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Amid IPO Slump, Acquisitions Are Holy Grail

Are IPO-destined startups an endangered species? So says Robert Ackerman Jr., founder of Allegis Capital. "The ecosystem that allowed young companies to go public has been destroyed," Ackerman tells the San Francisco Chronicle. "The market for initial public offerings remains badly broken in the aftermath of the financial panic of 2008, but its malaise began even earlier," reports SFGate.com. A report co-authored by David Weild of the GrantThornton accounting firm traces the current IPO slump to market and regulatory developments over the past decade.

According to the National Venture Capital Association, 38 VC-backed companies have gone public this year -- down from 86 in all of 2007 but up from six deals in 2008 and a dozen in 2009. As a result, Association president Mark Heesen tells the paper that the slump is conditioning more and more entrepreneurs to equate success with getting acquired.

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