58:. Compared to other mergers and acquisitions, acqui-hires are smaller, faster, and involve startups that have not earned any revenue. Acqui-hiring is most likely when talent is scarce. In acqui-hiring, the company's product is of at most secondary interest and is often killed shortly after the acquisition. The company usually tries to retain the employees and founder; the process of integration and retention is key to the success of the strategy. The benefits of these acquisitions compared to other forms of hiring is unclear.
67:
125:. The third step, crucial to the success of acqui-hiring, is integrating the new team and putting them to work. Employees from acquired startups leave the company at a higher rate. If they leave, for such reasons as dissatisfaction with product cancellation or lack of autonomy within the new company, the acqui-hire will not be successful. Founders are more likely to leave if they do not receive a high-level position in the acquired company, or if the acquired team is broken up.
1192:
180:. Acqui-hiring is particularly common in the software and services sectors. An estimated 50 percent of acquisitions by technology firms in 2011 and 2012 were possible acqui-hires. Acqui-hiring has been observed in a variety of sectors such as agriculture, consumer products, energy management, professional services, utility infrastructure, and warehousing.
286:
By 2014, the phenomenon had been discussed in the media but was not yet a subject of published academic research. The benefits of these acquisitions compared to other forms of hiring is unclear. Business researchers
Kaushik Gala and Brandon A. Mueller argue that acqui-hires whose product was based on
111:
if the company is not able to secure long-term success. Employees in the acquired company typically get a payout in stock that cannot be sold for a period of time. For investors in the acquired company, the deal may not be viewed favorably if they believe that there is collusion between the employees
86:
Although access to talented employees is one of the key factors driving the competitive advantage of companies, the best way to attract this human capital is a matter of debate. With acqui-hiring, the company is aiming to acquire not only talented individuals but a cohesive group of people that are
91:
an entire team of employees at once. Acqui-hiring can scale more easily than traditional recruiting because multiple employees are hired at once. The expertise gained from acqui-hiring can help the company pivot to a new market sector and increase innovation in established firms. Compared to other
53:
was coined in 2005. The phenomenon gained widespread attention in the 2010s due to media coverage of tech firms, although acqui-hiring has been reported in a variety of industries. With acqui-hiring, the company is aiming to acquire not only talented individuals but a cohesive group of people that
77:
traced the derivation of the phrase to a blog post in May 2005. In the early 2010s, acqui-hiring attracted widespread media attention because of some high-profile acquisitions by large software companies such as
Facebook, Microsoft, Twitter, and Google.
1086:
Kehoe, Rebecca R.; Brymer, Rhett Andrew; Keller, Jr; Kim, Joonyoung (2024). "Hiring by professional affiliation: The benefits and challenges of leveraging prospective hires' prior employment ties to improve matching and access to resources".
120:
The first step in the process is identifying talent that the company needs and locating a startup to acqui-hire. The second step is buying the company when its value is lower, especially if the technology is in the trough stage of the
87:
productive jointly. Legal scholars John F. Coyle and Gregg D. Polsky do not consider team acquisition a sufficient explanation for acqui-hiring, because in some industries it is common to
160:
It is difficult for researchers to determine the motivation for an acquisition if it was not reported in the media. A 2014 analysis of media reports found that
Facebook, Google, Twitter,
132:
In acqui-hiring, the company's product is of secondary interest and is often killed shortly after the acquisition. Often, the company was purchased both for its human capital and
189:
319:, but these are largely inapplicable to startups in California. Depending on the jurisdiction, there may be a tax advantage of buying a company over poaching employees.
202:
stated, "We have never once bought a company for the company. We buy companies for excellent people". One of
Facebook's earliest acqui-hires was the seed-funded startup
233:), which totaled over USD$ 67 million. About these acquisitions, Zuckerberg stated that hiring entrepreneurs helped Facebook retain its start-up culture.
152:, gaining access to new cancer drugs in development as well as experts. Part of the motivation for acqui-hiring may be to remove potential competitors.
911:
Camuffo, Arnaldo; Stefano, Federica De (2019). "Getting access to strategic human capital resources: a multiple strategic factor market approach".
1047:
920:
882:
BoyacıoÄlu, Beril; Ăzdemir, Mahmut N.; Karim, Samina (2024). "Acquiâhires: Redeployment and retention of human capital postâacquisition".
236:
Innovationâhiring to develop a new feature quickly. In 2010, Facebook bought Beluga messenger service. Within five months, it released
1218:
1171:
149:
1116:
Kim, J. Daniel (2023-11-17). "Startup
Acquisitions as a Hiring Strategy: Turnover Differences Between Acquired and Regular Hires".
1001:
Elfenbein, Daniel W.; Sterling, Adina D. (2018). "(When) Is Hiring
Strategic? Human Capital Acquisition in the Age of Algorithms".
