Killer Acquisitions: An Exit Strategy for Founders
Being acquired is how many startup founders and investors expect to make money. If you make that harder you’ll get fewer startups.
Some allege that large tech companies acquire nascent competitors to prevent certain startups from competing with them later on, effectively “killing” potential competitors before they can be a serious threat to them.
Founders still have an incentive to hold out and compete against incumbents, yet many startups are also founded and invested in only because of the possibility of being acquired by a bigger firm. Acquisitions additionally allow features to be added to benefit large existing user bases.