SPACs, the investment term you won’t stop hearing about, explained

"Both IPOs (Initial public offering) and SPACs (Special purpose acquisition company) are ways for a company to raise money. SPACs are a faster, but not necessarily cheaper, way to go public.

When you invest in a SPAC before it’s merged with a private company, you’re essentially investing in the SPAC’s sponsor, with the belief that their SPAC will make a good merger. With an IPO, you know what company you’re investing in."