As we have mentioned previously underwriters are few and far between so finding broker dealers to participate in your IPO would be extremely difficult in this financial environment.  Unlike an IPO, there is no public disclosure required with the APO or reverse merger until the transaction closes.  No one is aware the transaction is taking place except the Buyers and Sellers of the OTCBB shell so no disclosure is required until the transaction closes and the new company files its Super 8K with the SEC.

Therefore, a private company can pursue going public through an APO or reverse merger and realize what kind of Investor response and valuation they will receive. When a company is going through the entire IPO process they do not know, until after they have spent millions of dollars, whether their deal will be accepted by the financial community and get funded.    There are many variables with the IPO process including timing and perception.  For example, if your company is going public at a time of market consternation as we are experiencing today and/or your company is in a sector that is in disfavor at the moment your IPO could very well be cancelled or postponed until market conditions become more favorable.

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Other posts of the serie

  1. Alternative Public Offering – Part 1 - May 5, 2009
  2. Alternative Public Offering – Part 2 - May 6, 2009
  3. Alternative Public Offering – Part 3 - May 7, 2009
  4. Alternative Public Offering – Part 4 - May 8, 2009
  5. Alternative Public Offering – Part 5 - May 12, 2009
  6. Alternative Public Offering – Part 6 - May 13, 2009
  7. Alternative Public Offering – Part 7 - May 14, 2009
  8. Alternative Public Offering – Part 8 - May 15, 2009
  9. Alternative Public Offering – Part 9 - May 16, 2009
  10. Alternative Public Offering – Part 10 - May 18, 2009
  11. Alternative Public Offering – Part 11 - May 19, 2009
  12. Alternative Public Offering – Part 12 (This post) - May 20, 2009
  13. Alternative Public Offering – Part 13 - May 21, 2009
  14. Alternative Public Offering – Part 14 - May 22, 2009
  15. Alternative Public Offering – Part 15 - May 25, 2009
  16. Alternative Public Offering – Part 16 - May 26, 2009
  17. Alternative Public Offering – Part 17 - May 27, 2009
  18. Alternative Public Offering – Part 18 - May 28, 2009
  19. Alternative Public Offering – Part 19 - May 29, 2009
  20. Alternative Public Offering – Part 20 - May 30, 2009