SPACs, that is, Special Purpose Acquisition Companies, are the new gleam in first-generation entrepreneurs’ eyes. In one shot, SPACs could get them billions of dollars, a clutch of pedigreed investors, and a quick listing on American exchanges, thereby unlocking wealth and rocketing into the next phase of growth. Sounds like a dream come true, right? Unfortunately, as has happened before with India’s first-gen founders, it could spiral into a nightmare. But let’s keep the bad stuff for later and begin with the good news.
SPACs are colourfully called ‘blank check companies’. In fact, it’s literally a pool of cash parked in a listed vehicle, say on Nasdaq or NYSE. SPACs have got no business, no operations or employees, no nothing.