Advantages of a Reverse Merger

• Conclusion – As you finish reading this twelve part series there should be no doubt in your mind there are substantial differences between going public via a traditional IPO versus a reverse merger.

Reverse Mergers - The reverse merger is a great vehicle for taking emerging companies public in today’s market climate. Companies are no longer considered inferior because they choose to go public using a reverse merger. Keep in mind there are more companies going public each year using a reverse mergers than there are IPO’s. You will certainly have more control as to the outcome if you go the reverse merger route and your company will definitely be publicly traded at the end of the day, regardless whether you raise any capital or not.

Traditional IPO - The days of underwriters taking a “flyer” on an Internet startup or a tech company with an intriguing technology are long gone. There are a lot more inherent risks as we have described in our series but you will be able to raise more capital IF you can close on the transaction and your company will be trading on NASDAQ, not on the OTC Bulletin Board.

But the trick is to attract an underwriter who is willing to take you public based upon a “firm commitment”, not a “best efforts” underwriting. If you can get the firm commitment then you should consider going the traditional IPO route. But remember, if the underwriter can not sell your deal and withdraws it or if the market turns against you then you dead in the water and probably out of pocket $2MM. With the traditional IPO route you either end up a really big winner or a really big loser.

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