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SPECIAL PURPOSE ACQUISITION COMPANIES
What is a Special Purpose Acquisition Company (SPAC)?
A SPAC is a shell company formed solely to raise capital through an IPO with the intent of acquiring or merging with an existing private company, thereby taking it public without a traditional IPO process.
What percentage of SPAC IPO proceeds do sponsors typically retain as founder shares?
Sponsors typically retain 20% as founder shares.
What is another common name for a SPAC?
SPACs are commonly referred to as 'blank check companies' because investors commit capital without knowing the specific acquisition target at the time of the IPO.
What type of trust account is used to safeguard SPAC IPO proceeds?
An interest-bearing trust account holds the proceeds.
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