A SPAC, or Special Purpose Acquisition Company, is a type of investment vehicle that raises money through an initial public offering (IPO) to acquire an existing company. Investors buy shares in the SPAC, which has no commercial operations at the time of the IPO. The goal is to find a private company to merge with, allowing it to go public without the traditional IPO process. Once a SPAC identifies a target company, it negotiates a merger. If successful, the private company becomes publicly traded, and SPAC investors can benefit from the growth of the newly public entity. If no merger occurs within a set timeframe, the SPAC is liquidated, and investors receive their money back.