While VC funds may prefer one strategy over the other, it largely depends on the startup company's strengths and scalability. If the company has an impressive and competitive product offering but is operating in a niche market, it will likely be a sale candidate to a larger corporate entity that can fold it into their existing operations. If a company has developed a unique and scalable tech product and has demonstrated phenomenal growth in a short period of time, it will likely be positioned for a successful IPO exit. The amount of capital that a startup raises also influence which exit path they're moving towards. A startup company that raises over $500 million will have a significant post-money valuation, and that may make it too expensive for a strategic sale. Unless it has new technology desired by a leading technology firm, it may be difficult to find a buyer with sufficient capital. However, if a company has developed a business without raising significant rounds of capital, it may be easier to position the company for a sale with multiple buyers.