Undergoing Diligence: What Private Companies Must Prepare for in a DESPAC Transaction
In this episode of The DESPAC Podcast Go Public Series, host Chaz Churchwell and SPAC attorney Michael Blankenship of Winston & Strawn break down the fourth step of the Go Public Framework: U – Undergoing Diligence.
Diligence is the phase where every detail of your business is examined. This review includes legal compliance, financial accuracy, internal controls, risk disclosures, governance readiness, operational viability, and insurance structure. Your company must demonstrate clarity, accuracy, and transparency to satisfy SPAC partners, PIPE investors, auditors, and the SEC.
Listeners will learn:
• How diligence tests the entire foundation of the DESPAC
• What auditors, investors, and regulators focus on
• Why transparent disclosures and accurate projections determine trust
• How the S-4 filing becomes the public-facing roadmap of your business
• Why D&O insurance, tail coverage, and risk frameworks must be finalized pre-close
• What crypto-related companies must document to satisfy regulators
• How proactive preparation speeds up the SEC review process
• Why diligence is essential for a smooth transition toward going public
This episode gives leaders a clear understanding of what to expect and how to prepare for one of the most demanding parts of the DESPAC journey.
Connect With the Guest:
Michael Blankenship, Winston & Strawn LLP
LinkedIn: https://www.linkedin.com/in/mikeblankenship
Connect With the Host & The DESPAC Podcast:
Chaz Churchwell LinkedIn: https://www.linkedin.com/in/chazchurchwell/
YouTube Channel: www.youtube.com/@thedespacpodcast
THE DESPAC PODCAST STANDARD LEGAL DISCLAIMER
The DESPAC Podcast is for informational purposes only. The views and opinions expressed by the host and guests are their own and do not represent the views of Smooth Stone Capital, its affiliates, or any sponsoring organization.
Nothing in this podcast should be interpreted as legal advice, investment advice, tax advice, or a recommendation to pursue or avoid any transaction. Discussions may reference SPACs, DESPAC transactions, securities regulations, or public-company readiness frameworks. These conversations are educational in nature and should not be relied upon when making financial or strategic decisions.
Listeners should consult qualified legal, financial, and tax professionals before acting on any information discussed in this podcast. Any examples or scenarios mentioned are illustrative and may not reflect current market conditions or regulatory requirements.
Participation by a guest does not constitute an endorsement of any company, strategy, product, or service. References to specific firms or individuals are for context only.
Smooth Stone Capital and the DESPAC Podcast disclaim all liability arising from the use of or reliance on the information presented.
Chaz Churchwell: Welcome back to the D spac podcast. We're in our Go public series and we've already covered G Get Ready, O Organize Advisors and P Position the Deal. You have myself, Chaz Churchwell, and Michael Blankenship, your host for today and your guest. So today we're gonna tackle you undergoing diligence. So Michael, talk to me.
You're one of the top SPAC attorneys in the country. What does this phase feel like for a private company?
Mike Blankenship: Well, it's certainly intense, Chaz. It's where all the preparation pays off. You'll be asked to support legal, uh, financial and operational due diligence from the spac, the pipe investors, as well as the auditors.
It's a full audit of your business and requires complete and total transparency
Chaz Churchwell: and audits. Let's be honest, they're never fun. There's, they're difficult, but here's the reality. This is when you finalize the S four, right, and you start to really dig in and go public in front of the investors for that target.
Mike Blankenship: That's right. All that diligence goes into the S four filings. These documents are your official blueprint for the SEC and the investors. They must contain a clear, accurate projection and transparent disclosures.
Chaz Churchwell: Like I'll tell you, this is where church will, insurance obviously gets to come into play. Um, this is where we work for you behind and, uh, like we'll put in.
Binding the tail policy for the SPAC company and the go forward d and o coverage for the target company. And uh, and we do all of that kind of pre-close, but then obviously funds aren't due until the business combination actually happens, but. It's a critical step in that process, both for SPACs, their directors and for the new company leadership that's getting dialed in, um, helping to mitigate any of that litigation risk that can and be heightened as you go public.
So, um, obviously you don't want to get to the finish line without having DNO in place.
Mike Blankenship: Absolutely. And for our crypto involved companies, uh, this part of diligence gets even more complex. You have to include details on custody arrangements, counterparties, and treasury controls. It's about showing that you've fought through every aspect of security volatility within the SEC review process.
Chaz Churchwell: If I could add one thing, it's about also being proactive and thorough. So next up, we're gonna move into B Building Market Trust as we continue through our Go Public series with the D SPAC podcast.