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A Special-Purpose Acquisition Company (SPAC) is a pooled investment vehicle that allows public stock market investors to invest in private equity type transactions, particularly leveraged buyouts. SPACs are shell or blank-check companies that have no operations but go public with the intention of merging with or acquiring a company with the proceeds of the SPAC's initial public offering (IPO).

Advantages:
It is an opportunity for individuals not qualified to buy into hedge or private-equity funds to participate in the takeovers of private operating companies that those funds typically do.
SPACs are more transparent than private equity as they are registered offerings regulated by certain SEC rules, including filing their financial statements and full disclosure of any material events affecting the company
The ability for investors to regain most of their funds, typically greater than 98%, if the SPAC fails to generate an acquisition within a 24 month period or should they vote against the deal and convert their shares for cash
The SPAC vehicle for the target company is the opportunity to effect a reverse merger that yields more capital
The special rights of shareholders to vote in approval or rejection of the deal
The unit structure, the ability to decouple the units and trade separately the common shares and the warrants, allows investors to correspondingly increase or decrease their risk return profiles
They provide liquidity to an investor as SPACs are publicly traded (i.e. investment comes in the form of common shares and warrants which can be traded)

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