Abstract
The introductory part of the article is devoted to a brief overview of the typical methods of raising funds for a company’s capital. Then, I compared The pros and cons of each approach. Further, the author introduces the company’s new fundraising – through the merger with a SPAC (from now on referred to as the merger with SPAC). The article discusses the advantages and disadvantages of this option for a company to enter public capital markets or raise capital in a company compared to the already traditional methods – raising private capital and entering public capital markets through an IPO. As a result of this comparison, the author concludes that the merger with SPAC has the advantages of both classical options for raising capital, without their disadvantages, which makes this option a unique offer on the market. Statistical data confirmed this conclusion. The separate section in the article is devoted to the peculiarities and complexities of the merge with SPAC. The advantages of the merger with SPAC for the leading Russian companies compared with other types of capital raising are separately highlighted, and the contrast between the placement on the MICEX and the merger with SPAC. The article also presents statistics on the public capital market and the impact on the public market of the new opportunity for companies to go public. In the final section of the article, the author discloses the chain of events that brought the merger with a SPAC such a fame and popularity at the current moment in time. The article resulted in an explanation of the attractiveness of institutional investors’ investment of funds in companies that have chosen the merger with a SPAC as a potentiality for entering public capital markets.
Highlights
D o you know all the options available for raising funds for a company? In this article, I will outline one you may not have heard of that may be a better option for your company than the traditional methods
When trying to understand the main idea of SPAC and the main differences from a classic Initial Public Offering (IPO), it helps to think of SPAC as a structured IPO
In a merger with SPAC, the company can choose its investors with the sponsor and shareholders attracted through the PIPE mechanism
Summary
When trying to understand the main idea of SPAC and the main differences from a classic IPO, it helps to think of SPAC as a structured IPO. In a merger with SPAC, the company can choose its investors with the sponsor and shareholders attracted through the PIPE mechanism. Comparing the pros and cons, we can conclude that the SPAC deal is a preferable option for a company wishing to raise funds in the public capital market. A merger with SPAC is not so simple, and it is necessary to approach the choice of partners carefully They should be able to organize cooperation with international institutional investors at the appropriate level, which achieves the goal of entering the public capital market through the shortest possible route. For companies from emerging markets, the option to enter public markets through SPAC merger provides several advantages over IPOs on local exchanges:.
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