Advice for IT Start-up Companies
Here is Paul Kedroski on this topic:
One possible exception to this strategy emerged in the comments (I recommend you read them all): If part of the plan for obtaining venture capital for a startup must include the possibility for a sell-off to GYM, then by all means it is worth thinking about and planning for that possibility.
If you are building a startup solely with the intent of flipping it to one of the majors then you are playing Russian roulette using a gun with five full cylinders, and one cylinder containing a bullet that flits in and out with 50% probability. It is, in other words, a stupid game, one that ex post looks more rational than it would truly be to have done ex ante.
The best way to get purchased by anyone -- GYM included -- is to build a great team, find a large and growing underserved market, build a great product/service for which people will pay more than it costs to provide, grow faster than the market, and stay paranoid that a hundred other companies are gunning for you all the time. If that sounds a lot like the path to building a company, not merely one that is built to flip, it isn't just a coincidence.
Building companies to flip is a dumb exercise, one that more often than not produces neither a company nor flipping.