Why Choose a SPAC Over a Traditional IPO?

One of the most common questions we receive from target companies and potential investors—especially in Asia—is: "Why choose a SPAC instead of a traditional IPO?" Many founders have heard of SPACs in the media but are still unfamiliar with how they work in practice. 

It’s important to clarify: not every company is suitable for a de-SPAC, and we do not recommend it by default. The key question is whether a company is ready and willing to become publicly listed soon to seize current market opportunities. 

We focus on companies that fall into one or more of the following categories: 

• High-growth companies with significant potential but not yet profitable 

• Founders who want to be listed sooner rather than later 

• Businesses that face a "now or never" moment due to external pressures 

There are many reasons why companies choose the SPAC route, but based on our experience, here are three core reasons we’ve seen in practice—even when a de-SPAC may be more expensive than a traditional IPO: 

1. Higher Certainty of Listing

A de-SPAC provides greater certainty of successfully going public, particularly in today’s IPO environment. If your company is not yet well-known in the U.S. or doesn’t fit the typical “hot IPO” profile, traditional underwriters may struggle to build demand among public investors.

In many cases, companies end up having to raise most of the IPO funds themselves (especially small to median size companies)—relying on their own network—while still paying up to 8% commission to brokers, even for money they sourced independently. Worse, if you fail to meet the minimum investor threshold for listing, the entire IPO may collapse, delaying your strategic goals.

A SPAC merger avoids this bottleneck. The deal is negotiated directly with a sponsor and PIPE investors, offering a more controlled and predictable path to listing.

2. Time Sensitivity

Traditional IPOs typically take 12–18 months, and are highly dependent on macroeconomic conditions and underwriter confidence. In contrast, a de-SPAC transaction can be completed in as little as 6–8 months, provided the company is audit-ready.

This speed is especially important for companies navigating:

• Regulatory deadlines

• M&A timelines

• Shifting geopolitical or industry windows

It’s also relevant for technology companies that have signed VC/PE earn-out clauses, which require a public listing within a specific time frame.

3. Forward-Looking Valuation for High-Growth Companies

SPACs are particularly attractive to high-growth companies because the valuation process allows for a more forward-looking approach. In a de-SPAC, valuation is supported by an independent fairness opinion, rather than being overly constrained by underwriter preferences or past financials.

Unlike a traditional IPO—which relies heavily on historical earnings—a SPAC allows investors to evaluate the company based on future projections (e.g., DCF modeling, strategic market position). This is ideal for companies investing heavily in R&D or infrastructure today but expecting significant upside in the future—such as those in AI, biotech, deep tech, and other innovation-driven sectors.