What Is an Acquihire?
- An acquihire is when one company buys out the other one specifically for talent. It is recent trend that is gaining popularity in India. It is an interesting option for large business to acquire talent who have had good experience in both tech and the business side of it
Benefits of an Acquihire
- There is huge supply and demand gap when it comes to talent in start-ups. Big start-ups always hiring and acquihire is an easy way to fill the demand for tech employees. A business adds a team of highly-skilled professionals who can build apps, create online services, and keep up existing software and hardware. A good acquihire brings in a lot of new talent and also the employees have experience working together as a group. An good acquihire can strengthen a company and increase its productivity potential.
- The biggest gain is that acquired team doesn’t require any training and they are already exposed to a lot of latest tools and technologies that are being used in the industry
- Flipkart, Walmart, Swiggy, PayTM and many other tech start-ups in India have performed acquihires to improve their talent base. They understand the benefits of hiring full teams of employees to run specific projects.
Structure of Acquihire deals
- No set rule exists for an acquihire, usually it is done in Talent Acquisition manner. Usually, salary + some combination of stocks, retention bonus + (premium on product or services). Many of these agreements are light on terms since the true value is the employees, not the company.
- Buyers usually decide the cost of an acquihire on a per-head basis. What that means is the company pays a set amount per staff member acquired. Most acquihires aren’t expensive acquisitions for big businesses.
- In most acqui-hires, the staff of the acquired company will interview for a new job. It’s the same as any other hiring in this regard. Management treats the potential employees like they are normal candidates. Even the founders will have to face multiple interviews.
Why acquihire is good exit option for failing startups?
Acquihiring is fast becoming successful channel in India to hire great entrepreneurial talent. Indian startups are increasingly looking at acquihiring smaller startups to gain strong team. Big Internet companies who wants to hire best minds are turning to acquihire startups India.
The game is not over for founders if their startup is failing. Every founder wants to see his business growing but inevitably many startups fails and acquihire gives the founders a right exit opportunity.
The good thing about acquihire is that the core team gets to work again on new and exciting project without worrying about finances.