But part of this is cultural. American Internet entrepreneurs are more likely to want to sell their companies these days. But in China, it’s like the late 1990s: Success equals an IPO. On the other side of the bargaining table, American companies like to buy technology, engineers and potential competitors and aren’t afraid to potentially overpay to get what they want. Chinese Internet companies have the cash and the stock currency: Tencent is the third largest Internet company in the world by market cap and Baidu is the fifth. But so far, they’ve been loathe to do big acquisitions that would dilute the corporate culture.

That has to change at some point… doesn’t it? We ask DCM’s Ruby Lu about the implications of this IPO-only culture, especially the talent war it’s creating among big companies and startups in China’s hotspots. Video below.

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Authors: Sarah Lacy

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