acqui-hire
Also called: acquihire, acqui-hiring, talent acquisition deal
An acquisition made mainly to hire the company's team, not to keep its product or customers. The product is often shut down, and most of the value goes to the people through job offers rather than to the owners through the price.
An acqui-hire is when a company buys another mainly to get its people. The buyer wants the team's skills (often the developers), not the product, the customers or the revenue. The product is frequently shut down after the deal, and the price paid for the company itself is modest; much of the value goes to the team in the form of salaries, bonuses and shares at the buyer.
For founders it can be a soft landing: a job, some money, and an ending that sounds better than "we closed". But it's a very different outcome from selling a working business. The founders are paid mainly for their future work, not for what they built, and the customers usually lose the product they depend on.
A profitable niche product with loyal customers is rarely a good acqui-hire candidate, and shouldn't accept being valued like one. Its value is in the revenue and the customers, so it should be priced on ARR or owner earnings, and the deal should say what happens to the customers. If a buyer's interest is mostly in hiring the founders, it's worth asking directly what they plan to do with the product.
Example
Suppose that in year 2 a large Kyiv software company offers to "buy" GarageDesk for 1,000,000 UAH, hire Nina as a lead developer on a good salary, and shut down GarageDesk within three months. That's an acqui-hire: the price is for Nina's skills, not for 240 shops paying 165,000 UAH a month.
Compare it with the offer the founders actually weigh: 6,000,000 UAH for the whole company, with Nina staying 12 months and Oscar 6 to keep the product running for its customers. That buyer is paying for the business (about 3 times ARR), not for a hire.
Common mistakes
- Accepting an acqui-hire price for a profitable business. Revenue and customers deserve a revenue-based price.
- Not asking about the product's future. Find out whether it will be kept, merged or shut down.
- Forgetting the customers. Agree on notice and migration help if the product will close.
- Counting salary as sale price. A job offer is payment for future work, not for what you built.