An acquihire is an acquisition made mainly to obtain a startup’s employees rather than its product, service, or operations. The word combines “acquisition” and “hire.” section 31.3.1 section 8.1
The usual target is a stellar team: hiring skilled people is difficult, so an acquirer moves quickly to bring them inside. Founders may receive a useful outcome, even when the product itself is not the prize. section 31.3.1
What makes an acquihire different:
- The acquirer values the team’s skills more than the startup’s product or service. section 31.3.1
- The arrangement can benefit employees, who may move into senior roles at the acquiring company. section 31.3.1 section 8.1
- Investors generally dislike the outcome because the business is being bought for its talent rather than investment growth. section 8.1
Recognizable pattern
Facebook acquihired Drop.io, Hot Potato, Beluga, and FriendFeed; Google acquihired Aardvark, Slide, Like.com, and reMail; Twitter acquihired Summize and Fluther. Employees from these startups later held senior roles inside the acquiring companies. section 31.3.1
