[ethbro]

> How can it be that these companies can afford to buy companies at a premium, throw away massive parts of the value of the company

It's almost like the lack of robust anti-trust prosecution by world governments have so enriched large, rent-seeking companies that they can literally afford to burn money and still come out ahead...

[big_chungus]

On the other hand, preventing acquisitions reduces available exits and might discourage future innovation (which in turn might promote more trusts).

[bordercases]

There needs to be a larger gradient of funding options than "Waste cash until unicorn" or "rent-seek until next bailout", and "dominate small-to-medium market niche" or "sponsor and penetrate next manufacturing commodity".

We've seen so much wastage from the prevailing financial model in SV tech.

[perl4ever]

I don't understand. Your options are (1) be small, try to grow fast, (2) be big, (3) be small, don't try to grow fast, and I'm not sure what (4) means. What else is there?

[bordercases]

What behavior would prevent a technology like ultra-cheap phased arrays from being locked up due to the corporation seeing some potential in either the technology or the team to buy them, but then not giving both the leeway to develop the market for the technology further?

In this specific case I guess we don't know the full picture of what Lattice Semiconductor intends to do, but there are many examples in software of startups getting acquihired and then the team dissolving into new projects that are more familiar or closely aligned with the pre-existing business model of the company.

Since it's always possible to just turn the startup into a subsidiary I'm sometimes confused as to why this happens, unless if it's an issue of maybe brand dilution or the market opportunity being too small to be worth the overhead of keeping a separate entity tied to a larger one. Which is a part of why more opportunities for low-growth or long-tail companies would be important, since now in the case where the means for bringing the IP to the market are eliminated no one gets anything at all.

[ethbro]

Use-it-or-lose-it provisions for all acquired technology, by entities over a certain size?

If you are demonstrably developing a piece of technology, kudos. It's yours, you bought its owner.

If you are not doing anything with it, you're required to offer FRAND license terms to anyone interested in the technology.

Would at least make the tech available that's currently getting tossed in a corporate closet in the basement.

[_2d30]

I can't believe this is getting downvoted. It's the equivalent of sticking your head in the sand and hoping that if you can't see a bad thing then that bad thing doesn't exist. This is a clear case of incentive design and too strong of an arm in preventing acquisitions can come back to bite you. Don't pretend this isn't the case, acknowledge it and factor it into your beliefs around optimal anti-trust law.

[ethbro]

That there exists a strictness of anti-trust law / prosection which is harmful does not opine on whether or not stricter anti-trust law would be harmful or beneficial.

So a bit of a red herring.

[TomMarius]

The founders obviously wanted to exit

[paulmd]

everyone wants to exit, the only question is how many zeroes it'll take for you to admit it. If I offered you a billion dollars for 100% of your startup today, would you really actually not exit?

what's the old saw? "now we're just haggling over the price"...

https://quoteinvestigator.com/2012/03/07/haggling/

[bordercases]

Then how do we realign capital to stop keeping large loss-running companies or now slow-growing companies on life support so that basic innovations can still penetrate the market?

IIRC Zuckerberg had the option to relinquish control of his company but other than taking that sweet sweet In-Q-Tel dollar still did his best to stay at the helm.

[nicoburns]

Agressively tax large organisations. There'd be a cost to that, but as this comment chain is discussing, there's also a cost to leaving them with the money and allowing them to use it to stifle innovation.

[hug]

Aggressive taxation is a prisoner's dilemma involving every government in the world.

Good luck solving that problem. (Honestly, I wish good luck to anyone trying to solve it. Corporate tax is fucked.)

[bordercases]

There are massive cash reserves that Google and IIRC Amazon have that are on the books let alone in off shore bank accounts. There is room for better tax policy here for sure.

What should be more surprising though is how e.g. Google has ties to USG (through Schmidt) but can still escape harsher taxation. At the same time – maybe that's why they can escape harsher taxation... because USG benefits by other means.

[bsder]

I would instead move toward "aggressively tax passive investment above some limit."

The issue isn't large amounts of money. The issue is large amounts of idle money.

[beatgammit]

Is passive investment really idle? If you give it to a bank, they turn it into loans. If you invest in stocks, you're driving up the value of the shares so the company can sell at a premium to innovate. If you invest in corporate bonds, you're giving cash to companies to innovate (or at least helping increase the value of loans, which decreases future interest rates, encouraging innovation).

The only way to make your money useless is to hold cash since it's designed to decrease in value over time. Pretty much everything else is promoting some kind of innovation/growth.

[nraynaud]

And in the end all those big companies become banks.