SPACs are an Attractive Vehicle to Raise Capital
Douglas Ellenoff, Partner of Ellenoff Grossman & Schole (EGS), explains what SPACs are
“SPACs are an Attractive Vehicle to Raise Capital”
… says Douglas Ellenoff, Partner of Ellenoff Grossman & Schole (EGS), and explains SPACs in a nutshell:
”A SPAC is a registered IPO, that raises money that sits in a trust account, that is created and formed by private equity sponsors and well-known business people.
And that money that sits in the trust account … is used to buy a private company, thereby taking a private company public through a reverse merger of sorts. It’s either a financing technique, an M&A transaction to get a private company public. It enables retail investors and public investors to participate in private equity transactions, single purpose private equity transactions, sponsored by some of the best-known private equity professionals in the country, and that’s what a SPAC is in essence”, says Douglas Ellenoff, Partner, Ellenoff Grossman & Schole (EGS).
Ellenoff Grossman & Schole (EGS) is one of if not the heavy weight in the SPAC space, having been appointed as legal counsel to more SPACs than any other law office.
Important note:
SPAC Consultants 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, SPAC Consultants 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 SPAC Consultants.
SPACS are indeed an attractive way to rise capital – if you work with an interprofessional team of experts
Setting up a SPAC, arranging for its IPO and achieving a great acquisition requires interprofessional skills and expertise. Although they are proven experts in their own area, legal counsels will not advise and guide a client in relation to all aspects of a SPAC, and the same goes for investment banks and auditors.
They will not advise their SPAC clients on the perfect SPAC board, they will only partly advise on structuring a SPAC in the right way, or how to make a SPAC attractive for the IPO.
Setting up a SPAC is an interprofessional project, including designing and correctly structuring a SPAC, refining the SPAC acquisition strategy, finding the right institutional IPO investors, indeed considering market momentums and psychologic dynamics.
Forming an excellent SPAC board is crucial for both a successful IPO as a successful acquisition. For the success of the IPO and a good acquisition, a SPAC board needs to meet specific criteria. Important to remember is also that SPAC board members are not allowed to receive any salary or similar remuneration until after a successful acquisition. Instead, SPAC board members get compensated with pre-IPO SPAC founder shares, that will become common shares on the day of IPO.
Please refer to our specific page about SPAC boards.
A very important aspect of SPACs is the dynamics of financials and value upside, for SPAC sponsors and founders, institutional IPO investors and shareholders of acquisition target companies.
Those dynamics are very flexible and may be structured and shaped based on various concerns, which will affect all stakeholders, but which may also determine the attractiveness of a SPAC for all stakeholders involved, and thus the general success of a SPAC.
As far as financial dynamics for SPAC sponsors are concerned, you will find more information in our section Gains and Returns for Sponsors.
With SPAC Consultants at your side, you will benefit from individual and unbiased advice and consulting, as well as competent and all-encompassing guidance and services from A to Z, from the evaluation of the SPAC idea to a successful IPO and beyond.
SPACs Insider Knowledge:
- SPACs – A way for companies to grow
- SPACs – Acquisition Strategies Offering Flexibility
- SPACs – Forming the right Board of Directors
- SPACs – Potentially high gains and returns for sponsors
- SPACs – Step-by-Step – from the Sponsor to IPO to Acquisitions
Further reading:
- SPACs Appear COVID-19 Resistant
- Why SPACs hit record in 2019 with 59 IPOs
- The HEIDI SPAC: Smart Energy with Blockchain Technology and Artificial Intelligence
- HAIMA BIOTECH Shttps://spacconsultants.com/haima-biotech-spac/PAC
What we can do for you
Your SPAC idea and concept
SPAC Consultants and its partner network can advise you on the business structuring of a SPAC and introduce you and your SPAC idea and concept to the right parties, all of them the heavy weights in the SPAC space who were involved in most SPACs until today.
Interested to setup up a SPAC or to invest as a sponsor?
If you are interest to set up a SPAC to raise capital for your acquisition project(s), please contact us now. You will benefit not only from our expertise but also from our unbiased evaluation of your SPAC project, our independent advice and professional services setting up your SPAC and and successfully floating its IPO.
Should you be interested in getting involved as a sponsor of a SPAC, we will be happy to present you “ready-made” SPAC concepts from various industries, which top-class management teams ready and post-IPO investment strategy and specific goals defined.
Simply approach us through our contact page, or call us on +357 222 72 300.
Important note:
SPAC Consultants 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, SPAC Consultants 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 SPAC Consultants.