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What Is SPAC?

Investing In Bold Ideas, Creating New Realities

Special Purpose Acquisition Company

SPACs, Special Purpose Acquisition Companies, are publicly-traded investment vehicles that raise funds via an initial public offering (IPO) in order to complete a targeted acquisition. They provide private companies with a unique way to access the public markets, while offering investors a way to co-invest side-by-side with best-in-class sponsors.

How Does It Work?

Responsible Investing, Sustainable Growth


Investing In the Future

1. Formation

A SPAC is formed by a group of sponsors, often well-known investors, private equity firms or venture capitalists. Investors who participate in these investment vehicles not only receive common shares, but also warrants as part of the IPO.


SPACs go through the typical IPO process to avoid a more complicated process with the Securities and Exchange Commission (SEC). The SPAC is assigned a ticker symbol, and most of the money invested by shareholders is held in escrow.


SPACs generally have two years to search for a private company with which to merge or acquire, bringing it public in the process as it becomes part of the publicly traded SPAC. However, if a SPAC hasn’t merged with a company within two years, money is returned to shareholders.


When a SPAC’s sponsors identify a company, they formally announce it and a majority of shareholders must approve the acquisition. The SPAC may need to raise additional money to acquire the company. Once that’s all finalized, the target company is listed on the stock exchange.

Nasdaq IPO

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