A surge of mergers and acquisitions has reshaped the Silicon Valley landscape at the same time that fewer companies are launching initial public offerings.

Is that bad? At least one prominent investment banker thinks so, saying those trends could spell trouble for the region.

Paul Deninger, vice chairman of investment bank Jeffries & Company in Boston, believes that Silicon Valley is unwittingly sabotaging itself by “snatching up acquisition checks” rather than growing companies into big-league businesses.

Fewer stand-alone public companies translates into fewer challengers to incumbents, he argues, and that may hamper innovation. “The reason that oil and automotive industries operate the way they do is that there aren’t any real challengers to their ways of doing business. The same is becoming true of Silicon Valley companies (that buy promising technologies); they’re buying up smaller outfits before they become more serious threats.”

[1] San Jose Mercury: Mergers & acquisitions: Valley’s shift from IPO to M&A