What are the advantages and disadvantages of going public via reverse merger?

Every time I see this done, I view the acquirer with a high degree of skepticism.

I have looked at and worked with several companies that have gone through a reverse merger. It is a great way to generate investment banking fees but I have seen little or no value for the acquirer. It is often seen as a cheap way to go public but it typically comes with residual baggage from the predecessor as well as some perception problems. With the growth in alternative markets to give liquidity to current private investors or attract new ones, the few reasons for a reverse merger are disappearing.

I have two clients who have gone through the reverse merger process. In neither case did they manage to raise much investment , if any, through public offerings or PIPEs, although they were able to sell a limited number of convertible notes to raise funding at the expense of significant dilution when the notes converted. If a business has a good financial position and story to tell, and a channel to present that story to the investment world, then the reverse merger can be a cost effective way to go public and seek the benefits of shareholder liquidity. I advise against such a move if a company hopes to raise funding and does not have the business record and potential to justify it.