What Are SPAC Sponsor Lockups?

In today’s episode, we break down the role of sponsor lockups in SPAC transactions. Lockups are contractual periods where sponsors are restricted from selling their shares, often ranging from 6 to 24 months post-merger. These agreements are designed to align the sponsor’s interests with the long-term success of the company, providing confidence to PIPE investors and public shareholders alike.

We’ll explore how lockups can include performance-based triggers—such as share price thresholds—and why institutional investors frequently request them as part of their due diligence process. Whether you’re a SPAC sponsor, investor, or simply looking to understand capital markets better, this episode will help you grasp why lockups matter and what they signal about sponsor commitment.