Investors Don't Like Acqui-hires
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Investors Don't Like Acqui-hires
1–6 of 6 posts
Re: Investors Don't Like Acqui-hires
#2This is pretty obvious right?
All of the comments on the pandodaily article revolved around the fact that VC doesn't get their homerun payday during an acqui-hire.
It seems like the discussion around acqui-hires revolves around what the commenter's personal interests are for the most part.
However, it makes sense that the acqui-hire would become more prevalent for a couple reasons. There are many more startups being created, both increasing the supply of startups to acqui-hire and decreasing the %age of startups that exit in a home run. Also, the market price for developers is going up, and seeing someone execute and deliver a product in a product vertical you want to execute in makes you worth a large multiple of an unknown and/or average developer.
Re: Investors Don't Like Acqui-hires
#3Investors who don't want their startups to accept an acqui-hire already have all the protection they need: make a better offer.
Re: Investors Don't Like Acqui-hires
#4Investors who don't want their startups to accept an acqui-hire already have all the protection they need: make a better offer.
No. The logic employed here is the same logic that underpins liquidation preferences. If investors don't want to fund acqui-hire outcomes, they do in fact have more tools than a counteroffer.
The best operators are always going to get the best terms, but an industry-wide concern over acqui-hires could easily manifest itself in poorer terms for everyone else.
Re: Investors Don't Like Acqui-hires
#5Investors who don't want their startups to accept an acqui-hire already have all the protection they need: make a better offer.
Well, one concern is moral hazard. why is co for sale?
Re: Investors Don't Like Acqui-hires
#6Investors who don't want their startups to accept an acqui-hire already have all the protection they need: make a better offer.
No. The logic employed here is the same logic that underpins liquidation preferences. If investors don't want to fund acqui-hire outcomes, they do in fact have more tools than a counteroffer. The best operators are always going to get the best terms, but an industry-wide concern over acqui-hires could easily manifest itself in poorer terms for everyone else.
Presumably these acquisitions happen most of the time because the startup failed, this is the situation I was alluding to where they can just double down if they think they / the startup can do better but otherwise nothing is going to make this look like they picked Instagram.
If they're trying to protect against people who quit too easily or aim too low then they made the wrong bet, they're not going to avoid this if they predefine a price or terms where it's a very mediocre OK.