Acqui-hiring or Acq-hiring (a portmanteau of “acquisition” and “hiring”) is the process of acquiring a company to recruit its employees, without necessarily showing an interest in its products and services—or their continued operation.
It is basically is a fancy way to say your company is being bought predominantly for the fabulous team you’ve assembled and not for the product/service you were trying to bring to market.
The process of a talent acquisition provides a relatively favorable exit strategy for employees with the prestige of being bought by a larger company, combined with the typical process of hiring. The companies doing the buying say it is a talent acquisition, and it typically comes with a price per head.
At the end of the day, acquihires are fairly cosmetic. Employees get to save face after a startup fails with a nice bonus and a new job. Investors get a return on their money, instead of losing all of it. The acquirer gets much needed talent. Everybody wins (sort of).
The actual money is typically doled out in two parts: some cash for debt (investors, contracts, and liabilities), and a pool of stock and cash (bonus) for the acquired employees. Startups that raise convertible debt, for example, receive some cash to pay off the debt – i.e. investors get most of their money back. The acquired employees get stock that vests over a 4-5 year period, a small cash bonus, and a salary.
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