With big-name real estate investors racing to found special-purpose acquisition companies, you may find yourself wondering: What exactly is a SPAC?
The Real Deal sat down with venture capitalist Bradley Tusk, founder of the eponymous Tusk Ventures and former strategist for Michael Bloomberg, to find out what, exactly, a SPAC is, and when — and how — investors should get involved.
Often intended as a fast-track to funding, SPACs enable startups to generate interest and investments from the public market. New, high-valuation SPACs are popping up every day, with everyone from athletes to VC veterans to real estate firms — including CBRE, Tishman Speyer and Cushman & Wakefield — getting involved.
But according toTusk, “it’s not a magic bullet” for investors.
“You’ve gotta have something to really bring to the table,” he said of the firms launching SPACs. “Those who don’t, who are only doing it out of FOMO, and only doing it because they think it’s the cool thing to do, they’re going to be the ones with trouble.”
Get Tusk’s take on SPACs in the episode of TRD Tips above.