Acquisition (Acqui-hire)

Definition

When a company buys another startup not for its product, but primarily for its team. The startup equivalent of a zombie becoming useful.

Example Usage

Our Series B didn't close, so we're hoping for an acqui-hire from a larger company who wants our ML engineers.

Origin

Modern startup terminology, emerged in 2000s

Fun Fact

Acqui-hires typically result in founders getting paid pennies on their startup's valuation because 'you're really just getting jobs'

Source: Modern startup and M&A terminology

Related Terms

Beginner

warm introduction

A referral to an investor through a trusted mutual connection, as opposed to cold outreach. The difference between getting a response and having your email automatically archived.

🚀 Startup / VC

Intermediate

exiting

The startup world's polite euphemism for cashing out and abandoning ship, ideally with a massive payday that makes all those 80-hour weeks seem worthwhile. Can range from a glorious IPO or acquisition to quietly shutting down operations while pretending you 'pivoted to consulting.' It's the entrepreneurial equivalent of checking out of a hotel, except you're either leaving with millions or owing money to everyone you know.

🚀 Startup / VC

Advanced

preemptive rights

The right to participate in future financing rounds to maintain ownership percentage, preventing dilution through passive-aggressive legal provisions. Pro rata rights by another name, somehow more intimidating.

🚀 Startup / VC

Intermediate

option pool

A reserve of shares set aside to recruit employees with stock options, typically carved out before valuation to dilute founders rather than investors. A necessary evil that feels like robbery when you're calculating founder ownership.

🚀 Startup / VC

Intermediate

extension round

Additional capital raised on the same terms as the previous round (like a Series A-1) rather than progressing to the next stage, buying time without the stigma of a flat or down round. The startup equivalent of taking an incomplete rather than failing the course.

🚀 Startup / VC

Advanced

SAFT

Simple Agreement for Future Tokens—a legal instrument for investing in future cryptocurrency tokens, for when you want equity but make it crypto.

🚀 Startup / VC

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