Remove Deal Structure Remove Employee Remove Liquidation Preference Remove Product
article thumbnail

The Corrosive Downside of Acquihires

Both Sides of the Table

If the money comes from professional investors it usually has a “liquidation preference” meaning that their money comes out before the founders or common stock. (If That’s why liquidation preferences exist – downside protection. I know many rank-and-file employees. Does Yahoo!

article thumbnail

Acquihires 101: Tips for Founders

Scott Edward Walker

An acquihire is essentially the acquisition of a startup for its talent/team (rather than for its products or services). How is the Deal Structured? As discussed below, this structure exposes the founders to potential legal liability resulting from their breach of fiduciary duties as directors and/or executive officers.

Founder 45