“It’s Taken Me 27 Years to Become an Overnight Sensation”

(p. B1) The flashiest trend in finance traces back three decades to a pair of old law-school buddies. Now, they are finally cashing in.

Investment banker David Nussbaum and lawyer David Miller —known to each other as “Nuss” and “Miller”—invented the special-purpose acquisition company in 1993 to give private firms another way to access everyday investors.

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“It’s taken me 27 years to become an overnight sensation,” said Mr. Nussbaum, a 66-year-old from Roslyn, N.Y., on Long Island, who co-founded the SPAC-focused investment bank EarlyBirdCapital Inc.

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(p. B5) Many on Wall Street were suspicious of SPACs because their predecessors were called “blind pools” and tied to penny-stock fraud in the 1980s.

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In the early 1990s, the Davids spent over a year working with regulators to install protections for investors and other changes to prevent fraud before completing the first blank-check firm. Among them were the right for a SPAC’s investors to get their money back before a merger with a private company goes through. They also beefed up disclosure requirements ahead of such deals. Those features are now touted by blank-check company bulls.

Still, SPACs struggled to compete with traditional initial public offerings and other methods for raising money until splashy names like sports-betting firm DraftKings Inc. started using them to go public in recent years and more startups began using them to make projections to investors—something that isn’t allowed in a traditional IPO.

“It’s become bigger than anyone expected,” said Mr. Miller, a 66-year-old from Queens, N.Y., who is managing partner at law firm Graubard Miller . . .

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“I am really happy for them,” said Arthur Spector, a venture capitalist who ran the first SPAC Messrs. Nussbaum and Miller worked on in 1993. “They put in a huge amount of work and from some people took a lot of grief.”

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Both men said they now plan to work until it is no longer fun.