SPAC’s or special purpose acquisition companies, burst onto the scene in 2020 as the hip way to take Silicon Valley’s hottest startups public. Unlike traditional initial public offerings, SPACs were seen as modern and accessible, allowing any investor to put money into the companies of the future at the same time as professional money managers. SPACs sometimes called blank check firms begin to shell companies. They raise money from investors then list on a stock exchange. Their sole purpose is to hunt for a private company to merge with, and take public because the company going public is merging with an existing publicly traded entity that can make business projections and skirt some of the other regulations associated with IPOs after regulators approved the deal, the company going public replaces the SPAC in a stock market, upstart companies of all stripes clamor to participate enamored with the pool of eager investors who were ready to back them and enticed by celebrity SPEC creators and bankers who meant money when they complete deals.

The company behind dog toys subscription service BarkBox did his back merger. So did the personal finance app. ,Sofi Technologies Incorporated office sharing company we work incorporated found his back after its plan to IPO infamously blew up Electric Vehicle battery makers, flying taxi startups, self driving car companies, and a seemingly never ending parade of biotech names all jumped into the fray. Now the hype is giving way to reality. Like so many investment FADs. What at first seemed like a way to earn easy money has revealed itself to be full of potential perils. The threat of tighter regulation is looming and high profile stumbles by some companies that went public lies facts have taught investors some harsh lessons. It turns out investing in unproven upstarts isn’t for everyone, and with interest rates looking likely to rise in coming months, all sorts of speculative investments from technology stocks to Bitcoin are getting hit.