According to Daryl Yurek, these companies are referred to as blind pools. Blind pools refer to two types of shell companies commonly used to raise capital and go public. The first type is Canadian shell companies, or CPCs, which are specifically created for the purpose of going public through a reverse takeover or a similar transaction with a private company. CPCs are initially funded by investors, with the raised capital covering the costs of the RTO process and supporting the company’s operations post-transaction. Once the RTO is complete, the private company becomes a public company by merging with the CPC and issuing shares to the CPC shareholders.

On the other hand, SPACs are a type of shell company that is formed exclusively to raise capital through an initial public offering, with the intention of using the proceeds to acquire a private company. SPACs are established using capital raised from investors, which is held in a trust until a suitable acquisition target is identified. Once an acquisition target is identified, the SPAC uses the funds raised in the IPO to acquire the private company and take it public.

Both CPCs and SPACs offer advantages for private companies seeking to go public and raise capital, including a faster and more streamlined process than a traditional IPO and access to a wider pool of investors. However, they also come with significant risks and challenges, such as the need to identify a suitable acquisition target and the potential for dilution of shareholder value. As emphasized by Daryl Yurek, it’s crucial to evaluate the costs and benefits carefully and work with experienced legal and financial professionals before investing in CPCs or SPACs.