ANALYSIS: SPACs Fast Becoming Accepted Third Way To Go Public

The traditional IPO is increasingly becoming seen as optional. For years, IPOs were the only real option to grow a company or provide a liquidity event for existing shareholders. But successful direct listings by major startups Spotify and Slack pointed toward another route. Now, many private companies are giving serious consideration to going public via a third option: a reverse merger with a public SPAC.

These private companies are finding themselves increasingly dissuaded from the traditional IPO path for a variety of reasons: high costs, lost upside for early investors, unwelcome scrutiny, and a longer time horizon for completion. Many ...