There are a lot of characteristics to look for to determine what makes for a good SPAC founder’s group. A couple years ago, sponsor groups were primarily PE and or former C-level executives, says Legacy Acquisition Corp. Former CFO Bill Finn. But recently, SPAC sponsors have come to include entertainers, athletes and politicians as interest in SPACs grows. So, experience, as well as their fundraising ability, is coveted.

"The management team has to have the ability to raise what's referred to as founder's capital on the front side," he says. "That money is going to be used for paying some of the closing costs, which is underwriter's fee, listing fee. But the remainder of that's going to be working capital that's going to be used for up to two years going forward to the help with the diligence, finding a target diligence and so forth. So, you have to have a team that can actually attract that type of capital."

Another important component is the composition of the management team.

"I've worked with a couple of SPACs post-legacy on a consulting basis and what I’ve seen a lot is they will get four or five former C-level executives and then pepper in one or two analysts to round out the team. And what I think people have to understand on the front side is that there's a lot of work that's involved. First you have to identify a target, you have to do diligence and then you have to get into the de-SPACing process, the proxy and that type of stuff. But along the way, there's a lot of SEC compliance work that needs to be done. So, it's really a full-time-plus-plus-plus job, and you need to have the team that can actually do that and the commitment from all team members to essentially do that."

Odeon Capital Investment Banker Eric Gomberg says investors very much value serial sponsors because if you've gone the distance to complete a transaction, you understand the work that it entails.

"There were unprecedented levels of IPOs last year, there were as many IPOs as the prior 10 years combined. Things were just on fire," Gomberg says. "So, there are a lot of new folks in the industry and things may get challenging for first timers who saw this as a hot segment."

Among sponsors, he says what's really valued is having proprietary deal flow.

"There's a reason why I want to invest in this sponsor team and not that sponsor team," he says. "This one is the most attractive in the consumer segment or in the food and beverage segment or hospitality because they have done it before, they've created value, they have know-how."

Having the fully fleshed out team with analyst support that have the ability to go the distance is important, he says, but also having talent and deal flow, being able to understand why this team is going to be able to get a transaction done and that team may not, are important to understand before pursuing a SPAC deal.

Finn and Gomberg, along with DLA Piper's Matthew Gorra and Penny Minna, spoke at last year's Baltimore Smart Business Dealmakers Conference about SPACs, offering advice from the trenches. Hit play above to catch the full panel discussion.