Large public companies often acquire small private start-up
companies to add new capabilities to their portfolios. This
strategy is particularly common in the technology sector, where
established players can take their pick of a multitude of
start-ups. Given the nascent nature of start-ups, start-ups
typically have limited assets, often consisting of a small number
of software or hardware platforms. Oftentimes, of potentially
greater value to an acquirer is the start-up's talent pool, and
hence, the phenomenon of the
"acqui-hire".
The essential concept of the "acqui-hire" is an
acquisition that is driven by a desire to harness the target's
key employees, such as software developers and engineers. The
opportunity to import a cohesive team of talented employees can
represent tremendous value to an acquirer, particularly when such a
team has a record of generating and commercializing innovative
ideas. In a sense, the acquirer is buying what it hopes will be the
team
