This may be a contrarian view, but: I'm not convinced it's good for the buying company. Good engineers are hard to find, but this is an awfully expensive way to hire; you may not keep the good people for very long; and if you're the kind of company that has a really hard time hiring good people, you may not also be very good at getting engagement and productivity out of the people you acquihired.

My view on acquihires is that to some extent it's a trick the acquiring company plays on itself. Some manager is getting to hire a few good people using money (the acquisitions budget) they wouldn't otherwise have access to.

Acquihires are more about hiring functioning teams composed of engineers and executives who are used to working with each other. That's a lot more expensive to build than just the salaries; and you can generally take that team and throw them at a problem with a reasonable expectation they'll accomplish something.

Also, there's generally some amount of IP and customer data involved as well.

"you can generally take that team and throw them at a problem with a reasonable expectation they'll accomplish something"

For about 6 months to a year, after which time most of them have left, or have gone into "waiting for the golden handcuffs to come off" zombie-worker mode on a project they have no inherent interest in.

Totally anecdotal but the couple of acquihires I've seen from the inside have gone like this and it seems to be the natural state of them based on what I've heard second-hand from others.

I agree with this based on the 20 or so people I've known to go through this process to join a large company (amazon, google, etc). I've heard first-hand accounts of people even re-negotiating deals just to get out of the golden handcuffs they thought they could tolerate but couldn't. I understand this sounds a bit hoaky and I would love to give names and companies here, but obviously can't.

Agreed; they tend not to be great deals for the acquiring companies long-term. But short term you can rally that team to build something else, and your likelihood of finding the mythical 10x developer (or manager) is statistically higher in a startup that successfully launched a product in a compressed time frame (even if the market didn't work out for them).

Any acquisition involves a lot of turnover. Guaranteed that this turnover is built into the models they use when evaluating acquihires. Consider how expensive most company's talent acquisition costs are though (upwards of $100k+ per candidate hired for top talent) and it starts to make sense.

VCs are totally the problem here. It's not that VCs are bad people who want to screw over users, but their business model requires them to get payback on their bets, even if it's small. It can be hard to know up front if an idea is viable as a hockey-stick software company or if customer acquisition is much, much harder - often because you don't know who your target customer will be specifically until you've iterated a few times.

And many times, there's no other exit option for the VCs. Does it suck for users? Absolutely - which is why companies often have lots of apprehension about being early adopters of a startup's technology. It's why B2B startups are really hard, and why they tend not to hockey-stick because the customer acquisition costs are high and don't shrink with scale.

It's up to the founders to convince their VCs to pass on the acquihire because they think the company still has hockey-stick potential. Zuckerberg did this a number of times - it was still really arrogant, but it paid off for Facebook and shows why founders need a bit of arrogance to be successful. It's a lot harder to do this if you're running a startup that doesn't have a lot of market traction.

I think most VCs would rather see the company stick it out and go for the hockey-stick & IPO. An acquihire is a blip on their returns; it's basically worthless. They're usually arranged as a courtesy to founders, so that if you work your butt off for 3 years, do everything right, and still don't find success, you don't leave with hard feelings toward the other people you worked with.

You get acquihires when the assumptions behind the company's business model have been proven false and there's basically no way to solve it other than rebooting the company. Arguably this is an argument to not take VC until you've got the hockey-stick trajectory, so you can pivot & reboot at will without dissolving an existing organization. But even this sucks for customers, if you have any.

>VCs are totally the problem here. It's not that VCs are bad people who want to screw over users, but their business model requires them to get payback on their bets, even if it's small.

Doesn't that make them bad though? I mean it's like saying "It's not that the mafia are bad people who want to screw over people, but their business model requires them to blackmail and occasionally kill" (not comparing levels of "badness" of course, merely showing the problem in said reasoning).

It's not like following a particular "business model" is not a decision people get to make. And if people take the VC model that favours acquihires, then they very much have decided to do stuff that screws with users.

Another thing that should be mentioned is that most VC's have a close relationship with bigger tech companies. Its a way to move money out of the public markets and back into private. There are multiple implications with this type of behavior.