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.
Venture Capital's Touch of the Bubbly
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.