(This op-ed was first published in Fortune on March 9, 2020.)

In Silicon Valley, the most important thing to think about when starting a company is how you’re going to end it. The venture capital funding model that dominates the tech industry is focused on the “exit strategy”—the ways funders and founders can cash out their investment.

Today, that focus is preventing disruptive competition, cementing tech monopolies, driving companies to shelve innovations, and undermining the promise of Silicon Valley.

While in common lore the exit strategy is an initial public offering, in practice IPOs are increasingly rare. Most companies that succeed instead exit the market by merging with an existing firm. Venture capitalists and founders paid in stock don’t want to build a business for the long term. They want to cash out, preferably as soon as possible.

(Continue reading the op-ed on Fortune’s page here.)

Stanford Law School professor Mark Lemley talks with Recode’s Kara Swisher about — usually an acquisition by one of the tech giants — and why that trend is suffocating innovation.

(Click on the image above to listen to the episode.)