What is a Special Purpose Acquisition Company (pre-acquisition) (SPAC)?

SPACs are publicly listed companies whose management teams raise money at an initial public offering (IPO) and generally have 12 to 24 months to find a target company to acquire. Proceeds from a SPAC’s IPO must be deposited into a trust account and invested in Treasury bills or government money market funds, while the SPAC’s management team seeks an appropriate acquisition. The trust account is monitored by a third party entity and generally cannot be used for anything other than the acquisition of a company.