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Ask HN: Talk me through the acquihire process

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Ask HN: Talk me through the acquihire process

#1

Post by MagnitudeFC »

I need your advice, guys.

My seed stage startup isn't going to make it to its series A, and we have 1.5 months of cash left. I am exploring an acquihire to see if I can find a soft landing for our team. I’ve got a meeting scheduled with a fairly senior Corp Dev person at a FAANG for Monday. I’ve never worked for a BigCo before nor have I been through an acquihire process, so I would love any advice on how I should navigate this.

(In hindsight I am very aware that this was a lousy situation to have put myself in, but here we are anyway.)

Specific questions:

1) What can I do to maximize my chances of getting my team acquihired?

2) Are acquihire packages substantially better than just trying to interview at these companies?

3) How long does this process take from start to finish?

4) What can I expect post acquihire? Will my team get absorbed into the org or will we have a chance to continue working together?

I know there are a lot of variables here so I'm providing some context below.

TL;DR we have decent traction on our product but not enough to justify a Series A and I don't want to keep treading water by taking on any extension capital from our existing investors. Therefore I am exploring an acquihire for our team. We are a 4 person team consisting of 2 founders (CEO and CTO) and 2 amazing engineers who have worked together for 4 years. We work really well together, work insanely hard and have built products together that we are proud of, but sadly didn’t find PMF.

On a personal note: I’ve been in the startup game for the last 10 years and I’m 36 years old. Expecting my first child this year. I need some stability in my life. Therefore I think it is time to go work for a BigCo for some time and figure out my life.

Re: Ask HN: Talk me through the acquihire process

#2

Post by romanhn »

Just so you're not surprised later - the acquihire-to-big-company stories I've heard all involved the team having to interview for the jobs via the standard process. So it's not so much a shortcut into a FAANG, necessarily. There's also a chance that while you'll make some money as an owner, they might not find a spot for you depending on how your own interview goes. Also wouldn't hold my breath for the team staying cohesive even if they all pass. Wishing you good luck, hope it ends up a positive experience!

Re: Ask HN: Talk me through the acquihire process

#3

Post by MagnitudeFC »

romanhn wrote: post #2

Just so you're not surprised later - the acquihire-to-big-company stories I've heard all involved the team having to interview for the jobs via the standard process. So it's not so much a shortcut into a FAANG, necessarily. There's also a chance that while you'll make some money as an owner, they might not find a spot for you depending on how your own interview goes. Also wouldn't hold my breath for the team staying…

Thanks, that is really helpful to know going into this. Any insight into what an interview process might look like? I am non-technical (founder/CEO, mainly focused on sales/biz dev) while the rest of my team (co-founder/CTO and 2 engineers) are highly technical. Our product is in the wheelhouse of what this FAANG is already working on.

Re: Ask HN: Talk me through the acquihire process

#4

Post by romanhn »

MagnitudeFC wrote: post #3
romanhn wrote: post #2

Just so you're not surprised later - the acquihire-to-big-company stories I've heard all involved the team having to interview for the jobs via the standard process. So it's not so much a shortcut into a FAANG, necessarily. There's also a chance that while you'll make some money as an owner, they might not find a spot for you depending on how your own interview goes. Also wouldn't hold my breath for the team staying…

Thanks, that is really helpful to know going into this. Any insight into what an interview process might look like? I am non-technical (founder/CEO, mainly focused on sales/biz dev) while the rest of my team (co-founder/CTO and 2 engineers) are highly technical. Our product is in the wheelhouse of what this FAANG is already working on.

I assume the Corp Dev person will walk you through what the process will look like. Don't know much about the sales/bizdev world, guessing that's the area that'll make the most sense. CTO will likely be interviewing for an IC engineering role unless there is prior experience with leading larger teams. Lots of material out there on how to get into FAANG - start prepping as soon as you feel their interest is legitimate (assuming they do subject you to interviews).

Re: Ask HN: Talk me through the acquihire process

#5

Post by MagnitudeFC »

romanhn wrote: post #4
MagnitudeFC wrote: post #3

Earlier quoted context omitted.

Thanks, that is really helpful to know going into this. Any insight into what an interview process might look like? I am non-technical (founder/CEO, mainly focused on sales/biz dev) while the rest of my team (co-founder/CTO and 2 engineers) are highly technical. Our product is in the wheelhouse of what this FAANG is already working on.

I assume the Corp Dev person will walk you through what the process will look like. Don't know much about the sales/bizdev world, guessing that's the area that'll make the most sense. CTO will likely be interviewing for an IC engineering role unless there is prior experience with leading larger teams. Lots of material out there on how to get into FAANG - start prepping as soon as you feel their interest is legitimate…

sound advice, thanks!

Re: Ask HN: Talk me through the acquihire process

#7

Post by kjellsbells »

First of all, its excellent news that the FAANG is willing to talk about this. That deserves congratulations alone.

That said, if this is the first conversation, be cautious. After all, what stops them from using the conversation to identify who your star people are, and simply poaching them after your company winds up?

Assuming that you are further along, you need to identify which big org division of the FAANG you fit in and agitate for that, eg get time with the CVP or the Level X person and make your case. They are typically measured on how much contribution margin acquisitions bring, so make sure you have numbers, and if you dont have great numbers, have a very compelling story. Maybe you unlock a segment for one of their products by being "better together" for example.

You should also be prepared to answer deep questions onnthings like security, not because they suspect you of having a virus or anything so 1990s like that, but because if you want your product to survive and evolve into a first party offering from the acquirer, you will be expected to go through the compliance that all their other services go thru. Trivial examples: is there a software BOM for every package in your stack. Is your code control up to par with their standards. Etc.

Re: Ask HN: Talk me through the acquihire process

#8

Post by brailsafe »

I was in the spot of one of the employees (contractor at the time) for a further along startup that run out of money and wasn't going to get further investments. It looked like the owner of the company was under mega stress during this time, and so was I, because I was waiting on hypothetical buyers to float us cash while they did their due diligence.

What ended up happening, after months of being in the dark, was that most of company was absorbed into the new parent, but somewhat at arms-length. We weren't put on the standard engineering track of the parent because most of the remote employees were working through Remote Inc (a proxy).

The CEO and leadership changed immediately, maybe sticking around in some kind of advisory role for at most a month, and are now all at others.

I got caught in round 2 of layoffs, so managed about 8 months of true employment or so. They eventually renamed the product, and many of the engineers are still there afaik.

It could have been worse, I suppose, the package was less than I was making as a contractor but more stable. Things got more bureaucratic pretty quickly, more long arbitrary meetings that were very difficult to keep up with and more pointless than I'd ever seen.

Re: Ask HN: Talk me through the acquihire process

#9

Post by MagnitudeFC »

brailsafe wrote: post #8

I was in the spot of one of the employees (contractor at the time) for a further along startup that run out of money and wasn't going to get further investments. It looked like the owner of the company was under mega stress during this time, and so was I, because I was waiting on hypothetical buyers to float us cash while they did their due diligence. What ended up happening, after months of being in the dark, was th…

Thanks for sharing your experience!

Re: Ask HN: Talk me through the acquihire process

#10

Post by MagnitudeFC »

brcmthrowaway wrote: post #6

Interesting. Ive always thought FAANG reaches out to small companies, not the other way around

What we are working on is very relevant / core to what this BigCo does so there are legit reasons why they are interested. One of our investors made the intro to a very senior VP there who told Corp Dev to speak with me.
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