Thursday, November 24, 2016
Advantages of Reverse Mergers
Aegis Capital Corp initially provided real estate services for an affluent client base. Founded by Robert Eide, Aegis Capital evolved with the growing needs of its clientele. Today, Aegis Capital Corp serves as a financial services company providing reverse merger services.
Reverse mergers, also identified as reverse takeovers, serve as a simpler, less expensive process of going public. Unlike conventional initial public offerings (IPOs), reverse mergers do not require the services of investment banks to underwrite the shares of the company. With a reverse merger, private companies can sell their shares without necessarily raising capital.
Most companies prefer reverse mergers over IPOs for specific reasons. Reverse mergers take a shorter period of time to complete - 30 days for some companies - because of their straightforward process. There is also a higher chance for companies to successfully complete the reverse merger, unlike in conventional IPOs. Because of the efficient process, reverse mergers are less likely to be affected by unfavorable market conditions.
For companies aiming to solely convert their business into a public entity, reverse mergers serve as a viable alternative.