how does a special purpose acquisition company spac work 
spacs are commonly formed by investors or sponsors with expertise in a particular industry or business sector and they pursue deals in that area spac founders may have an acquisition target in mind but they don t identify that target to avoid disclosures during the ipo process called blank check companies spacs provide ipo investors with little information prior to investing spacs seek underwriters and institutional investors before offering shares to the public during a 2020 2021 boom period for spacs they attracted prominent names such as goldman sachs credit suisse and deutsche bank in addition to retired or semiretired senior executives the funds that spacs raise in an ipo are placed in an interest bearing trust account that cannot be disbursed except to complete an acquisition in the event it is unable to complete an acquisition funds will be returned and the spac will ultimately be liquidated a spac has two years to complete a deal or face liquidation in some cases some of the interest earned from the trust can serve as the spac s working capital after an acquisition a spac is usually listed on one of the major stock exchanges in 2019 spac ipos raised 13 6 billion this was more than four times the 3 5 billion they raised in 2016 interest in spacs increased in 2020 and 2021 with as much as 83 4 billion raised in 2020 and 162 5 billion in 2021 as of march 13 2022 spacs have raised 9 6 billion 3