Ask HN: Should I take a job with a startup that was just acquired?

#1

Post by throwaway773321 » Fri, Jan 04, 2019, 10:31 PM UTC

I received an offer with a small - medium company that's been around for a few years that I'm very excited about. The team was great, and even better the product seemed great, a truly exciting and smart idea. I wasn't alone in thinking this, as during the final stages of the interview the company was acquired by a huge software company for a lot of money!

While I am sure this is exciting for the team there currently ($$$$), it leaves me a little trepidatious. I've been told that there are plans for the startup to pretty much exist as its own company, but they couldn't honestly tell me what might change (totally fair answer).

I'm told the mood seems positive with the decision (I can assume partly because everyone has just made a bunch of money on their equity!), but will that change? I'm mainly making a move because I'm interested in the team, culture, and some future projects planned out.

I don't know anyone or have any experience with how things can change in these situations. I would hate to join and then find that over the course of a year or two everyone I liked meeting quits and the culture sours. On the plus side, I would be getting RSUs and REAL money instead of equity lottery tickets.

Does anyone here have experience with joining a company after an acquisition, or perhaps experience with how things changed after their startup was absorbed into a larger company?

Re: Ask HN: Should I take a job with a startup that was just acquired?

#2

Post by ChrisCinelli » Fri, Jan 04, 2019, 11:05 PM UTC

I do. The company was eventually shut down for reasons that were very marginally under our control. It is almost impossible that after the acquisition things will not change. But how and how rapidly is hard to generalize and depends on the people involved on both sides. You learn a lot even.

That said, you seems excited by the offer. Unless you have a competitive offer that you feel at least half as excited (or you are willing to look for one), I would not be too doubtful. What is the worst that can happen to you?

Re: Ask HN: Should I take a job with a startup that was just acquired?

#3

Post by rmk » Fri, Jan 04, 2019, 11:07 PM UTC

My suggestion: don't. From personal experience, the founding team is given an 'earn-out', i.e., they get cash for sticking around for a fixed number of years (~2 yrs). Executives get set stiff targets in revenue growth, DAUs/MAUs etc. by the acquirer.

Once the earn-out period ends, the founding team will typically ride off into the sunset (or, more typically, found another company), leaving the rest of the company in disarray.

If the smaller company is run as an independent company and the acquirer is not in the same business, then you should strongly consider other options.

Regarding RSUs: They are still paper money. Unless the acquirer is already publicly traded, you will still be left waiting for an exit event to convert your RSUs into cash.

There are a lot of variables here, and any number of them can lead to a zero-return scenario for you. If you are hoping to make money, you will be disappointed.

Re: Ask HN: Should I take a job with a startup that was just acquired?

#4

Post by ChrisCinelli » Fri, Jan 04, 2019, 11:29 PM UTC

rmk wrote: post #3

My suggestion: don't. From personal experience, the founding team is given an 'earn-out', i.e., they get cash for sticking around for a fixed number of years (~2 yrs). Executives get set stiff targets in revenue growth, DAUs/MAUs etc. by the acquirer. Once the earn-out period ends, the founding team will typically ride off into the sunset (or, more typically, found another company), leaving the rest of the company in…

If money is the main driver, look at the package they give you: that is pretty much what you get. And if you look at startups in general, most of the people end up with very little from their stock. Funders are in a slightly better position.

If money is not the main driver, ask yourself: what would make this experience negative for you? How likely is to be worse than... (you need something to compare to) ?

In lack of a more compelling alternatives, I do not see why this could not be a great learning experience for you.

Re: Ask HN: Should I take a job with a startup that was just acquired?

#5

Post by throwaway773321 » Sat, Jan 05, 2019, 12:51 AM UTC

rmk wrote: post #3

My suggestion: don't. From personal experience, the founding team is given an 'earn-out', i.e., they get cash for sticking around for a fixed number of years (~2 yrs). Executives get set stiff targets in revenue growth, DAUs/MAUs etc. by the acquirer. Once the earn-out period ends, the founding team will typically ride off into the sunset (or, more typically, found another company), leaving the rest of the company in…

Hmm that gives me something to think about. The acquirer is in a related line of business and is aggressively expanding into that niche of said line of business.

The buyer company is publicly traded. Money isn't my main motivator but it does seem to be the slight upside in what seems to be a negative situation.

Re: Ask HN: Should I take a job with a startup that was just acquired?

#6

Post by throwaway773321 » Sat, Jan 05, 2019, 12:53 AM UTC

ChrisCinelli wrote: post #2

I do. The company was eventually shut down for reasons that were very marginally under our control. It is almost impossible that after the acquisition things will not change. But how and how rapidly is hard to generalize and depends on the people involved on both sides. You learn a lot even. That said, you seems excited by the offer. Unless you have a competitive offer that you feel at least half as excited (or you a…

My main worry Is that my resume contains a lot of sport stints in the last few roles, so I would love to spend a couple years somewhere so that it looks like a better resume for the next position.