What is an "acqui-hire" and how can it impact your career?
In today's highly competitive technology industry, lucky start-up founders and their teams are being acquired. Organizations around the world as well as Silicon Valley see these teams as massive assets to their success. Over the last decade, the concept of “acqui-hire” has been utilized to secure this needed expertise.
Acqui-hire is a recently coined word merging the words acquisition and hiring. Acqui-hire is a business transaction in which a company is acquired primarily to recruit or retain that company's core employees rather than to gain control of its products or services. The acquiring company may decide they no longer want to continue the service of the targeted company. In that case, the product or service is phased out or discontinued. The acquired talent is then able to fully focus their skills, knowledge and creativity on their new employer’s goals and projects.
Acqui-hire is not a company acquisition in the traditional sense. An acquisition allows the entire business and its employees to be purchased. With an acqui-hire, it is a targeted acquisition of a start-up’s core group. It could be the Founder and original start-up team, just the Founder, or combinations of these essential founding members. It depends on what the acquiring company sees as most important to meet their goals. The purchasing company desires the key, cream-of-the-crop-brain-trust to transfer their unique skills to the purchasing company’s projects and interests. It’s no surprise that Facebook has had several acqui-hires in past years to improve and advance their interests.
The terms of purchasing and pricing of an acqui-hire as well as who specifically is acqui-hired are complicated. There are times that a founder of a company may not want to leave but others who assisted with the birthing of the start-up do desire to move on. It’s flattering to know that your brand of genius is in demand but be aware that this is a time to consider everything, not just the payout. Recognize that you are a valuable commodity. It’s time for you to interview the company that seeks to acqui-hire you.
Being considered for acqui-hire places you in a position of strength. The consideration alone says a lot about the participants. Here are a few basic tips to consider:
Negotiate for your needs. Hopefully during the purchasing phase, the acquiring company will be open, transparent, and honest with those they are wishing to acqui-hire. The company badly wants something you have -- your skills and expertise. Let your needs be known and ask specifically for what you desire.
Don’t be distracted by the shiny things. Your payout, future compensation, and stock in the new company looks great but there is more to a happy work life than just money. Consider it all in a comprehensive manner. Discuss it with trusted counsel.
Assess the culture fit. Does your philosophy work with the new company? How does their vision of teams, leadership and strategic timelines mesh with yours? Can you see yourself using your skills for their benefit and growth as well as your own?
Will the new company embrace your exclusive creative talent or put you in a box they think you belong in? Will you be allowed to be creative and take on new, future-minded evolving roles?
If a foreign company is making the offer, read the fine print carefully. Protect yourself above all.
Entrepreneurs who create, organize and construct a start-up along with their nuclear founding group are a breed of their own. Like wild horses they can at times be difficult to coral and tame as their creative juices flow at rates difficult to quantify. Organizations desiring to acquire these start-up teams should be mindful of issues with retention of such talent. Founding a company, bringing it to life and loving the atmosphere of chaos is in their blood powering the adrenaline rush. These people quickly become bored and restless, yearning to once again risk it all with a group of fellow, like-minded, risk tolerant people, who like gypsies need to wander. Having the money, these entrepreneurs seek to throw the dice again for new ventures and may not stay as the acquiring company had initially hoped.
The competitive technology space will continue to be even more competitive as innovation evolves. Acqui-hire is just another high-level tool keeping organizations equipped with the best talent possible.
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