A Special Purpose Acquisition Company (SPAC) is a type of investment vehicle that raises capital 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 identify and merge with a private company, allowing it to go public without the traditional IPO process. Once a SPAC identifies a target, it negotiates a merger, and if successful, the private company becomes publicly traded. This process can be quicker and less costly than a traditional IPO, making SPACs an attractive option for many private companies looking to enter the public market.