M&A attorney Doug Cogen says build a good company and acquirers will find you

As we've pointed out several times over the last few months, the overwhelming majority of venture-backed startups that get to a liquidity event do so via the acquisition route.

Even though the number of IPOs doubled last year for VC-backed startups, mergers and acquisitions accounted for more than 80% of their total exit value in 2007.

Late-stage startup executives who've built a business that will soon be big enough to consider an initial public offering often have potential acquirers sniffing around well before a potential stock offering.

A few weeks ago, Paul Deninger, the chairman of the investment bank Jefferies & Co., told us here that startup entrepreneurs in that position should "pick up the phone" when bankers or strategic buyers call as a way to keep all options open. 

In this interview, we'll hear from another veteran who's been at the table when M&A deals have been signed.

Doug Cogen, who heads the M&A practice at the Silicon Valley law firm Fenwick & West, has some advice of his own for entrepreneurs who find themselves in that enviable position. 

While there are things that a young company can do to make itself more attractive to strategic buyers, "don't try to prepare yourself too much" to be an acquisition target, says Cogen, who's advised networking giant Cisco Systems on more than 50 transactions.

Instead, "prepare yourself to be a great stand-alone company... and the buyers will find you." 

"The best way to get the attention of acquirers is too be out there in the marketplace... out there where their customers are seeing you."

Look for more on the M&A versus IPO question next month, when we'll play the second part of this interview, when Cogen discusses valuations and when startups should hire an investment bank.