Final answer:
SPACs are a vehicle for companies to raise capital by going public to eventually acquire an existing company. The timeline for SPACs to raise funds typically falls within a 2-year window, dependent on market conditions and investor interest.
Step-by-step explanation:
Special Purpose Acquisition Companies (SPACs) are a method for companies to raise early-stage financial capital. The process of raising money through a SPAC involves creating a shell company that goes public with the purpose of acquiring an existing private company. The timeframe for a SPAC to raise money is variable, typically occurring within a 2-year period, though the exact duration can depend on various factors such as market conditions, investor interest, and regulatory requirements.
In contrast to traditional methods where companies may rely on personal savings, credit cards, angel investors, or venture capital firms, SPACs offer a more direct route to the public markets. However, the actual fundraising process is contingent upon the ability of the SPAC to attract investors and successfully negotiate a business combination with a target company within the specified timeframe allowed for the SPAC to complete a merger or acquisition.