Interesting fundraising jujitsu move I found recently:
Company A = a tech startup with a next generation technology for textile materials. No revenue; couldn’t raise capital in this tough funding environment.
Company B = an old-school textile manufacturing business with steady cashflow but not much growth
Company A does a reverse merger with Company B (I say reverse because A doesn’t have revenue, but B has); the combined entity raises capital, some of which goes to the tech side (ie the former Company A business). Effectively equivalent to Company A raising money. The combined company is now a textile manufacturing company with a real revenue and the next generation technology that can be applied firsthand to their own business, potentially boosting revenue significantly over the next few years.
This might be a more common move in the PE world, but tough funding environment means we’re seeing more creative moves like this happening in the startup/VC world as well.