Research Economic Seminar: Which companies go public via SPACs? The impact of venture capital

Special purpose acquisition companies (SPACs) are blank check companies that are set up to bring private companies public through reverse merger deals. Although SPACs are not a new phenomenon, they have experienced an unprecedented boom in the last two years by representing more than 60 percent of all newly listed companies on US stock exchanges. After being set up, SPACs need to find private target companies to merge with within a period of two years. This study investigates the characteristics of those companies brought public via completed SPAC mergers in 2020 and 2021, and compares them with companies that went public through classic IPOs. In doing so, this study specifically examines the impact of venture capital financing on the likelihood of choosing either way to go public.