100:. The downside is the large capital expenditure required for acqui-hiring. It is more likely when talent is scarce in an industry.
129:
differences between the startup and a more established company can be a significant barrier to the success of acqui-hiring.
1057:
Gala, Kaushik; Mueller, Brandon A. (2024-05-03). "Acquihires by SMEs as a strategic response to industry digitalization".
827:
112:
at the acquired firm and the acquiring firm to lower the purchase price in favor of higher employee compensation deals.
308:
291:
are more likely to be successful, because it is easier for the acquirer to evaluate the expertise of the engineers.
959:
Chen, Jun; Hshieh, Shenje; Zhang, Feng (2023-07-19). "Hiring High-Skilled Labor
Through Mergers and Acquisitions".
300:
316:
38:
1141:
Ng, Weiyi; Stuart, Toby E. (2022). "Acquired employees versus hired employees: Retained or turned over?".
369:
169:
133:
66:
1213:
104:
54:
are productive jointly. The capital expenditure of purchasing may be more tax advantaged compared to
1030:
Fantasia, Roberta (2016). "Acquihiring: A New
Process for Innovation and Organizational Learning".
304:
237:
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Strategicâto acquire the founder of the startup into a high-ranking role. Examples include
1197:
199:
126:
930:
Chatterji, Aaron; Patro, Arun (2014). "Dynamic
Capabilities and Managing Human Capital".
1172:"Talent for Sale: The Need for Enhanced Scrutiny in Judicial Evaluation of Acqui-Hires"
315:
agreements, contractual terms of employment, and the protection of trade secrets with
1207:
985:
222:
46:
255:
was the product of acqui-hiring Neven Vision and DNN Research. Google obtained both
252:
141:
1070:
1039:
312:
288:
214:
108:
34:
1187:
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On the side of entrepreneurs, motivations for accepting an acqui-hire include
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1032:
Information and
Communication Technologies in Organizations and Society
226:
203:
177:
107:
and the fact that it appears more successful than alternatives such as
97:
93:
92:
mergers and acquisitions, acqui-hires are smaller, faster, and involve
42:
1154:
895:
256:
173:
137:
161:
65:
798:
796:
794:
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763:
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and expertise from the acquisition of MicroOptical Corporation.
391:
389:
387:
334:
332:
593:
591:
578:
576:
480:
478:
311:. In some jurisdictions, acqui-hiring might help firms bypass
168:
were the most prolific acqui-hirers, and that others included
351:
349:
347:
299:
Acqui-hiring may give rise to investor claims such as fraud,
563:
561:
465:
463:
1034:. Vol. 15. Cham: Springer International Publishing.
913:
Handbook of Research on Strategic Human Capital Resources
406:
404:
27:
Process of acquiring a company to recruit its employees
209:Chatterji separates Facebook's acqui-hires into:
190:List of mergers and acquisitions by Meta Platforms
736:
669:
243:Product improvementâto enhance existing features.
961:Journal of Financial and Quantitative Analysis
814:
802:
767:
724:
700:
395:
338:
45:or other small companies primarily to acquire
8:
779:
748:
512:
496:
450:
422:
864:
852:
685:
645:
597:
582:
540:
528:
484:
438:
355:
963:. Cambridge University Press (CUP): 1â37.
984:Coyle, John F.; Polsky, Greg D. (2012).
840:
657:
633:
609:
469:
410:
328:
37:of "acquisition" and "hiring") is the
712:
567:
552:
7:
1059:Journal of Small Business Management
621:
932:Academy of Management Perspectives
70:Acqui-hiring between 2009 and 2013
25:
368:Zimmer, Ben (29 September 2010).
150:Advanced Accelerator Applications
1190:
278:web applications development.
1:
1071:10.1080/00472778.2022.2140161
737:Elfenbein & Sterling 2018
1143:Strategic Management Journal
1040:10.1007/978-3-319-28907-6_13
884:Strategic Management Journal
370:"Buzzword Watch: "Acq-hire""
309:shareholder derivative suits
915:. Edward Elgar Publishing.
303:, fraudulent transfer, and
1235:
828:"EditGrid company profile"
815:Chatterji & Patro 2014
803:Chatterji & Patro 2014
768:Chatterji & Patro 2014
725:Chatterji & Patro 2014
701:Camuffo & Stefano 2019
396:Chatterji & Patro 2014
339:Chatterji & Patro 2014
307:. Such claims have led to
301:breach of fiduciary duties
187:
969:10.1017/s0022109023000856
317:non-disclosure agreements
225:(Chai Labs), Sam Lessin (
140:, software, datasets, or
96:that have not earned any
1219:Mergers and acquisitions
1170:Nolan, Samantha (2015).
