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Comment by vinceyuan | Hacker News Reader

Is it fair to Oyster's investors? According to Engadget and Recode [1], "a portion" of Oyster's staff (including its CEO and co-founders) are jumping ship for Google's Play Books division. In short, this is an indirect acquisition -- Google is snapping up the core of the company without buying all of its assets.

[1] http://www.engadget.com/2015/09/21/oyster-shutting-down/

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>Is it fair to Oyster's investors?

The alternative is ... what?

-- Actually it looks like Google will pay back investors some or all of their investment.

And even more importantly, who cares? An acquihire is always a risk, as much as failure. Investors should (I imagine) be building that into their risk model.

An acquihire is the implied alternative. I'm not sure why companies would ever acquihire when they could do this with the appropriate signing bonus.

Because there are assets other than just the people. Code, network relationships, reputation, service contracts, company partnerships, IP, etc. There can also be non-competes, NDAs, security clearances, stock vesting and a multitude of other agreements to factor in.

Non competes are unenforceable in California.

Assuming that the employees ever signed a Non Compete.

Google has no onus to be fair to Oyster's investors.

And let's be honest, if you become a challenge to the company to keep around, they'll have little loyalty to you. Why should the reverse be true? (usually)

Actually, honestly, it is a bit of a shock. I don't know many tech companies, if any at all, out of NYC.

From the linked recode article: "But sources said it will end up paying investors, who put a reported $17 million into the company, for the right to hire some of its staff."

That sure sounds similar to the anti-poaching agreements that Google, Apple, etc already got in trouble for.

What makes this different? Why shouldn't it just be a free market for these employees (and founders), and Google is free to offer that money directly to them, instead of needing to pay off the investors?

Maybe avoid issues with non-competes or claims of "stolen" IP later.

Or maybe, if the founders negotiated a deal for the team to stay together an investor might argue that that they are acting against the best interest of the company and might try to hold them liable for that.

Well, in a free market the possibility of a big player to poach the core of a company would be priced in by the investor. I'd expect to see a lot less equity and a lot more debt-like VC deals at vastly lower valuations.

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