I agree with you that acquisition isn't necessarily any better than IPO as a target. On the other hand, there is a certain amount of money floating around out t

I agree with you that acquisition isn't necessarily any better than IPO as a target. On the other hand, there is a certain amount of money floating around out there and it has to go somewhere. Maybe the total volume of VC money would go down, but I suspect at least a good chunk of it would be re-targeted toward startups with long-term viability of their own. In terms of the market manipulation, I'm not saying that just anyone can come along and screw with the public markets. Dell can't manipulate the markets because the company is well-understood and operates in a well-understood market. Pretty much by definition startups are not well-understood and most (though certainly not all) operate in poorly-understood markets (or at least operate differently from incumbents in their markets). This means that startups have a better shot at successfully manipulating the public markets, allowing VCs to get paid even if the company itself doesn't pan out.