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Comment by gaelenh | Hacker News Reader

Tip to engineers new to the startup world: If the startup you work for has any success or traction, but runs out of money, you will be sold off as a team like cattle. When startups shutdown, all assets -- servers, client contracts, software, furniture, and teams -- will be sold off to recoup losses. You won't have much say in it and it kind of sucks.

In fairness to the CEO's that broker these deals, they are probably trying to make sure that their workers land on their feet. But it still sucks to realize you and your friends are considered saleable assets.

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> sold off as a team like cattle

I'm not sure I can recall the last time cattle were sold off as a team because their abilities were respected; perhaps the closest team of domesticated animals we can find changing hands between companies would be the Budweiser Clydesdales, from wherever they came from; even this example is strained. Nay (neigh?), engineers should take pride in being acquired - you suddenly have a whole new world of resources and collaborators opened up to you, even if you end up having to pivot the original concept, and you have the best of both worlds in terms of having a group of people to enter a company with, and being able to talk about your achievements at the previous engagement. And if you were in a startup to begin with, did you expect that you wouldn't pivot ever?

You and your friends aren't saleable assets, you're the company. And that's something to take pride in.

Well, if you are an employee of an acquired startup, you always have the option of leaving. The acquirer will try to make sure that between unvested equity and retention packages you have enough incentive to stay, but it's really your choice.

And this is why I just don't get this aqui-hire craze. You can buy the founders, sure, but unless an employee has equity or you throw some real cash at them why would a rank and file employee stay? If I wanted to work at XYZ corp (especially if XYZ corp is big enough to acquire the startup), then I would have sent a resume to XYZ corp in the first place.

What a company is buying in an acqui-hire is not just individual capability, but also team chemistry and cohesion. The team has proven that it can work together effectively to ship a great product. They're acquired (and given appropriate salaries + retention packages) to do the same for the acquirer.

That's certainly one version of what can happen. Another version is that none of the equity transfers to the new company. The acquiring company will offer you a modest boost in salary and similar new stock options. If you don't take the offer because they're low balling you or you don't like the new company, your old company will terminate you at the end of the week without any severance. Or the new company will offer everyone on the team 3 months consulting contracts. Either way, better start familiarizing yourself with COBRA.

Employees in the acquired company are put under heavy pressure to take whatever deal is offered. Who wouldn't want to keep working with their friends? The CEO's/senior team will keep the employees out of the loop so that rank-and-file don't move first and take any negotiating power away from the CEO.

Not every acqui-hire is a payoff for the employees in the acquired company. It can also be a face-saving gesture when money runs out to make a shutdown look semi-successful for the founders.

And you will get tired of deleting all the job offers and "let's have coffee and talk about my startup" mails for the next few days until you find something new.

Truly, having your company fail is a horrible thing, at least in Silicon Valley right now. :)

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