How Reverse Merger Firms Raise Capital in PIPEs: Search Costs and Placement Agent Reputation

Published: Jun 23, 2019
Abstract
We examine the role of placement agents in private investments in public equity (PIPE) deals of firms that went public via a reverse merger (RM). We find that reputable placement agents with greater expertise (expert agents) help RM firms to complete their PIPE deals in a smaller number of financing rounds (closings) and raise funds from a larger base of private investors. In exchange for these benefits, RM firms advised by expert agents agree...
Paper Details
Title
How Reverse Merger Firms Raise Capital in PIPEs: Search Costs and Placement Agent Reputation
Published Date
Jun 23, 2019
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