In the SmartUp curriculum, Yonatan Stern describes an acqui-hire as a situation where buyers “buy the company just for the team in it.” The primary motivation is not revenue, profitability, or unique technology, but the ability to immediately onboard a functioning group of employees without going through a long and complex hiring process.
The rationale behind an acqui-hire is efficiency. Instead of recruiting individuals one by one, the acquiring company purchases the startup and absorbs the entire team at once. Because the value lies in human capital rather than business assets, these transactions typically result in lower valuations compared to strategic acquisitions or IPOs. Stern notes that acqui-hire deals are often priced at only a few million dollars.
Within the broader context of Mergers and Acquisitions (M&A), an acqui-hire is distinct from other acquisition motivations. Some companies are acquired due to business success and profitability, others for specific technology or products, and some due to distress when the startup has run out of money. An acqui-hire specifically addresses a talent acquisition problem rather than a market or technology gap.
From the SmartUp perspective, acqui-hires can provide a soft landing for startups that did not achieve large-scale success. However, SmartUp also emphasizes that many acquisitions, including acqui-hires, are completed without public disclosure of deal values. This opacity can hide whether the exit created real financial returns for founders and investors or simply facilitated the transfer of the team to a new employer.
