Last week, Securities and Exchange Commission (SEC) Chair Gary Gensler put special purpose acquisition companies (SPACs) at the top of his media agenda. He dedicated a speech to forthcoming SPAC regulation, did interviews on SPACs, and focused on SPACs in his “Office Hours with Gary” video explainer series. At their core, all of Gensler’s communications advocated new regulation to “protect investors” when investing in SPACs. Yet, SPACs may be attractive to investors and entrepreneurs alike because they are not subject to the typical, onerous requirements meant to “protect investors” in IPOs.

SPACs are an alternative to a traditional IPO where a private company goes public by merging with another company—the SPAC—formed specifically to raise money to acquire a private company. For a private company, SPACs avoid the costly and time‐​consuming process of a traditional IPO and may be particularly attractive to less‐​tested companies who have high capital needs or have yet to turn a profit. For individual investors, SPACs offer access to companies with high growth potential and can be easier to access than traditional IPOs.

SPACs are not new, but they’ve recently become far more popular, raising more than $155 billion through more than 580 offerings in 2021––roughly the same amount raised by traditional IPOs.

This spike in popularity has made SPACs a target for Gensler, who is now adding his own views about needed regulation to the SEC’s efforts to stem the tide of SPAC investment. Focusing on so‐​called “investor protection,” Gensler says that IPOs and SPACs are “like cases” that need to be “treated alike.” What that means to Gensler is more disclosure for SPACs, more liability for those involved in offering SPAC investments, and less information shared about the SPAC’s merger target.

But although the end result of both a SPAC and an IPO is a public company, SPACs are not IPOs. So, there’s no reason they should be treated the same. SPACs are simply another path to the public market. More paths are good for investors, who can benefit from companies choosing to go public that otherwise might have spent their high growth years private, out of reach of most retail investors. And there’s little danger that SPACs will displace IPOs entirely. While SPACs are hot right now, they are subject to market forces that will likely cool their popularity with investors, as some have recognized, including limited merger targets and less than stellar post‐​merger financial performance.

Instead of setting sights on further regulating innovation in public listings, the focus should be on understanding why many companies have preferred to stay private rather than go through a traditional IPO. Indeed, rather than limiting the information a private company shares with a SPAC contemplating a merger, why not consider allowing the same type of information to be shared during the IPO process?

Of course, investors should understand the risks inherent in a potential investment, especially where that investment, like a SPAC, is more complicated than average. And it’s never a good idea to invest in something just because a celebrity endorses it. But if Gensler is serious about wanting to “make the markets a little better for regular folks,” as he’s said, burdensome regulation that takes away choice for those investors is not the way to do it.