The SPAC market encountered two major tests last month – a small market selloff and staying disciplined on the deal front in the face of overheated demand and lofty incentives. SPACs failed big on both counts. The broad market sell-off crushed SPAC returns, driving the 90 Tech SPACs down from a median return of 57% to 7%, including 29 now trading below their deal announcement price. The 38 SPACs of 2020 are up 48%, while the 48 SPACs of 2021 are flat.In February, Tech SPAC sponsors filed 106 S-1s, completed 52 IPOs, and announced 36 acquisitions – all monthly records. The 36 announced deals amounted to $90B in aggregate deal value at a median revenue multiple of 57x. Half of the deals done were for pre-revenue companies, up from 29% in 2020 This is the second major failure, which is too much, too fast, at sky high valuations. As sponsors got over their skis on proposed deals, PIPE investors were supposed to rein them in. Electric cars, trucks, and planes may be coming, but it feels way too much for the public markets to vet an entire early stage industry at this pace. As interest rates continue to climb, volatility will increase, and these highly speculative SPAC acquisitions could suffer a disproportionate amount of pain.