Tech startup acquisitions usually fall into three buckets. In rare cases, they’re good for both parties—a company could be doing very well but faces steep regulatory hurdles, like YouTube and PayPal. The acquirer gets a great deal in the long run, but it’s fairly clear that the startup could not have survived on its own. More commonly, one of the two parties gets a vastly better deal than the other. When the startup wins (Geocities, Broadcast), it sells at the peak of a bubble or at the peak of its own faddish popularity, then declines through mismanagement, a failure to innovate, or both.
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