Article · 12 min read

Acqui-Hire Deals: How They're Structured and What Founders Actually Get

Value Add VC Free Intermediate

It walks a worked example where an '$8M exit' headline collapses to roughly $1.9M net in the founder's pocket once you run the liquidation waterfall (1x preference paid first, unvested equity cancelled, most value re-routed into the acquirer's new-hire RSU package). This is the exact math the house answer is warning you to do before you get excited about a number.

  • An acqui-hire is a team hire dressed as an acquisition: model the cap table waterfall before you react to any headline price
  • Your existing unvested equity usually gets cancelled and reappears as the acquirer's 4-year RSU grant, so 'the offer' is partly just a future salary you have to stay to earn
  • Investor 1x preferences are paid before founders and common see anything, which is why a small price can leave you and your team with little cash
Open on valueaddvc.com ↗

The question it answers

  1. A big company wants to acquire us instead of buying our product. How do I even think about this?

Read with it

  1. A repeat founder who sat on both sides of the table lays out how to run a lightweight seller-led process at early stage, and... First Round Review Article · 25 min read How to Sell Your Startup: The Complete Guide to Running an M&A Process as a Founder First Round Review (with Daniel Debow)
  2. The India-specific reality the global pieces skip: how Indian acqui-hire consideration gets split across upfront cash, salary... GrowthPal Article · 10 min read Acqui-hiring a Startup in India: How Deals Are Currently Valued GrowthPal
eChai Partner Brands The partnership →