What’s a SPAC? Inside the unstoppable rise of ‘blank-check companies,’ the IPO alternative that startups and VCs are piling into.

What’s a SPAC? Inside the unstoppable rise of ‘blank-check companies,’ the IPO alternative that startups and VCs are piling into.

What is a SPAC? The rise of 'blank-check companies,' explained.



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A SPAC is a type of shell company that raises funds through an IPO that can then be used for acquisitions.Sometimes referred to as a "blank-check company," the SPAC has defied market jitters in a recession. More than half of the IPOs priced between mid-March and May were SPACs.For a company looking to exit, selling to a SPAC takes the hassle out of an IPO. The reverse-merger also gives it access to the blank-check company's seasoned management team.Visit Business Insider's homepage for more stories.

On Monday, electric car maker Fisker announced it was going public in a $2.9 billion deal. But don't expect an IPO. Fisker is joining the ranks of DraftKing, Velodyne and Virgin Galactic, all of which have recently jumped on the SPAC bandwagon.

SPAC “” short for special purpose acquisition company “” is an alternative route to a public stock listing that's enjoying a surge in popularity this year. 

The traditional path to the public markets has been roiled by the ongoing recession, with many