On June 17 and 18, DealFlow Events held its annual SPAC conference, a long-standing gathering of key players in the SPAC ecosystem. I was once again invited to speak at the event, which provided an opportunity to explore current challenges in the SPAC market and to gain insight into where the market is headed. I must say, I did not anticipate the level of enthusiasm and excitement at this year’s event; it was phenomenal, far exceeding my expectations.
Below are a few of my takeaways from the SPAC conference.
General Mood This Year: Off-the-Charts Excitement for New SPACs and New Deals
Conversations at the conference were frenetic but brimmed with optimism. Attendees discussed new ideas, new structures, and new momentum, and rumors swirled about several SPAC IPOs on the verge of launching and many deals on the verge of announcing or closing within the next few weeks. Not only did the attendance at this year’s event exceed 500 people, but the energy was palpable: I saw deals being done right then and there, new SPAC syndicates being negotiated, experienced sponsors having discussions with bankers for new launches, and multiple new target-side teams exploring a potential exit via a SPAC.
While most advisors reported lighter workloads last year, this year many complained of being overstretched and overworked, handling multiple fast-moving SPAC deals. The only uncertainty was around how hot and fast the SPAC market was going to take off and how hard it was going to land.
Among many SPAC veterans in attendance, it was interesting to see several “occasional” SPAC players, many of whom had stayed on the sidelines for the last three years. They were certainly back in attendance this year and eagerly exploring their options. On the first day of the conference, not coincidentally, I am sure, Bloomberg reported that Goldman Sachs was back in the SPAC world. This reentry of a bulge bracket investment bank into the SPAC market created additional buzz and was interpreted as a turning point for the market.
SPAC Activity Update
All this enthusiasm was not unfounded. Ben Kwasnick of SPAC Research, reported that SPAC IPO issuance has ramped up since mid-2024.
Not surprisingly, serial sponsors represent the majority of the SPAC IPO activity this year. This aligns with our experience at Woodruff Sawyer, where we’re supporting new launches for teams on their third, fourth, and even ninth SPAC.
Interestingly, SPAC Research reports that the amount of risk capital required to launch a SPAC IPO has decreased. They cite a lack of overfunding the trust as the primary cause, but other factors might include the increase in new types of investor arrangements that are contributing to risk capital reserves and, from the insurance side of the equation, a drastic reduction in the cost of directors and officers (D&O) insurance premiums.
As far as business combinations, multiple $1 billion+ deals have been announced and closed this year, and the pipeline seems to be heading in the direction of larger deal sizes. And while we are not currently seeing a huge number of de-SPACs, the activity behind the scenes—where teams are working towards an announcement or a closing—has certainly heated up. As Kristi Marvin of SPACInsider pointed out during her panel, many serial sponsors started coming back to the market in June 2024, which means that we are seeing the critical 12-month mark right now and should start seeing deal announcements pick up in the next few months.
Hot Topic: SPACs and Crypto
The hottest topic of discussion was around crypto treasury-related SPAC deals, improvising on the Bitcoin treasury structure first engineered by MicroStrategy. With the new administration taking a lot more favorable position on both crypto and SPACs, per Doug Ellenoff, “the convergence of the SPAC market and crypto markets has ignited a level of activity equivalent to the energy we all experienced in 2021; the innovation and positivity are infectious.” As an example, Ellenoff pointed to the April 23, 2025, announcement of a $3.6 billion business combination between Twenty One Capital, to be owned post-merger by Tether, the world’s largest stablecoin issuer, and Cantor Equity Partners, a SPAC backed by Cantor Fitzgerald.
Another example of a crypto treasury SPAC deal was the announcement five days after the conference of the proposed $1 billion business combination between ProCap BTC, LLC, a bitcoin-native financial services firm, and Columbus Circle Capital Corp. I, a SPAC sponsored and controlled by Cohen & Company, Inc., a SPAC industry veteran. The parties in the proposed transaction raised $516.5 million in equity and $235 million in convertible notes, which, according to their press release, is the largest initial fundraise in history for a public bitcoin treasury company. I am certain many will attempt to replicate this type of transaction, as rumors are already swirling about several other crypto treasury companies looking at SPACs for a business combination. Given the high level of enthusiasm we are seeing, we only hope the SPAC market is able to self-regulate and refrain from prematurely overheating into another bubble.
