Failure to Secure a Business Combination: The company may not be able to identify or complete an initial business combination within the required timeframe, leading to liquidation and return of funds to public shareholders at a potentially reduced value.

Shareholder Dilution Risk: Public shareholders will experience significant dilution from the issuance of shares to the target company's owners, private investment in public equity (PIPE) investors, and the exercise of sponsor warrants upon the completion of a business combination.

Inadequate Due Diligence: Due to the accelerated nature of SPAC mergers, the company may not conduct the same level of due diligence on a target company as a traditional initial public offering, potentially leading to an overvalued or underperforming acquisition.