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Summary:

The assumed options for today’s hordes of tech startups are the rare IPO, acquisition by a large tech or media company, or death. Those are terribly stark terms. Matt Marshall of VentureBeat(née SiliconBeat) just called to say he is trying to help fill the gap with […]

The assumed options for today’s hordes of tech startups are the rare IPO, acquisition by a large tech or media company, or death. Those are terribly stark terms. Matt Marshall of VentureBeat(née SiliconBeat) just called to say he is trying to help fill the gap with an exit market of his own: VentureBoard. Nice!

“Once you get over YouTube you’re going to realize there’s not much else there,” says Matt. What about all the other tech startups, in all stages of formalization, hoping for an exit? His concept is a classifieds site that eliminates some of the dirty-laundry-airing nature of selling a company on eBay, as Kiko and a few others have done or tried to do. There are already three companies offering themselves up on VentureBoard: Open Communications, Zookoda, and Nuvvo.

Update: Brian McConnell, founder of Open Communications, wrote Om an email to say,

In my case, I am looking at an acquisition as an alternative to VC. I have a couple of cool products, and rather than risk a lot of money trying to build our own audience, I am taking them over to a company that has an audience and knows direct response marketing. Also, one of our products, Stream Codes (guide.radiohandi.com) has potential to reshape the consumer electronics industry, but we need to be part of a major organization to successfully cut deals with manufacturers. There was no way I could do that as an independent company, even if I’d been backed by Kleiner Perkins.

By Liz Gannes

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  1. I like the idea of companies that are looking for funding or looking to sell themselves to a company that can take them to the next level refraining from finding themselves on eBay. I really think Kiko technology should be worth more then what it sold for on eBay.

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  2. Perhaps startups should consider partnerships with corporations that can leverage their technology rather than jumping on the VC bandwagon.

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  3. At some level, isn’t this similar to what botique investment banks already do?

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  4. Brian McConnell Friday, October 13, 2006

    Boutique investment banks are really not optimized to handle small deals (under $10M), so unless you’ve already raised VC and are in a position to sell for much more than this, they are not going to be interested.

    The bigger issue is that there is huge range of quality among these firms. If you’re lucky, you’ll find one that’s able to open doors for you. They won’t sell your company for you, but they’ll get you to the right people.

    More likely, unfortunately, you’ll end up working with someone who bullshits you about the number and quality of their contacts, and who makes little or no effort beyond phoning of few of their friends (who are probably of little help).

    My experience with these firms has been mostly bad. They have their place, but you have to be very careful when engaging them.

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