Some have said that SPACs are a bit like venture capital for…
Some have said that SPACs are a bit like venture capital for public investors. While VC funds and SPACs both invest cash in early stage firms there are significant differences a) SPAC promoters get 20% of the stock of the SPAC if they make an acquisition, but VC firms get 20% of the profit (or the profit exceeding some benchmark level) on all investments in their VC fund b) VC firms line up investors to make a commitment to invest up to a certain dollar amount and call for that money as it is needed, whereas SPACs get the money at the time of the SPAC inception, but the money can be withdrawn by nvestors when it comes time to fund a deal if investors don’t like the deal. c) a) and b) d) none of the above