289:open-source technologies
865:Coyle & Polsky 2012
853:Coyle & Polsky 2012
686:Gala & Mueller 2024
646:Gala & Mueller 2024
598:Gala & Mueller 2024
583:Gala & Mueller 2024
541:Coyle & Polsky 2012
529:Gala & Mueller 2024
485:Gala & Mueller 2024
439:Coyle & Polsky 2012
356:Gala & Mueller 2024
274:in 1 June 2008 for the
144:. For example in 2017,
1126:10.1287/stsc.2022.0026
1015:10.1287/stsc.2018.0072
71:
944:10.5465/amp.2013.0111
688:, pp. 1447â1448.
648:, pp. 1443â1444.
240:to 750 million users.
229:), and Peter Wilson (
188:Further information:
134:intellectual property
69:
1176:Hastings Law Journal
1089:Personnel Psychology
676:, pp. 227, 230.
658:Ng & Stuart 2022
634:Ng & Stuart 2022
470:Ng & Stuart 2022
855:, pp. 303â305.
817:, pp. 401â402.
570:, pp. 869â871.
305:successor liability
270:was acqui-hired by
1101:10.1111/peps.12553
372:. Visual Thesaurus
238:Facebook Messenger
72:
1049:978-3-319-28906-9
922:978-1-78811-669-5
56:employee poaching
16:(Redirected from
1226:
1200:
1195:
1194:
1183:
1166:
1155:10.1002/smj.3361
1149:(5): 1025â1045.
1137:
1118:Strategy Science
1112:
1082:
1065:(3): 1430â1468.
1053:
1026:
1003:Strategy Science
997:
990:Duke Law Journal
980:
955:
926:
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896:10.1002/smj.3556
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200:Mark Zuckerberg
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127:Company culture
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28:
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1095:(2): 497â526.
1083:
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1009:(4): 668â682.
998:
986:"Acqui-Hiring"
981:
956:
938:(4): 395â408.
927:
921:
908:
890:(2): 205â237.
878:
876:
873:
870:
869:
867:, p. 312.
857:
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843:, p. 211.
833:
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805:, p. 404.
788:
772:
770:, p. 402.
757:
755:, p. 498.
741:
739:, p. 677.
729:
727:, p. 399.
717:
715:, p. 872.
705:
703:, p. 283.
690:
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602:
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555:, p. 874.
545:
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503:, p. 517.
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459:
457:, p. 503.
443:
441:, p. 302.
431:
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415:
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841:Fantasia 2016
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610:Fantasia 2016
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519:, p. 34.
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411:Fantasia 2016
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47:human capital
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786:, p. 2.
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374:. Retrieved
363:
298:
295:Legal issues
285:
266:
253:Google Glass
251:
208:
193:
159:
131:
119:
102:
85:
73:
50:
31:Acqui-hiring
30:
29:
1214:Recruitment
670:BoyacıoÄlu
313:non-compete
215:Bret Taylor
109:liquidation
82:Motivations
49:. The term
39:acquisition
35:portmanteau
1208:Categories
713:Nolan 2015
568:Nolan 2015
553:Nolan 2015
323:References
272:Apple, Inc
219:FriendFeed
123:hype cycle
75:Ben Zimmer
51:acqui-hire
18:Acqui-hire
1163:0143-2095
1134:2333-2050
1109:0031-5826
1079:0047-2778
1023:2333-2050
977:0022-1090
952:1558-9080
904:0143-2095
276:iWork.com
221:, 2009),
206:in 2007.
194:In 2010,
148:acquired
622:Kim 2023
282:Research
268:EditGrid
231:Rel8tion
196:Facebook
184:Facebook
170:Palantir
166:LinkedIn
156:Examples
146:Novartis
136:such as
94:startups
43:startups
875:Sources
782:et. al.
515:et. al.
257:patents
227:Drop.io
204:Parakey
178:HubSpot
138:patents
116:Process
105:burnout
98:revenue
62:History
1182:: 849.
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751:et al.
749:Kehoe
672:et al.
499:et al.
497:Kehoe
453:et al.
451:Kehoe
425:et al.
423:Kehoe
376:27 May
248:Google
176:, and
174:Airbnb
780:Chen
513:Chen
263:Apple
162:Zynga
89:poach
1159:ISSN
1130:ISSN
1105:ISSN
1075:ISSN
1044:ISBN
1019:ISSN
973:ISSN
948:ISSN
917:ISBN
900:ISSN
784:2023
753:2024
674:2024
517:2023
501:2024
455:2024
427:2024
378:2013
198:CEO
1151:doi
1122:doi
1097:doi
1067:doi
1036:doi
1011:doi
965:doi
940:doi
892:doi
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Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
