STRATEGY

Merlin Labs

There are many reasons for a business to merge with a special purpose acquisition company (SPAC). For Merlin, combining with a SPAC earlier this year gave the aerospace and defense tech startup the legitimacy it needed with customers, CFO Ryan Carrithers told CFO Brew.

Customers of the Boston-based startup, which builds AI-powered autonomous flight software, include the United States Special Operations Command and the United States Air Force, both part of the Department of Defense.

The US government is more likely to hand out long-term contracts to a publicly traded company than a startup that may not raise another round of capital, Carrithers said.

“We’re seeing more government contracts going to companies where the government wants to have transparency around that company, [and] wants to know that that company is going to be around for the foreseeable future, because these are generally pretty longer term contracts,” he said.

The sponsor matters. Why else go through an IPO via a SPAC? Carrithers, who has worked for three SPACs, including Merlin, over the last six years, cited the ability to work with an experienced sponsor as one reason. Inflection Point, the investment firm founded by Michael Blitzer, an entrepreneur and investor, has sponsored several SPACs that have completed mergers with businesses including space infrastructure company Intuitive Machines and USA Rare Earth, a critical minerals mining company.

A PIPE can help cover any shortfalls from potential shareholder redemptions.—LB

      

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TARIFFS

Andriy Onufriyenko/Getty Images

Tariffs and inflation have thrown a wrench in the supply chains and sourcing strategies of multinationals. But small businesses have also felt the effects.

A New York Federal Reserve Bank analysis of last year’s Fed Small Business Credit Survey (SBCS) found that small businesses were “particularly challenged by higher tariffs in 2025,” Liberty Street Economics, a blog by New York Fed economists, reported. The majority (80%) of small businesses in the goods and retail sectors passed on “at least some of the higher costs of imported inputs to customers,” the July 9 report said.

Among small businesses participants, exports may not be as big an issue. “Only about 30% of goods firms and 20% of retail firms reported sales to international customers in 2024,” according to Liberty Street. But “about 70% of goods firms and 80% of retail firms reported using at least some inputs sourced from outside the US.”

“Even though [US small businesses] are far less reliant on selling to foreign customers,” the analysis said, small businesses in the retail and goods sectors are susceptible “to higher costs of imported inputs from higher tariff rates.”

One small biz exec calls it a “tax increase we can’t afford.”—DL

      

FUTURE OF WORK

Getty Images

More than 200 economists, technologists, and AI researchers and wonks are urging businesses, AI developers, and policymakers to move more quickly to prepare for the broader impacts of the AI transformation on the economy.

Signatories to a new statement, “We Must Act Now,” noted that the technology’s potential impact on the labor market could reshape how work gets done and by whom (or what?) on a far shorter timeline than previous industrial shifts (e.g., the Industrial Revolution), leading to more rapid worker displacement and stresses on the health of the overall economy.

“Economists, policymakers and technology leaders must act now to understand the economics of transformative AI and to build the incentives, guardrails, and institutions needed to steer AI in a direction that complements humans and benefits society,” the statement reads.

The statement, published Monday, has been signed by more than 21,000 petitioners including Nobel laureates, and leaders from OpenAI, Anthropic, and other technology organizations. Stanford economist Erik Brynjolfsson, who has been studying the impacts of AI on the workplace and economy for years, organized the project.

The group argues that AI could trigger large-scale job displacement, HR Brew reports.—AD

      

market forces

Francis Scialabba

Today’s top finance reads.

Stat: 13. The number of microcaps that have IPOd on Nasdaq and the NYSE so far this year, compared with 80 by the middle of last year. The debuts of microcap issuers based outside the US have been particularly sparse, as US regulators crack down on “pump-and-dump schemes,” many of which are based overseas. (Bloomberg)

Quote: “Something has gone completely wrong. The basic view among enterprises in this country is ‘I’m going to chillax and waste my time with tokens, I’m going to get no value, and they’re going to get my IP.’”—Palantir CEO Alex Karp (Business Insider)

Read: Inside Uber’s purchase of German delivery service Delivery Hero, and the race to build a global competitor to Dutch delivery service Just Eat and the US’s DoorDash. (Reuters)

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