Module III· ECM — IPO ProcessAdvanced
Question

What are SPACs, and how do they differ from traditional IPOs?

Answer

A SPAC is a listed cash shell that raises capital to acquire a private company. The target becomes public through a de-SPAC merger rather than a traditional IPO. SPACs can offer speed and valuation negotiation but involve sponsor promote, redemption risk, PIPE financing, regulatory scrutiny, and different disclosure / investor dynamics than IPOs.