I don't fully understand acqui- hires especially points like this "For example, don’t be afraid to say “I’ve raised $X dollars and my investors are looking for a 2x return.”

If the company is flatlining, why arent acquirers just poaching talent and paying no regard to investors? Why is investor return on a product/service that the "acquirer" will not support or that they don't even care about part of the equation?

Is it because acquirers don't want to alienate investors who may have great cos for them in the future? That's what I've heard but that seems like a soft justification to me. There is a much smaller pool of acquirers than investors so while an investor might not be happy with an acquirer poaching from his prior portfolio company, it doesn't seem they'd walk away from a future acquisition if the economics made sense.

Genuinely curious as to logic of acqui-hires from the acquirers perspective as the conversation suggests investors have some leverage in these discussions when it seems logically that they'd have none.

Some of the acquirer's considerations for acquiring rather than aggressive poaching are mitigating potential for lawsuits and making it easier to get key employees and founders who are worried about their reputations in the tech business and might otherwise be un-poachable. Also, it makes it easier to capture most of the employees since every other company will aggressively recruit from the startup once rumors of the startup's imminent demise start circulating.

From an effort, risk, and cost standpoint acquisition may actually be cheaper than wholesale poaching while allowing most people on the other side of the transaction to save face which may have its own long-term benefits in the tech business.

Acqui-hires seem to me like a Silicon valley thing. I have not heard of them being done anywhere else. Where I come from, if your product is in decline and you have a talented, well-known team, prepare to get poached.

Acqui-hires seem like favours between investors to me. In SV the concentration of investors and companies is so high, which means that the overlap in deals is also high. So an investor in Acquirer A pushes for a soft purchase of Startup X, knowing that there's a high likelihood Startup X's investors point him to a sweet deal in the near future.

There are some subtle points in there.

(as an aside, the bar on the left makes it look like a block quote.)

> (as an aside, the bar on the left makes it look like a block quote.)

As does <blockqoute> in the html.

fixed: http://www.readability.com/articles/vi6qkk41

Thanks David. I agree with these points. Given the founder's priority is for their team, how do they effectively represent both their team's interest and the investor's interest to the acquirer? In a tight situation, who gets the preference and how much?

Why do you take it as a given that the founder's priority is the team? As a founder you have different stakeholders. Perhaps your investors have been with you for years and your team just joined, or the opposite. Like the article says, you can't generalize regarding the employees.

"For example, founders who don’t think of their team’s welfare first in a soft landing probably won’t get funding from their prior investors."

So in this context, a founder's "team" is the investors, yes? Not the employees?

I see no reason to think so. The article uses both 'team' and 'investors'. No reason to think the writer is disorganized.

It also says in a soft landing 'investors basically get no money back.' So the only concern seems to be how the team is treated.

So where do customers and early adopters fit into this whole thing?

This was interesting and helpful. It wasn't clear though how much this was directed at Acqui-hire vs Soft Landing. It seems most of it was Soft Landing focused?