In the absence of an active IPO market, alternative public offerings have become the new IPO. An alternative public offering combines two transactions: 1) a reversemerger, which is a means for a private company to become publicly traded, and 2) a PIPE financing, which is a private placement into the newly public company.

Private companies can pursue alternative public offerings independent of underwriters and irrespective of market conditions.  As a result, alternative public offerings are a viable option for private companies even when the IPO market is inactive.

In recent years, there have been nearly twice as many reverse mergers as U.S. IPOs. From 2007 through 2011, 1,040 reverse mergers were completed, for an average of 208 per year. In contrast, from 2007 through 2011, there was an average of 117 U.S. IPOs per year, with as few as 31 U.S. IPOs in 2008. These numbers illustrate the preference for reverse mergers over IPOs.