What is Acquihiring?
"Acquihiring" is the practise of buying a business largely to recruit its top personnel. (The phrase is also occasionally spelt "acqui-hiring" or "acq-hiring"). For other reasons, this is not in favour of M&A deals (e.g. increasing market share, owning intellectual property, or refining product strategy).
The buyer is typically a bigger, more established business that is frequently backed by a venture capital firm. This corporation is more interested in the talent of your organisation than in your goods and services. Thus, the acquihire transaction's main goal is to guarantee access to the specific knowledge and skill set of your team. After the transaction is finished, the buyer might quickly expand its internal capabilities.
How much does an acquihire cost?
An acquihire contract structure can be created in a number of different ways. Businesses typically structure the transaction by selling stocks or other assets for a portion of the total amount. However, the employees who the buyer wishes to acquire end up with the majority of the deal's value.
An acquihire typically costs less than a conventional acquisition. This is so because the buyer is primarily focused on the business's personnel. These deals aren't free, though, because the buyer has to offer recruits a perk to signing up.
As a result, an acquisition hiring valuation is mostly based on the buyer's perception of the value of your personnel. The cost of acquiring retention packages for your team members plays a significant role in determining the purchase price.
How do I get acquihired?
Are you thinking about acquiring a startup? It can be one of the best departure plans if you've worked hard to build a team of top-notch employees and keep them on board. To wind down the firm successfully and avert undesirable outcomes, it's still crucial to understand how to navigate the process.
If you're looking to acquire someone, take these actions:
- Make a list of the target businesses for the deal to start. Finding larger companies interested in entering your niche is your best hope. This interest could be either direct or indirect, such as by releasing new products or luring staff away from your business.
- Next, focus on the targets that have the best chance of success to reduce your list. Do these businesses share your fundamental goals, principles, and values? Have they recently gone on an M&A buying spree to acquire your rivals? How do they recognise and keep on board top performers?
- To test the waters, create a pitch deck and connect with people in your network. When the time is perfect, request a meeting and explain your company's strengths honestly and openly.
You can also partner with a third-party organization such as Talent et-au del to seamlessly acquire or get acquired by other companies!