Why Choose SPACs as a Way to Grow?

Growing a company usually means the need to attract fresh capital. A Special Purpose Acquisition Company (SPAC) isn’t a new way to reach public markets, but it is seeing a resurgence in its popularity.

Although interest rates are near all-time lows, most private companies aren’t going to be able to access the debt markets on favorable terms. Even larger debt offerings from the blue chips have hit a wall, and while this may be resolved over the coming months, companies that want to find new sources of investment will need to think creatively.

In addition to a choppy debt market, the outlook for IPOs over the coming year isn’t great. Failed IPOs make everyone in the market nervous about backing a new company, given the amount of work involved in taking a company public via a sale of equity in the traditional sense. Not only is a failed IPO expensive, but it is also a PR nightmare.

Special Purpose Acquisition Companies (SPACs) address the needs of a growing business and have become extremely popular over the last two years. Unlike debt or IPOs, a SPAC can help a business attract badly needed capital, with few risks attached to the company that is on the receiving end of the capital.

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Important note:
Shanda Consult is not offering and/or providing investment advisory services in the sense of regulated investment advisory services as per respective EU Directives and their implementation into national law of EU Member States. Instead, Shanda Consult offers SPAC Project Management services and consults regarding the general principles of US SPACs and their business structuring. Any investment, legal and financial advice that may become necessary for possible sponsors and investors at advanced stages will be provided by the network partners of Shanda Consult.