And why did anyone invest in it? It wasn't for the hopes of an IPO because the chances are too low.
That's not true. VCs will only invest in a startup if they think it has a chance of an IPO. Angels prefer that sort of startup too, though they are not as rigid about it as VCs.
OK, so the possibility of an IPO is a necessary condition for investment, but is it sufficient? Would any kind of investor put money in if they think there is a chance of an IPO (with the odds being what they are now) but zero chance for an acquisition? Isn't acquisition the attractive fallback that tilts the odds more favorably? Wouldn't a scenario of no acquisitions stack the odds against the startup so high as to preclude investment? That is the big question. Aren't acquisitions the motor behind the startup system? Aren't they its bread and butter?
That's not true. VCs will only invest in a startup if they think it has a chance of an IPO. Angels prefer that sort of startup too, though they are not as rigid about it as VCs.