Law Commons^™

Exit, Voice, And Reputation: The Evolution Of Spacs, Usha Rodrigues, Mike Stegemoller

Scholarly Works

This Article tells the story of a new type of business—the special purpose acquisition corporation ("SPAC"). The promoters of a SPAC begin by forming a shell corporation with no assets. They then take the company public on little more than a promise that they will strive to complete the acquisition of a target in the near future. We present the first empirical study of the SPAC contract design, and use a hand-collected dataset to trace its evolution over the past nine years.

While SPACs are a new form, their contract design borrows heavily from private equity's playbook. Private equity managers …

Entity And Identity, Usha Rodrigues

Scholarly Works

The function, indeed the very existence, of nonprofit corporations is undertheorized. Recent literature suggests that only preferential tax treatment adequately accounts for the persistence of the nonprofit form. This explanation is incomplete. Drawing on psychology’s social identity theory, this Article posits that the nonprofit form can create a special “warm-glow” identity that cannot be replicated by the for-profit form. For example, a local nonprofit food cooperative sells more than the free-range eggs or organic strawberries that Whole Foods and other for-profits market so effectively. The co-op offers community participation and an investment in local farms, a distinctive ethos that is …