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. Almost certainly the startup would have raised some capital.

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? The purpose of this post is briefly (i) to provide an overview of acquihires and (ii) to discuss the significant legal issues that founders must address. What is an Acquihire?

Founder 45