Acquisitions are a way that investors get their money back, so they encourage investors to invest in startups, and by its nature that encourages innovation. Per

Acquisitions are a way that investors get their money back, so they encourage investors to invest in startups, and by its nature that encourages innovation. Perhaps not as much as random $100K grants given out on the street corner would, but it does encourage company formation and execution. IPOs do the same thing. I have trouble understanding this paragraph. It seems to argue that acquisitions encourage company formation and execution. So far so good--but what's the definition of innovation in this discussion anyhow? Perhaps the most confusing idea to me is suggesting that investing in startups does encourage innovation, but not as much as randomly giving out grants would. Is it possible to compare the efficacy of the VC, M&A, IPO ecosystem to those targeted grants or even a guaranteed wage? To me, that is worth exploring. Instead I fear we get SV press releases heralding innovation in something--anything--other than yet another example of cashing out for the established network of moneyed interests.