# Truth Social SPAC Financial Model

DWAC acquires TMTG (operator of Truth Social social network and TMTG+ planned streaming service) in a SPAC business combination at an initial equity value of ~$2.2B, with a PIPE of ~$1B.

- Canonical: https://finamodel.com/startups/truth-social-spac
- Excel download: https://finamodel.com/startup-models/truth-social-spac.xlsx
- Category: Media/Gaming
- Model type: SPAC / De-SPAC
- Funding round: SPAC
- Funding: $6B
- Founded: 2021
- Geography: United States (primary); global aspirations stated.
- Customer: B2C

## About the company

Truth Social was presented as a planned ad-supported social platform built on Mastodon, with TMTG+ proposed as a subscription streaming product for news and entertainment. The iOS app was only available for pre-order and neither product had operating users, revenue, or a demonstrated content library.

Forecast is driven by monetisable daily active users and annual ARPU, while TMTG+ is modelled as subscribers times an average monthly fee. A podcast network is referenced but has no commercial forecast. The deck used Donald Trump’s prior 146 million cross-platform followers as the seed-audience rationale, not as product traction.

Management projected total revenue from $1 million in 2022 to $3.665 billion in 2026, based on 81 million Truth Social users and 40 million TMTG+ subscribers. A de-SPAC model should stress-test adoption, advertising yield, content cost, subscription retention, redemptions, financing, dilution, ownership, and valuation.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

Two planned products:

**TRUTH Social**
- Ad-supported social media platform positioned as a "Big Tent" free-speech alternative to Twitter/Facebook.
- Built on Mastodon open-source backend.
- Mobile app available on iOS (pre-order stage at time of deck).
- Catalytic user base: Trump's existing 146M cross-platform followers (89M Twitter, 33M Facebook, 24M Instagram as of Jan 2021).

**TMTG+**
- Planned on-demand streaming service: news, documentaries, sports, unscripted entertainment.
- Positioned vs. Netflix, Disney+, Hulu.
- Content lead: Scott St. John (Executive Producer, "Deal or No Deal", "America's Got Talent").
- No content library or live service shown in deck; entirely aspirational at presentation date.

## Market

No formal TAM/SAM/SOM funnel presented. Deck uses competitor revenue/user benchmarks as a proxy:

- Combined Twitter + Netflix + iHeartMedia: $35.5B revenue, 457M users.
- Twitter: $4.8B LTM revenue, 211M monetizable DAU (Q3 2021).
- Netflix: $27.5B LTM revenue, 214M paid subscribers (Q3 2021).
- iHeartMedia: $3.2B LTM revenue, 32M US monthly listeners (Q2 2021).
- US podcast audience: 155M listeners, 55% of population 12+ in 2020.

No independent market-size or CAGR figure cited for TMTG's addressable market. Deck implies the market is sized by the conservative/non-woke segment of the above platforms.

## Revenue model

**TRUTH Social - advertising**
- Revenue driver: monetizable daily active users × ARPU.
- ARPU modeled as annual revenue per monetizable user (consistent with Twitter's metric).
- Monetizable user defined as accounts that log in on any given day to whom ads can be shown.

**TMTG+ - subscription**
- Revenue driver: total subscribers × average monthly fee.
- Monthly fee range benchmarked against Netflix ($11.73/mo) and Disney+ ($4.16/mo).

**Podcast network** referenced in slides 18 and 31 but no revenue model, launch timeline, or projections provided. Not modeled in deck financials.

## Traction & metrics

**Operating traction: none at presentation date.** Company is pre-launch.

- Truth Social app: iOS pre-order only; "TRUTH is coming" message shown.
- No users, no revenue, no historical financials shown.
- Trump's prior social media following cited as seed audience: 146M total followers across Twitter (89M), Facebook (33M), Instagram (24M) as of January 2021.

