One of the most exciting times when running a startup is the moment when you’re finally ready to go and get some seed funding. Raising funds isn’t just about the growth of your startup — once you start to get seed money, it’s a real validation of your startup. People are interested in you! However, you can’t just rush into looking for seed capital.

When it comes to SPAC vs. IPO, the fact of the matter is that the shell company SPACs are a lot faster and more nimble than traditional IPOs. The SPAC model is alluringly simple — unlike with a traditional IPO, you can start seeking investment capital right away, and decide where it’s going to go later.

SPAC investors are willing to hop aboard this wild ride because they’re assuming they’ll get something out of it — even if what they do get ends up being a surprise! Worse comes to worst, they can simply redeem their shares.

Getting acquired is a best-case scenario where both you and your investors can make a lucrative payday. Your company’s valuation will be based on several key factors:

  • If your company’s products or services and geography can help fill in a market or product gap for the acquiring business
  • If the acquirer wants to outbid a competitor for your business
  • If your company’s talent meets the needs of the acquirer
  • If there are theoretical synergies between your businesses
  • If you’re doing better than the acquiring business in the same marketplace

Frank Mastronuzzi

Frank Mastronuzzi

Founding Partner @punchfinancial, VP Business Development @GreenoughGroup, CFO, MBA, SF-Based, consummate optimist, proud zio, proud daddy of Luca, the Wheaten