Risk Mitigation for SPACs
This year, I once again led the panel on SPAC litigation and risk mitigation, joined this time by Michael Heinz of Sidley Austin and Perrie Weiner of Baker McKenzie as my co-panelists. A few interesting takeaways from our panel included:
- We’re seeing large settlements of SPAC-related lawsuits.
- Many suits that are still in progress relate to deals that closed in 2020 and 2021.
- Most cases don’t get past a motion to dismiss and, if they do, with very few exceptions, they all settle.
- Transactional lawyers need to check with their litigator counterparts to make sure they structure SPAC agreements and disclosure as optimally as possible to avoid litigation.
- Projections in your disclosure documents may be avoided entirely, thereby reducing your liability risk.
- Serial sponsors who have ready pipelines may be tempted to engage in substantive discussions with targets prior to IPO, but several recent multi-million-dollar settlements serve as a strong warning against that practice.
- Target company co-registrant status is indeed exposing target companies to increased liability.
- Indemnity agreements should not be an afterthought but should be negotiated and precisely drafted to avoid problems with indemnification obligations, sources of capital, and insurance coverage down the line.
- Cheap D&O insurance policies often contain serious coverage limitations and exclusions that can leave parties unprotected against a lawsuit or an investigation.
Regulatory Mood and SEC Rules
Many market participants continue to agree that the final SPAC rules the SEC passed in January 2024 are not helpful to the market or investors. In his customary State of the SPAC Market address at the start of the event, Ellenoff pointed to the dilution disclosure requirement as not a particularly helpful one and noted that it is causing prolonged litigation in Delaware. He said that he and his firm are “actively seeking to reverse the final rules from last year.” And a recent Reuters article reports that “DOGE officials at the SEC… have in recent weeks sought meetings with staff to explore relaxing what some companies have described as burdensome and unnecessary regulations, including reworking” the 2024 SPAC rules.
On June 4, 2025, the SEC issued a concept release asking for public comment on the definition of foreign private issuer (FPI), particularly on whether the current definition should be amended to protect US investors and issuers. Depending on the commentary received from the market and SEC’s overall trajectory, the rulemaking resulting from this concept release may have a detrimental effect on some FPIs seeking to enter the US public market, including via a combination with a SPAC, but a positive effect on US domestic issuers.
Finally, Michael Campoli of Pryor Cashman LLP noted that many at the conference talked about SEC’s potential “willingness to revisit rules that have been around for a while.” One example of this is SEC’s June 12, 2025, withdrawal of 14 proposed rules issued by the previous administration.
Campoli specifically called out the possibility that the SEC would “revisit Rule 144(i), which imposes a perpetual requirement that any company that was ever a shell company be current with all required SEC filings for 12 months before investors can resell restricted or control securities.” He pointed out that “industry participants have flagged this issue for years as a detriment to capital formation” and noted that if “the SEC were to revisit this rule, it could significantly boost the ability of SPACs to raise capital in private transactions not only in conjunction with a de-SPAC but [also] during the years thereafter as a combined operating business.”
Outlook for 2025 and Beyond
Given the uncertainty and anemic deal flow that weighed on the SPAC space in recent years, the renewed optimism and energy at this year’s conference was a welcome shift. While regulatory and legal hurdles remain—and novel litigation theories are sure to spring up, particularly around the crypto/SPAC combination—the SPAC community appeared incredibly energized and ready to embrace the next wave of innovation and deal activity. New developments, like the use of SPACs to launch public crypto treasury companies, are injecting fresh thinking and enthusiasm into SPAC transactions. The D&O insurance market will need to adapt to these new ideas and to a potential shift in SEC rulemaking, which appears to be on the horizon and may offer relief to at least a portion of the SPAC market.