**Management projections (not audited actuals):**

| Year | Total Users (Truth Social) | % Monetizable | Monetizable Users | ARPU | TMTG+ Subscribers | Avg Monthly Fee | Total Revenue ($M) |
| ----- | -------------------------- | -------------- | ------------------ | ----- | ------------------ | ---------------- | ------------------ |
| 2022E | 16M | 5% | 0.8M | $5.90 | 0M | $0.00 | $1.0 |
| 2023E | 41M | 25% | 10.3M | $8.90 | 4M | $5.56 | $114.1 |
| 2024E | 56M | 26% | 14.6M | $12.90 | 11M | $7.50 | $835.0 |
| 2025E | 69M | 26% | 17.9M | $13.00 | 23M | $8.00 | $1,843.3 |
| 2026E | 81M | 26% | 21.1M | $13.50 | 40M | $9.00 | $3,665.3 |

Revenue split by segment not explicitly broken out in table; total implied. Bar chart shows TMTG+ (light blue) becomes dominant from 2024E onward.

## Competition / moat

Competitors cited as benchmarks:
- Social: Twitter, Facebook (Meta), Parler (banned from app stores Jan 2021).
- Streaming: Netflix, Disney+, Hulu.
- Podcast/Audio: iHeartMedia.

Stated moat:
- Trump's personal brand and 146M follower base as catalytic user acquisition.
- "Non-cancellable" / free-speech positioning for conservatives.
- "Big Tent" inclusive framing intended to expand beyond initial conservative base.
- Redundant CDN/infrastructure across multiple independent (non-Big-Tech) cloud providers (Rumble Cloud, Rightforge, NS1, Cloudflare, Akamai, Al.net) to resist deplatforming.

Comps used for valuation benchmarking: Facebook (6.1x EV/Rev 2022E), Snap (14.6x), Twitter (6.6x), Netflix (9.3x), Spotify (4.7x), Roku (10.1x), Peloton (5.2x). Mean 8.1x, Median 6.6x. Twitter at 6.6x EV/2022E revenue = $41B EV cited as reference point.

## Team & funding ask / use of funds

**SPAC sponsor:** Patrick Orlando, Chairman & CEO of DWAC; prior: Deutsche Bank, JPMorgan, MIT degrees in Mechanical Engineering and Management Science.

**TMTG technology team:** ~30+ engineers across backend, frontend, mobile, product. CTO, CPO, CIO, CSO, VP Engineering named by first name/last initial only.

**TMTG+ production:** Scott St. John (EP, "Deal or No Deal", "America's Got Talent").

**Transaction structure:**
- DWAC acquires TMTG at initial purchase price of $875M in DWAC shares.
- Earnout: up to 40M additional shares (15M @ $15, 15M @ $20, 10M @ $30).
- PIPE: ~$1.0B at close.
- DWAC cash in trust: $293.3M (assumes no redemptions).
- Cash to balance sheet post-close: $1,254.4M.
- Pro forma EV (base, $10/share): $992.7M; total equity value $2,247.1M.
- Pro forma EV (full earnout at 10/28/21 market prices): $12,283.6M; total equity value $13,538.1M.
- TMTG stockholders: 87.5M shares (38.9%) base; 127.5M shares (65.9%) full earnout.
- PIPE investors: 100M shares (44.5%) base.
- Expected close: Q1 2022.

**Advisors:** EF Hutton (placement agent/banker), Nelson Mullins, Loeb & Loeb (legal), Ellenoff Grossman & Schole (SPAC counsel), Marcum (accountants), Withum (audit/tax).

**Use of funds:** $1,254.4M to balance sheet; stated use is building out TMTG and TMTG+. No detailed use-of-funds breakdown by category (product, content, marketing, G&A).

## Recommended financial model

- **Archetype + why:** SPAC/de-SPAC deal model combined with a dual-segment operating forecast (social media ad + streaming subscription). This is not an operating startup raise - it is a reverse merger. The primary deal model should capture SPAC mechanics (trust, PIPE, redemptions, dilution, earnout), then flow into a 5-year operating revenue build that mirrors the management projections and allows sensitivity testing of their key assumptions.

- **Forecast horizon & granularity:** Deal close mechanics: transaction-date (2022). Operating model: annual 2022E–2026E (matches deck horizon). No quarterly data provided; annual is appropriate given early stage.

