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. Once the SPAC identifies a target company, it merges with it, allowing the private company to become publicly traded. SPACs have gained popularity as a faster and often simpler way for companies to go public compared to traditional IPOs. They provide investors with an opportunity to invest in private companies before they are listed on the stock market, but they also come with risks, including the potential for poor investment choices.