Projected Financial Information, page 127
18. Please revise to expand and further clarify in quantitative and
qualitative terms the
"number of assumptions" beginning at the bottom of page 128. For
example, it is unclear
whether and on what basis the projections assume accelerating
subscription rates or the
addition of new subscribers in excess of existing subscribers net of
cancellations. It is
also unclear what amounts of "investments in sales and marketing" and
other items
underlie the projections. Similarly, it is unclear what amounts of
"further penetrat[ion] of
existing subscriber base" are assumed, and what amounts of cash "made
available from
the Trust Account" are assumed. Please revise accordingly.
19. In this regard, we note your financial projections cover 5 years.
Please explain the basis
for presenting forecasts extending five years.
20. We note the statements on page 127 that readers are "cautioned not to
rely on the
projections" and that the projections "should not be looked upon as
'guidance' of any
sort." Please revise to remove the statement suggesting investors
cannot rely on the
disclosures; and reconcile the characterization of the projections not
being "guidance"
with the disclosures elsewhere that Thayer and the Thayer board of
directors considered
Inspirato's outlook in deciding to recommend the initial business
combination. It is
unclear how the projections, estimates and outlooks were not
understood as guiding the
company's and the board of directors' decision making.
Mark Farrell
FirstName LastNameMark Farrell
Thayer Ventures Acquisition Corp
Comapany
October 14,NameThayer
2021 Ventures Acquisition Corp
October
Page 5 14, 2021 Page 5
FirstName LastName
21. We note from page 123 and elsewhere in the Background of the Business
Combination
that the parties discussed projections at multiple stages of the
negotiations. It is unclear if
Inspirato modified the projections over time. Please clarify the
extent to which multiple
sets of projections exist.
Projections, page 128
22. We note that the Inspirato revenue projections assume revenue growth
that far exceeds
growth for the historical periods presented in the filing. Please
revise your filing to
provide more detailed disclosure of your revenue growth assumptions
and the reasons you
believe these assumptions are reasonable.
Material U.S. Federal Income Tax Considerations of the Redemptions, page 153
23. We note statements on page 155, including treatment of redemptions
under U.S. federal
income tax regulations. We also note that the Business Combination
Agreement seeks
treatment under Section 368(a) for aspects of the transaction. Please
amend the disclosure
here, and where appropriate, to describe the federal income tax
consequences of the entire
transaction, including the merger, and not just the federal income tax
consequences of
redemptions. If the merger will result in tax consequences to U.S.
shareholders that are
material, please file a tax opinion as an exhibit to the registration
statement.
Information about Inspirato, page 188
24. We note the statement on page 187 regarding branded private luxury
"homes available
exclusively" to Inspirato subscribers. Please revise to identify the
exclusive brands.
25. We note the disclosure switches back and forth between TAM and SAM.
Please revise to
clarify when and why you cite these data sets. In this regard, it is
unclear why $230
billion would be the appropriate demand for Inspirato's services when
TAM appears to
assume a significant portion of the market is and will be provided by
the "hospitality
suppliers" separate from Inspirato subscribers or revenue.
26. We note the statement on page 192 that branded private luxury vacation
residences "make
up the heart of the Inspirato portfolio." As the number of residences
and resort partners
reflect a higher number of hotel and resort partners, revise here and
in the MD&A
section to clarify why the branded private luxury vacation residences
make up the heart of
the portfolio.
Certain Inspirato Relationships and Related Party Transactions, page 220
27. Please revise to identify the parties to the transactions. As
non-exclusive examples, you
reference "certain members of Inspirato's board of managers,"
"entities affiliated with
Brad Handler," "an entity affiliated with W Capital Partners III," and
"certain other key
employees." Please also identify the material terms of the several
agreements under the
Series E Preferred Unit Financing and quantify the reserve requirement
of the Guarantee
Mark Farrell
FirstName LastNameMark Farrell
Thayer Ventures Acquisition Corp
Comapany
October 14,NameThayer
2021 Ventures Acquisition Corp
October
Page 6 14, 2021 Page 6
FirstName LastName
of Surety Bonds.
Inspirato Management's Discussion and Analysis, page 224
28. We note the discussion of ARR on page 226 and the comparison against
ARR for Netflix,
Wheels Up and others in Exhibit 99.2. Please clarify the extent to
which your calculation
of ARR differs from those of your competitors and the companies you
cite. We also note
the statement on page 226 that active contracts at the date used in
calculating ARR may or
may not be extended by subscribers. Please clarify the extent to which
you have
experienced periods when your ARR did not capture recurring revenue by
material
amounts.
29. Please revise to identify the parties and circumstances involved in
the $9 million of debt
forgiveness in 2021.
30. We note the statement on page 231 that Inspirato's agreements are
typically monthly or
annual. Please revise to quantify the approximate percentages of
monthly and annual
contracts, and clarify if material the extent to which margins and
retention rates differ.
Please also clarify the extent to which margins are materially
different between travel and
subscription revenues.
31. Please advise us why the revolving line of credit and credit
facilities identified on page
236 are not filed as material agreements under Item 601(b)(10) of
Regulation S-K.
Inspirato Management's Discussion and Analysis
Non-GAAP Financial Metrics, page 227
32. To avoid giving undue prominence to your non-GAAP financial measures,
please move
the discussion of Adjusted EBITDA, Adjusted EBITDA Margin and Free
Cash Flow so
that it follows the discussion of GAAP operating results. Refer to
Item 10(e)(1)(i)(A) of
Regulation S-K and Question 102.10 of the Non-GAAP Compliance and
Disclosure
Interpretations.
Information About Thayer, page 241
33. We note your repeated disclosures throughout the filing that Thayer's
directors and
officers will not be reimbursed for out of pocket expenses incurred in
pursuit of the initial
business combination. Please reconcile such statements with the
statements made on page
245 that provide that the sponsor as well as directors and officers of
Thayer will be
reimbursed for out of pocket expenses in pursuit of an initial
business combination.
Certain Thayer Relationships and Related Party Transactions, page 255
34. We note the statement that no charges were incurred as of December 31,
2020 under the
administrative support agreement. Please revise to provide updated
quantified disclosure
here and elsewhere for amounts paid and reimbursed.
Mark Farrell
Thayer Ventures Acquisition Corp
October 14, 2021
Page 7
35. Please revise to identify the 3 institutional investors referenced on
page 256.
Management After the Business Combination, page 258
36. We note the statement on page 149 that "Inspirato will be managed by a
five-person board
of managers designated by PubCo." Please revise here to identify and
include appropriate
disclosures about the five-person board of managers or reconcile the
statement on page
149 with the disclosure here.
Security Ownership of Certain Beneficial Owners, page 283
37. Please revise to identify the natural persons with voting and
investment power over the
shares held by Polar Asset Management Partners and CVI Investments.
Additionally, we
note you identify "(8 persons)" post-Business Combination; however,
the table identifies
7. Please revise to clarify.
General
38. Please file as exhibits the form of employment agreements identified
on page 212.
Additionally, file as exhibits or advise us why the Cadillac and
Wheels-Up agreements
referenced on page 197 are not material.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Eric McPhee at 202-551-3693 or Kristina Marrone at
202-551-3429 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Austin Wood at 202-551-5586 or James Lopez at 202-551-3536 with any
other
questions.
FirstName LastNameMark Farrell Sincerely,
Comapany NameThayer Ventures Acquisition Corp
Division of
Corporation Finance
October 14, 2021 Page 7 Office of Real
Estate & Construction
FirstName LastName