Or I suspect a third where the Vespa management team would leave and start their own company that would appreciate at a higher rate than yahoo due to greater growth potential.
So yahoo spins them out and has their equity grow faster than yahoo stock, or they lose the product to a new competitor.
There's truth in what you say. I was interpreting (without studying closely) the scale of what's happening to be beyond the scale where ICs have significant leverage, so not the startup venture scale but more like B-C round. It's already clear this stuff's going to be big, and the biggest players have the most advantages, it's time to scale, quit, or pray for a proprietary technological breakthrough. But you're right about giving small equity stake holders a more pure play though equity is an expensive way to pay people.
So yahoo spins them out and has their equity grow faster than yahoo stock, or they lose the product to a new competitor.