A Small-Eat-Smaller World
By Michael V. Copeland

(Business 2.0) – How do you take a startup public in these skeptical, postbubble times? It's a question that's been vexing VCs looking to cash in on tiny but profitable portfolio companies in the face of Wall Street apathy. Now, however, they have a plan: They're forking over more money so their startups can bulk up by buying competitors. One test case is mobile-gaming firm Mforma, which received a $40 million infusion last summer and then bought two rivals in hopes of announcing an IPO by year's end. Next up? Likely a merger between Allposters.com and Art.com, which is rumored to be closing by the end of May. If the deal is sealed, the new company's annual revenue would near the magic $100 million mark needed for an IPO.