
VCs: Startups Are Too Reliant on the M&A Market - dawie
http://www.readwriteweb.com/archives/vcs_startups_are_too_reliant_on_mergers_and_acqusitions.php
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pg
A badly titled article. What the guy actually says is that _VCs_ are too
reliant on the M&A market.

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dpapathanasiou
It's true, but what are the alternatives to getting acquired?

You need a solid track record of revenue to go public (it's not like the bad
ole bubble days).

Even if you're determined to stay private, where will your sustaining revenue
come from, especially if you're running a consumer-oriented web service?

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joshwa
> Even if you're determined to stay private, where will your sustaining
> revenue come from, especially if you're running a consumer-oriented web
> service?

The same place it would have if you got acquired. You've got to monetize the
thing _eventually_ , right?

You can also cut the same kinds of deals w/r/t synergies that you would as an
internal business unit. C.f. HotorNot, TripAdvisor.

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dpapathanasiou
But the time factor difference is _huge_.

Suppose you bootstrap a company or take a small amount of investment with the
goal of creating an on-going business (i.e. the exact opposite of "built to
flip").

You need to focus on making money sooner rather than later.

OTOH, if you're acquired, not only do you have more time to figure it out, but
you have more resources at your disposal.

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nickb
Problem is that a lot of Web2.0 startups have no real business models. Serving
ads & relying on AdSense is not a business model.

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trekker7
If a Web startup makes money with AdSense it means people are visiting its
website. The delivery of content that people want is a business model,
regardless of where the money eventually comes from.

