After all, companies like Yahoo! (YHOO - Get Report) have been snapping up small start-ups like del.icio.us. The risk, Hornik says, is that the company becomes locked in to a narrow exit strategy. If a buyer doesn't emerge, the VCs end up throwing good money after bad to keep the company going. Wiser investors will put money only into companies that can be scaled into larger businesses.Or, to put it another way: Companies built to be bought are putting the cart before the horse by focusing on an exit strategy first, and an innovative idea second. Build the company on the foundation of a good idea and, if it's innovative enough, the exit strategy will present itself when the time's right, whether an IPO, an acquisition or going it alone.
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