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Pros and Cons

Advantages of a Reverse Merger

  • Quicker time to market
  • Lower overall cost
  • No necessary IPO “window”
  • No risk of Underwriter’s Withdrawal
  • No Underwriter (saves on cost)
  • Less overall dilution
  • Less of a distraction for management’s time

Disadvantages of a Reverse Merger

  • Less capital raised than with an IPO
  • Focus on short-term results
  • More difficult to obtain broader market support
  • Fraud and greed are more prevalent
  • More public disclosure required
  • Greater legal exposure