Silicon Valley, home to the world's software industry, is experiencing a goldrush. The advice among computer staff in California these days is: "Get an idea, start a company, and go public or get bought out in three to five years. It's the quickest way to become a millionaire."

Failing that, they say, a good software engineer can join a start-up company and get stock options. A few years later, if the company goes public or is bought out, the stock options will at least pay for a new house.

Last week the Irish telecommunications company, Aldiscon, became the latest Irish software company to strike gold, when it was taken over by the British company, Logica, for £57 million.

Other software companies to have been taken over in recent years include Kindle and Credo, who were taken over by the British banking software giant, Mysis. Others have opted to go public, most notably the educational software company CBT, and technical software company IONA, both of which were floated on the US-based NASDAQ stock market.

Both IONA and CBT have done well since going public. CBT, founded in 1985, was launched on the market in April 1995. From an initial price of $8 per share, their stock has since risen to over $60 a share.

Its chairman, Mr Bill McCabe, says there were three principal reasons for floating the company: it gave access to virtually unlimited capital in the US, it gave added credibility among customers who can see the company's results, and the flotation benefitted shareholders and employees.

Mr McCabe says CBT, based in Clonskeagh, chose NASDAQ because most of the big technical players are there. He says the NASDAQ market understands and knows how to value technical companies, and explained that very few, if any, companies quoted on NASDAQ pay dividends.

"All earnings are expected to be retained," he says. In general, investors expect companies to grow and stock prices to rise on this market.

IONA Technologies, based in Pembroke Street, Dublin, went public on NASDAQ last February, and has announced record results since then. Mr Colin Newman, marketing director, says the board of directors had always wanted to go public: "It was seen as an endorsement of our technology." He said their ORBIX products have such a broad market that it was important for the company to be seen to remain independent. This was one of the arguments against a takeover.

Like CBT, IONA's launch also allows them to raise capital for growth. Mr Newman concurs with CBT's reasons for choosing NASDAQ, adding that it provides high visibility and reassurance for its customers.

CBT and IONA have both offered stock options to employees. This means employees have the option to purchase shares, usually at prices lower than the expected market value.

These shares vest over time, allowing the employees to get cash for their stock, and encouraging them to stay with the company.

Mr Newman explains that, in the software industry, employees are a company's greatest asset. Companies find employees are encouraged to stay if their stock options are likely to become valuable. He says it is also exciting for workers to feel they own part of the company. This has led to the phenomenon of employees of software companies monitoring their stocks on various sites on the World Wide Web.

As Aldiscon demonstrated last week, a public launch is not the only option for a software company. Kindle was one of the first Irish software companies to be bought out, in 1991.

It was first bought by ACT, which was subsequently bought out by Mysis. Kindle sees Mysis as providing a good parental umbrella for growth.

Mysis also acquired Credo, the banking software company, last September. Credo had been wholly Irish owned, and was started in 1987. Credo says there are advantages to being associated with a successful parent company: their leading product - FONTIS - can now be marketed on a wider scale, as an element of Mysis's range of electronic banking products.

Indigenous Irish companies employ nearly half the 12,000 people working in the software industry here, according to NCB. It is a major growth industry, but until Irish investors realise the potential of technology stocks, local companies feel they have little option but to look abroad for sources of additional capital.

In the meantime, the goldrush continues.