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SPACs Score Across the Country, But Pittsburgh Holds Back—With a Few Key Exceptions

Pittsburgh Business Times

Praise the eds, meds, robots and self-driving vehicles that fuel Pittsburgh’s innovation economy, but, for the most part, the region’s short on exit strategies so investors can recoup their capital and use the gains to stake something else.


So comparatively, despite the need, locally created SPACs or companies joining an existing one are rare. And there are reasons for the restraint.

“This ties to the discussion about there being an overall lack of capital in our market,” said James Barnes, head of law firm Blank Rome LLP’s Pittsburgh office. “I wouldn’t expect to see a significant amount of SPAC activity here from the standpoint of sponsors. It’s the same dynamics that led to a lower number of private equity and venture capital funds, which also reduces the likelihood that there will be an increase in SPAC sponsors in our market. But there are companies that could ultimately end up being the target of existing SPACs.”


“SPACs give investors the opportunity to buy into things they never had a chance to buy into,” Barnes said. “This is the way the IPO market has become available to smaller investors. If a SPAC is formed to, say, target electrical vehicles, once it’s publicly traded, I can buy shares before it acquires the target. After it finds the target, I can participate as a small investor. And if they don’t find the target, I get my money back. Every time someone announces a SPAC, there’s demand, not from institutions, but smaller investors. But even if I’m a hedge fund, it’s a great play. Putting money in a SPAC and having it sit for a year or so and then having the warrant on top of that is not a bad play.”

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“SPACs Score Across the Country, But Pittsburgh Holds Back—With a Few Key Exceptions,” by Patty Tascarella was published in Pittsburgh Business Times on July 22, 2021.