Caught Between a SPAC and a Hardplace

It makes sense that the boom in Specialty Purpose Acquisition Companies—or SPACs—that we saw over the past two years would eventually cool. Financing tools can be like tech markets— reaching the peak of inflated expectations quickly, before hitting a trough of disillusionment (shout out Gartner Hype Cycle). And like any public financing route with less understood regulations, requirements, and risks by investors, SPACs started to attract a lot of interest from regulators in 2021. 

So fair or not, there are going to be some negative connotations with choosing SPACs as a financing mechanism in the short term. The assumption is going to be, thanks to recent media coverage and cooling of SPAC stock prices, that your potential as a public company is light on revenue today and based on more speculative and optimistic growth than the market might give you credit for. 

So what does that mean from a PR and communications standpoint? It means you need to anticipate that objection and over-communicate points of validation. Your company’s financials are its financials, but there is storytelling you can do about the growth of the market, examples of outstanding company execution (customers, partners, key hires), and building up of third-party market data and assets to help bring people with you on your SPAC and public company journey. 

Do it too well and it begs the question, “why not just choose a traditional IPO then?” But if you get to that point where a reporter asks that, you’ve done your job in convincing people that you’re an exception to the SPAC trend and not the rule.