SPACs in 2020 raised $83 billion on U.S. exchanges, accounting for about 46 percent of the total of all IPOs, according to data compiled by Bloomberg. In 2021, 117 SPACs have already raised more than $35 billion, putting them on pace for another record year. For example, USHG Acquisition Corp., a blank-check company led by Shake Shack founder Danny Meyer, filed to raise $250 million in an initial public offering.

While SPACs have their advantages and can be an attractive alternative to the traditional IPO process, there are certain key considerations to be aware of before jumping in. Here is what investors need to know.

In the chart, below, you’ll see how the SPAC M&A deals are taking off, based on data from Refinitiv.