For most of the last decade, the SPAC debate has been framed as SPACs versus IPOs, as if a company picks between two comparable routes to the public markets. The market is no longer organized that way: traditional equity capital markets have concentrated in larger, cleaner issuers, and for smaller companies the practical path to a listing has moved.
The IPO Market Has Moved Away from Small Issuers
Through the first half of 2025, two-thirds of the 100 traditional IPOs priced raised less than $50 million, according to Bloomberg data. The economics of those smaller deals keep getting harder. Research coverage has thinned, underwriting costs do not scale down with the size of the raise, and institutional investors are harder to attract when the deal itself is small.
The listing bar has moved higher as well. Since January 2026, companies seeking a new Nasdaq Capital Market listing under the net income standard have needed at least $15 million in unrestricted public float, up from $5 million. For an emerging company trying to access the public markets, that is a meaningful change. Microcap IPOs still happen, but the traditional route has become narrower and more expensive.
$26.9 Billion in Trust Looking for a Business
SPACs have moved into that gap. In 2025, 144 SPAC IPOs raised $26.9 billion, a pool of capital that exists to find companies and take them public. That capital increasingly serves the part of the market the traditional IPO process has left behind.
Raising the capital has proven easier than putting it to work. Through early March 2026, SPACs raised $11.7 billion, the busiest start to a year since 2021, but announced only 13 mergers over the same stretch, and the market valued just five of those above the cash in trust.
SPACs have become the new microcap IPO, which makes their legitimacy the wrong question. The better one is whether the people running these deals bring the discipline that taking a small company public demands.
In 2021, the market showed what happens without that discipline. According to SPAC Research, 613 SPACs went public that year and raised $162.5 billion. Sponsors were racing deadlines, targets wanted capital, and bankers had deals to close. Diligence and public-company readiness fell behind.
The aftermarket wrote the rest of the story. Redemptions climbed, companies stumbled after closing, some lost their listings, and the structure took most of the blame. Nearly two-thirds of the more than 400 former SPACs that listed over the past six years and still trade have fallen more than 80%, according to SPAC Research data Bloomberg analyzed. Some of the blame was earned, but the criticism buried a better question: was the problem the vehicle, or how too many people were driving it?
Every Seat at the Table Sees a Different Deal
The need behind the SPAC market never went away, and the IPO window has not meaningfully reopened for smaller issuers. What deserves more attention is how SPAC incentives shape the quality of the company that comes out the other side.
For the sponsor, founder shares and warrants reward a completed deal, and the deadline puts a clock on it. Neither is a problem on its own, but together they create real pressure to close.
The banker’s view has changed since 2021, as regulators have looked harder and the market has become far less forgiving. A serious underwriter now has every reason to dig deeper, because taking an unready company public has consequences that last well past the closing dinner.
A target company that chooses a SPAC is still described as taking a shortcut, even though the traditional window has moved up-market. For a company with a credible growth plan but not yet the revenue or margins a traditional book requires, a SPAC is often the most viable route available. The real test is whether the company can operate as a public company the day after it closes.
I have spent much of my career working with emerging companies, and I have seen businesses with real technology, strong management teams, and legitimate growth opportunities struggle to access capital simply because they are too small for the economics of today’s IPO market. Not every emerging company belongs in the public markets, but more good companies should have a viable path to get there. A well-run SPAC can be part of that path.
PIPE investors, shareholders, counsel, and exchanges all bring legitimate interests to the table, and those interests rarely line up neatly. How they diverge can tell you a great deal about whether a deal was built to last.
Closing Is Where the Scrutiny Starts
Redemptions have become the market’s real underwriting. A SPAC that closes after most of its trust has been redeemed has completed the transaction, but economically it is a much smaller financing than the one the deal was built around.
The stretch that gets the least attention runs from signing to becoming a functioning public company. A microcap that comes public through a SPAC takes on the same disclosure obligations as any other issuer, often in front of a shareholder base that is skeptical and quick to redeem. Yet communications around the announcement, the proxy, the closing, and the first few quarters are still treated as a support function rather than part of the deal.
A few years ago, I watched a medical device company work through its first quarter after a de-SPAC. The deal was well structured, the technology was real, and the sponsor had done its homework, but nobody had planned for the first earnings call. The investor presentation from the roadshow still sat on the website, projecting revenue from a product launch that had since slipped two quarters. The company also had no social media presence. When retail shareholders spotted the discrepancy, the discussion played out on X and investor message boards, and management had no channel of its own to respond. By the time management addressed the delay, shareholders were debating management’s credibility rather than the technology. The business had not changed at all. The narrative had simply been left unattended at the moment it mattered most.
The market punishes that mistake quickly, because closing is where the company starts proving that the valuation, the plan, and the story told during the transaction can survive public-market scrutiny.
Over the coming articles, I will take each seat at the table in turn: sponsor, banker, target, investor, counsel, exchange and communications advisor. Each sees a different transaction, because each has different economics, obligations and definitions of success. Where those interests align, and where they break apart, says a lot about how to build better deals.
If SPACs are going to function as the microcap IPO market, they should be judged less by how efficiently they get a company public and more by whether that company was ready to be there.
Jeff Ramson is the founder and CEO of PCG Advisory, a New York-based investor relations and public relations firm serving growth companies. Since founding the firm in 2008, he has advised public companies on capital markets communications, investor engagement, and corporate positioning. Jeff also founded ProActive Capital Group, a private investment firm focused on asymmetric opportunities in high-growth sectors, which has participated in SPAC transactions.