If you're a company owner: If you take your company public in an IPO, you have no idea what people will pay. With a SPAC you can discuss and negotiate and fix a price. That might be 100% shares or 100% cash. But you know you will end up with X percent of the shares and Y dollars once the deal is done so you can manage your risk.
If you're the SPAC, you are taking more risk. But you think you're getting the company cheaper than the market will value it. So you'll profit from the first day of trading.
Public companies (in theory) are better run and have easier access to capital. So the act of going public should increase company value and that adds motivation to both sides.
Using a sponsorship deal and charging investors for it is just advertising really. If the SPAC wastes money on it, that's the investors problem.
If you're a company owner: If you take your company public in an IPO, you have no idea what people will pay. With a SPAC you can discuss and negotiate and fix a price. That might be 100% shares or 100% cash. But you know you will end up with X percent of the shares and Y dollars once the deal is done so you can manage your risk.
If you're the SPAC, you are taking more risk. But you think you're getting the company cheaper than the market will value it. So you'll profit from the first day of trading.
Public companies (in theory) are better run and have easier access to capital. So the act of going public should increase company value and that adds motivation to both sides.
Using a sponsorship deal and charging investors for it is just advertising really. If the SPAC wastes money on it, that's the investors problem.