Reverse Merger

Reverse merger allows your private company to go public.  

Reverse merger financial transactions are becoming increasingly popular and accepted. It is an alternative means for private companies to go public. The public shell is a vital aspect of a reverse merger transaction. A public shell is a publicly listed company with no assets or liabilities. It gets the name “shell” because the only thing remaining from the current company is its corporate shell structure. When a private company merges into this entity it becomes a shell.

There are several benefits to a reverse merger when compared to an Initial Public Offering (IPO). You will often receive a higher value for your company and the company won’t have to have an underwriter. Another few benefits are that it is much cheaper and less time-consuming to go public this way. Also with a reverse merger, the ownership control will not be as diluted as with a regular public offering.

More businesses qualify for a reverse merger because a long and stable history of income is not required to qualify. The lack of an earning history will not keep a privately-held company from going public this route.

There are a variety of sources for financing a business besides a reverse merger. These include small business loans, business credit cards, revolving lines of credit, account receivables factoring, or venture capital to name a few. 


onEntrepreneur is an online magazine centered on the world of business, entrepreneurship, finance, marketing, technology and much more. We are regularly updated – sign up with our newsletter to send the updates directly to your inbox.

Leave a Reply

Your email address will not be published. Required fields are marked *