Issue link: http://endeavor.uberflip.com/i/1381145
5 0 SPOTLIGHT: The Proliferation of SPACs To exit a privately held company as an investor was once a fairly binary proposition: the company would either go public — traditionally on a US stock exchange — or be acquired. While achieving either of these outcomes was (and still is) reserved for the best of the best, there were clearly defined paths to get there. As the capital markets have evolved, so have the options for liquidity. In the past few years, we've seen greater opportunities for liquidity for early stage investors and founders alike including secondary sales, listings on local stock exchanges (e.g. Brazilian Stock Exchange, London Stock Exchange), and going public via Speciality Purpose Acquisition Vehicles (SPACs). SPACs — also known as "blank check companies" — have been around for decades. A once little-known financial maneuver has been revived and thrust into the mainstream. So what is a SPAC? It is effectively a company with no operating history whose purpose is to raise money to acquire another company. The SPAC "sponsor" initially contributes capital to operate the SPAC (typically $6-$12M today), and is tasked to raise additional capital. In exchange for this initial investment and effort, the SPAC sponsor receives a 20% stake in the initial SPAC. Since the SPAC sponsor does not immediately know who their acquisition target is, investors in a SPAC back the sponsors themselves, who typically have a particular interest or expertise in a certain industry or business sector. If the sponsor is unable to complete an acquisition within two years, a SPAC must return their funds to the investors. Just last year, SPACs were buzzy and novel. Today, they seem to be everywhere with nearly 300 SPACs having gone public in the first 100 days of 2021 — a staggering statistic that speaks to both the public demand to invest in earlier- stage growth companies and companies' interest in accessing the public markets. According to SPAC Research, SPACs have raised more than $100 billion since the start of the year, more than last year's record of $83.4 billion, which itself was more than the amount raised in