I moderated the Private Equity Panel at the November 17th World Financial Symposiums conference in London. There were about 80 people in the room mostly CEOs and healthy give and take of ideas for building value in the current market. Googles Anil Hansjee echoed the strategy we have been discussing with Googles US corp dev team most of their acquisitions have been and will continue to be talent buys under $20 million, fewer than 20 employees. Most of the balance will be made up of acquisitions of category leaders, like Admob. The tough deals for Google to take on will be the companies in the middle, that have developed a business around a technology but dont dominate a sector. The CEO of Player X made a similar point: he had an early offer for the company that would have delivered a higher return to him than he ultimately got by selling after 5 years. Here is the problem for VCs, from my perspective: 99% of VC-backed deals will fall into that middle ground, the no-mans land where acquisitions dont make sense because the buyer has to overpay for talent, yet wont gain significant market share. Entrepreneurs need to take a hard look at selling early, before taking institutional money and creating a preference stack that will dilute their return.