Repeat SPAC Sponsors

Abstract

Sponsors are the key value-generating resource for special purpose acquisition companies (SPACs). We identify a subgroup of sponsors—repeat sponsors—who have formed and managed multiple SPACs. Repeat sponsors identify target companies faster, and their SPACs merge with private companies of higher quality. However, these benefits are attenuated when sponsors manage multiple SPACs simultaneously, suggesting that overlapping commitments create conflicts of interest and dilute sponsor attention. Overall, our findings highlight a tradeoff between the benefits of sponsor expertise and experience, and the costs associated with concurrent sponsorship.