I was confused by Hedosophia's value proposition after reading that earlier article as well, but NYTimes seems to do a better job of explaining it.

> "For all this, he takes a tidy fee: 20 percent of the $600 million. But if his company acquires a business five to 20 times its size through a reverse merger, he said, the fee is the same as or smaller than a banker’s fee — and it is all in stock, so unlike the banks, Mr. Palihapitiya’s interests are aligned with the company’s."

Ie, the banks charge 7% of the startup's IPO valuation, whereas Hedosophia's sponsors charge a flat 20% of the $600M, regardless of the valuation of the startup it buys. According to the above math, if Hedosophia reverse-merges with a $3B unicorn, the effective fee would only be 4%.