The New York Times (NYT) is reporting that Yahoo’s (YHOO) board plans to reject Microsoft’s (MSFT) $44.6 billion bid, launched about a week ago. This on the heels of an article, titled Yahoo Sale Could be Bad for Minnows, in which the New York Times explored the implications of the potential diminishment of one of the traditional “exit strategies” for entrepreneurial startups. Venture capitalists and startup entrepreneurs have long adhered to a playbook of creating cutting edge technology with the hope of being acquired by the big three of Google (GOOG), Microsoft, Yahoo, and to a lesser degree, AOL (TWX). With the potential of one big shark swallowing another shark, the competition for acquiring innovative startups lessens and entrepreneurs (minnows) have one less avenue for becoming fabulously wealthy.

I am a minnow. As a founder of web technology startups, I too have dreamed of selling my company to one of the juggernauts. How many company founders have sat around in a basement or garage imagining how perfectly their ideas and products fit within the technology portfolio of Google or Yahoo?

“Dude, this idea rocks and Google will buy us out!”
“Hell yeah! We’re gonna be rich!”

We’ve all been guilty of this delusional exchange of wishful thinking. The more disciplined among us indulge a little in this fantasy but focus on the building of actual businesses, executing strategy, creating great products or rendering flawless service, increasing revenue, controlling costs, adjusting to the market, growing a user base, and keeping our customers and employees happy. We know intuitively that building a good business will be rewarding long term in one way or another. Setting out from the beginning to be acquired almost always affects the company and business plan negatively in subtle ways. All the best startups were created by people who set out to fundamentally change the world or at least some small corner of it, not to get bought out.