Emerging Business Models Toward Commercialization of Bioprinting Technology

For a regular IPO, (initial public offering, the offering of a company’s shares to the public for the first time to raise capital) the financial advisers/investment banking firms hired by the company guide it through the process, assist in determining the offering price, the type and the amount of securities to be issued, the proper timing of the IPO, and help draw the markets’ interest to the offering. Despite all of the obvious benefits, the process is lengthy, complex, and quite costly. Meanwhile, a reverse IPO, a.k.a. reverse merger or reverse takeover, is a much simpler, speedier, and less expensive way for a private company to go public through buying a majority of the shares of a publicly traded shell company (normally, this shell company is in bad financial shape, dormant or fully defunct, while still maintaining its listing on a stock exchange) and merging it with their private company. The combined company ckeeps the public status (listing on a stock exchange) of the original shell company, while its business and assets are essentially those of the former private company. Obviously, unlike the case of a conventional IPO, the company using a reverse IPO does not immediately raise capital through this process, but rather changes its status to become public, thus allowing it the access to public capital markets through subsequent offerings, providing liquidity, etc. Some critics argue, however, that a reverse IPO has an important downside and should be considered a somewhat inferior alternative to a regular IPO – it misses substantial strategic guidance from experienced financial advisers and lacks a certain “stamp of approcval” from the investment community. This may lead to the company’s shares not being properly valued, add downward pressure on the valuation, and add to the stock’s volatility.