Sponsor Compensation Explained
While the promote is often the most discussed form of compensation for SPAC sponsors, it’s not the only one. In this episode of The SPAC Podcast, we take a closer look at additional forms of sponsor compensation that may exist around a transaction.
Private placement warrants, expense reimbursements, success fees, or even advisory roles post-close are all possible components. These forms of compensation are not uncommon, but transparency around them is critical. The SEC has emphasized the importance of clear and complete disclosure so that investors can fully understand how sponsor incentives are structured.
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