Does a minimal investment in a Special Purpose Acquisition Company (SPAC) entitle a sponsor to a tremendous amount of equity after a successful IPO? Hypothetically speaking, will an investment of $25,000 for founder shares result in approximately $40 million of equity value upon completion of a $200 million SPAC IPO? What is at risk for SPAC sponsors and what are the controversies surrounding sponsor equity?

Join Mintz's Thomas Burton, Sahir Surmeli, and Jeffrey Schultz for the second episode of SPAC Chat as they dive into the risks and high rewards affiliated with being a SPAC sponsor. Topics covered will include:

  • What is sponsor equity?
  • How much do sponsors typically get?
  • What is at risk with investing?

Mintz has handled some of the hottest multibillion-dollar SPACs this season, including XL Fleet, Butterfly Network, and Canaccord Genuity's Environmental Impact Acquisition Corp., and draws from decades of experience guiding clients through the intricacies of SPAC financings. Mintz handled the first New York Stock Exchange SPAC transaction and has completed over 35 SPAC transactions, including SPAC IPOs and de-SPAC mergers.

Originally Published by Mintz, March 2021

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.