By Anirban Sen

(Reuters) – Venture investor Chamath Palihapitiya, whose huge bets on “blank check” acquisition companies earned him the moniker of “SPAC King,” said he remained bullish on the long-term health of such deals despite a recent slowdown.

Palihapitiya, a special-purpose acquisition company (SPAC), has helped raise billions in the stock exchange. These targets are expected to list the “blank-check” firms in order to be made public.

After a boom lasting several quarters, he said that the recent correction was necessary to “the wheat and the chaff” in an interview with CNBC on Wednesday.

Palihapitiya said that the U.S. Securities and Exchange Commission should require SPAC sponsor to put up higher at-risk capital in order for them “to have more skin in their game” and better aligned and work with investors. Palihapitiya has launched 10 SPACs and supported several deals.

From the inception of the SPAC, to its end, the incentives are not aligned so that great outcomes can be achieved. The most important thing that we can do is force sponsors to put more capital at risk.

So if I’m going to fund a multi-billion dollar SPAC, then I will need to have $100 million.

SPAC managers often receive warrants or founder shares, which give them an even greater stake in the company combined than they would have otherwise been able to invest.

Palihapitiya recently commented on the SPAC’s lopsided incentive structures. This comes after Elizabeth Warren and other Senate Democrats wrote letters to Tilmanfertitta, Michael Klein, and Michael Klein asking about incentive arrangements.

Palihapitiya, through his SPACs has made deals with companies ranging anywhere from Virgin Galactic Holdings Inc to Opendoor Technologies Inc.

Investors have become less enthusiastic since March’s peak in the SPAC boom due to poor financial performance, scrutiny by regulators, and lack of transparency from the government.

Clover Investments Corp was one of Palihapitiya’s SPAC transactions. Hindenburg research accused it of hiding an investigation by the U.S. Department of Justice into its business.

He said, “I’m likely to receive a lot more credit for things that go well and a lot less blame for things that go wrong.”

I think everyone needs to stop and look at where we are in terms of a meaningful revolution that is taking place in the capital market. It will be years before it all happens.