- **Key drivers & assumptions:**

  *SPAC deal mechanics:*
  - DWAC trust cash: $293.3M
  - PIPE proceeds: $1,000.0M
  - DWAC sponsor equity: $83.2M
  - TMTG fixed equity: $875.0M
  - Earnout tranches: 15M @ $15 / 15M @ $20 / 10M @ $30
  - Redemption rate: 0% (base case in deck); sensitivity from 0% to 80% redemption is a key risk lever
  - Fees & expenses: $38.8M
  - Cash to balance sheet: $1,254.4M

  *TRUTH Social - ad revenue drivers:*
  - Total users 2026E: 81M - based on 2021 Politico poll of registered voters; ramp: 16M→41M→56M→69M→81M from deck table
  - Monetizable % 2022E: 5%; stabilizing at 26% from 2023E onward
  - ARPU 2022E: $5.90, growing to $13.50 in 2026E; linear interpolation between years
  - Monetizable user → revenue: monetizable users × ARPU = Truth Social revenue (implied by table)
  - Twitter ARPU benchmark: $23.76 (2021 LTM); 2026E ARPU represents 43% discount

  *TMTG+ - subscription revenue drivers:*
  - Subscribers 2026E: 40M; ramp: 0M→4M→11M→23M→40M
  - Avg monthly fee 2026E: $9.00; ramp: $0→$5.56→$7.50→$8.00→$9.00
  - Annualized TMTG+ revenue = subscribers × monthly fee × 12
  - Netflix benchmark: $11.73/mo; Disney+: $4.16/mo; $9.00 = 23% discount to Netflix

  *Cost structure (all assumed - nothing in deck):*
  - Content/programming costs (TMTG+): ~40–60% of streaming revenue, benchmarked to Netflix content margin; this is the single biggest unknown
  - Infrastructure / hosting: ~10–15% of revenue at scale; elevated in early years given redundant architecture
  - S&M / user acquisition: heavy in 2022–2023 (launch phase), declining as % of revenue
  - G&A: ~5–10% of revenue at scale
  - EBITDA margin: negative through 2023E; positive from ~2024–2025E if projections achieved

  *Valuation / comps:*
  - Peer EV/Revenue 2022E: mean 8.1x, median 6.6x
  - Twitter at 6.6x used as primary reference for Truth Social
  - Apply range of 4x–10x to 2026E revenue for terminal value sensitivity

- **Scenarios (Base / Bull / Bear - which variables flex):**
  - **Base:** Management projections as stated (81M users, 26% monetizable, $13.50 ARPU, 40M TMTG+ subs at $9/mo by 2026E).
  - **Bull:** Faster monetizable % ramp (e.g., 35% by 2026E), higher ARPU ($16–18, closing gap to Twitter), TMTG+ at 55M subs.
  - **Bear:** Low user acquisition (deck projections miss materially - e.g., 20M total users by 2026E), monetizable % stays at 5–10%, TMTG+ delayed or not launched; heavy redemptions at SPAC close reduce cash to balance sheet.
  - Key flex variables: total user growth, monetizable %, ARPU, streaming subscriber ramp, monthly fee, redemption rate, content cost ratio.

- **Required sheets / outputs:**
  1. **Deal Summary** - SPAC sources & uses, pro forma cap table (base and full earnout), EV bridge, redemption sensitivity table.
  2. **Assumptions** - all drivers with Base/Bull/Bear toggles.
  3. **Truth Social Revenue Build** - users → monetizable users → ARPU → revenue, 2022E–2026E.
  4. **TMTG+ Revenue Build** - subscribers × monthly fee × 12, 2022E–2026E.
  5. **Consolidated P&L** - combined revenue, assumed cost structure, EBITDA (largely inputs flagged clearly).
  6. **Comps / Valuation** - EV/Revenue multiple applied to 2026E revenue; sensitivity table (revenue × multiple).
  7. **Earnout Waterfall** - share issuance at each price threshold ($15/$20/$30) and dilution impact.
  8. **Dashboard** - total revenue, users, subscribers, EV, equity value summary.

## Frequently asked questions

### Is the Truth Social SPAC financial model free?

Yes. The Truth Social SPAC model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.