The Investors’ and Issuers’ Summit on Alternative Capital Raising Strategies Conference was held at The Harvard Club in New York City on March 31st and April 1st, 2008. The speakers addressed several different topics, but there was particular interest in reverse mergers as a main alternative for companies seeking to go public. All of the speakers agreed that the main problem confronting small cap companies was the inability of the marketplace to participate in underwriting these emerging growth companies.

With the standard underwriting of an IPO averaging $229MM in 2007, it is clear most underwriters have taken the flight to safety and are only doing deals for companies that approach billion dollar valuations.

If there is doubt in your mind where the traditional IPO marketplace is heading, read the following statistic for the first quarter of 2008. According to www.ipohome.com, only 22 companies went IPO versus 53 companies for the first quarter of 2007. The startling news is the average capital raise exceeded $1 billion per deal compared with $186MM for the first quarter of 2007. While there are fewer underwritings, the deals are getting much larger.

This explains why it is so difficult for small cap companies to go public– no sponsorship! The conference speakers addressed the alternatives companies could take to become publicly traded, with the main topics concerning S1 registrations, reverse mergers into an OTCBB shell and listing on the AIM London Exchange.

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