> Even if you're determined to stay private, where will your sustaining revenue come from, especially if you're running a consumer-oriented web service?
The same place it would have if you got acquired. You've got to monetize the thing eventually, right?
You can also cut the same kinds of deals w/r/t synergies that you would as an internal business unit. C.f. HotorNot, TripAdvisor.
Suppose you bootstrap a company or take a small amount of investment with the goal of creating an on-going business (i.e. the exact opposite of "built to flip").
You need to focus on making money sooner rather than later.
OTOH, if you're acquired, not only do you have more time to figure it out, but you have more resources at your disposal.
Most of their users stick with the free service level, and as more and more startups enter the fray, they'll be pressured to offer the same (premium) services for free.
Remember what Gmail did to Yahoo's plan to charge web mail users for more storage space?
You need a solid track record of revenue to go public (it's not like the bad ole bubble days).
Even if you're determined to stay private, where will your sustaining revenue come from, especially if you're running a consumer-oriented web service?