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The Price Isn't Right: More Than Big Bucks Needed For Some Net Entrepreneurs To Sell

For many of today's entrepreneurs, the goal isn't to get rich quick, but to grow their businesses. They do what they do because they love the process of taking a novel idea and creating a viable business. The money will eventually come; they needn't cash out so soon.

That's one reason why the perception of a new Internet boom is just that. (See the InformationWeek story, "5 Reasons We're Not In A Tech Boom.")

One such example: the founders of Riya, a service that searches the Web for photos using face and image recognition technology. Google recently courted Riya, but its owners wanted to remain independent, says Bob Williams, a general partner in the venture capital firm Bay Partners, which recently invested $15 million in the startup. Riya executives struggled with whether "to build big or go home, as they say in the Valley," Williams says. "They decided they wanted to maintain control of their own destiny, take capital investment, and build a much bigger company than have a lucrative or relatively short-term exit."

These entrepreneurs have endeavored on their innovations for years. They love what they've created and have little desire to jettison their work. They don't want to lose the independence to run their ventures as they see fit.

Still, an overpriced tender could prove hard to reject, even in the post-Internet era. "If an extremely generous offer for an acquisition gets put together," says Alun Roberts, marketing VP at WiQuest, a two-and-a-half-year-old maker of Ultra Wideband chips used in wireless devices, "that's something you'd have to consider." But such exorbitant bids are as rare these days as a Yankees World Series championship. The last time that occurred was in 2000, the year investors suddenly wised up.

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