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I'm assuming Google doesn't need any of the company's business, and that it is being acquired for its talent. So, my real question: how much, on average, does
by kchoudhu 10y ago
I'm assuming Google doesn't need any of the company's business, and that it is being acquired for its talent.
So, my real question: how much, on average, does a founder get as part of one of these acquihires? And does s/he actually, y'know, have to do any work after getting paid?
- hackthisbird 10y agoThe buyer typically pays $1M per engineer they keep. What the founders get depends on how much they were diluted by funding rounds.
- kchoudhu 10y agoWhat do the founders typically do within the acquiring corp after the acquisition? Do they have any agency? Or are they just another set of middle managers for the meat grinder?
- jaxomlotus 10y agoIt's unusual for an acquihire to have real agency in a big company. It's usually the middle management route - or worse - the limbo of having nothing real to do like the parody scenario in the Silicon Valley tv show.
- kchoudhu 10y agoSounds kinda hellish, honestly.
- dsp1234 10y agoIt certainly can be. However, if it's a 'golden handcuffs' situation a 'guaranteed' vest of several million dollars for a 3-5 year commitment is something that I would certainly be willing to take.
- kchoudhu 10y agoIs there a difference in the treatment/terms afforded a founder vs. those presented to a line employee at the acquired company? Or is every case handled differently?
- developer2 10y agoI think that's the point. Sometimes the acquiring company is hoping you'll get bored or fed up and walk out before you can vest. Why would they keep you productive which only serves to sustain your incentive to earn a couple million, when they can instead pay only a salary and hope you give up before your years are up? I hate the definition of "acquihiring", which seems to have been written by a PR firm. It's made out to sound like an altruistic process that magically overrides the business's normal strategy where all that matters is the bottom line and bowing to investors / board members. The reality is that when acquihired, you've entered a new company with its own culture, underhanded and ruthless politics, and ulterior motives. There is very little truly irreplaceable talent worth paying millions for. What an acquihire is really saying is "We need your help to transition this product into our company's structure. We can't do this in only 2 weeks, so we'll say now that you will be with us for years. Secretly we hope you leave shortly after the difficult transition is completed, but before we have to pay you". If any business out there acquihires to the spirit of the definition, thanks for being of a rare species.
- Stratoscope 10y agoI was at a startup 15 years ago where the "nothing real to do" scenario played out to the letter. They were bought by Gemstar-TV Guide, who moved the team to their office and then apparently forgot they'd bought the company. Our team pretty much had no duties other than showing up to "work". No one got shiny golden handcuffs, but they did get their salaries paid for a year. Eventually someone from HQ figured this out and everyone got the boot. I was the lone holdout. Instead of moving with the team, I'd gotten a nice offer from Adobe and decided to run with it. The good news was that my job lasted for more than a year. The bad news was that I actually had to work.
- deleted 10y ago[deleted]
- hkmurakami 10y agoIt's called "Vest in Peace" for a reason. Your soul dies just a little bit (or a lot) while watching the clock.
- huac 10y agorest and vest!
- w1ntermute 10y agoGetting paid for a pulse!
- guelo 10y agoFrom my admittedly limited experience, they try to fight the good fight for a little while before being defeated by the corporate bureaucracy and then sit around waiting for their vesting to end.
- FireBeyond 10y agoWrite a letter to their customers that will get posted to https://ourincrediblejourney.tumblr.com https://ourincrediblejourney.tumblr.com shortly thereafter...
- tdullien 10y agoI spent a few years driving the integration of "our" technology inside Google. So yeah, there is agency.
- BatFastard 10y agoFor AI engineers is 10M per engineer. http://www.recode.net/2016/9/17/12943214/sebastian-thrun-self-driving-talent-pool http://www.recode.net/2016/9/17/12943214/sebastian-thrun-sel...
- inputcoffee 10y agoAre you guys distinguishing between what the buyer pays and what the engineer gets? To put it another way: if you personally promised the engineer $5 million (vesting over 3 years) they may switch. This means the buyer must see some value in the company over and above the engineers. (IP? Customers?)
- mljoe 10y agoThe engineers are not getting that obviously, it depends on how much equity they have and the difference between the amount of VC money pumped into a company and the final sale price of the company. VCs often get 2x preferred stock (at the minimum - it entitles them to 2x what they invested). This is before anyone else is allowed to see a dime. Every term sheet is different of course.
- ThrustVectoring 10y agoThe value of the team is also larger than the individual engineers on it. Plus, a package bid is less risky if you're looking to get the entire package. Oh, and poaching has another risk - that you get only the worst employees.
- gdulli 10y agoWhen this happens to product X I feel an instinct of commiseration for the users of product X.
- kchoudhu 10y agoUsers honestly should know better by now.
- grrowl 10y ago...should know better than to use products and services online? Your comment is as toxic as the acquihire culture itself, and only makes users feel less "part of the internet" when companies treat them as disposable.
- cocktailpeanuts 10y agoNot toxic at all. It's a very accurate comment. Having been in numerous situations like this, I actually now "know better" than to rely on some 3rd party API that's not easily portable. That's probably why most startups that provide infrastructure as a service are built on open source (using open standards) from day one. Otherwise good luck getting any traction
- prodigal_erik 10y agoShould know better than to rely on and pay for a service without some kind of assurance that it won't simply be switched off with little warning. Maybe expect a bond big enough to keep the service running in its current form for N years? It's better for potential users to be aware of how often this happens, than go on in ignorance of it.
- hkmurakami 10y agoIt's a cynical comment, but one that (sadly) may serve users well. It's like the "assume your equity is worth zero" heuristic that many of us (including myself) employ when advising friends. It's not strictly accurate, and if taken truly literally it may poison the well for the startup ecosystem, but following this heuristic would prevent painful events for many employees.
- mbesto 10y ago> And does s/he actually, y'know, have to do any work after getting paid? Yes, they're called "golden handcuffs". You basically get a compensation package so good that it'd be stupid to leave. Usually they try to get you to stay 3-5 but YMMV.
- shostack 10y agoAnd what of the ones that don't get brought on? Do they get anything for their equity typically? For key employees i can see them sticking around, but early hire support staff that may not be needed could still have considerable equity.
- kchoudhu 10y agoIf the founders have done their job correctly, it sounds like shotgun agreements will cause the unacquired employees' equity to vest immediately.
- kevinastone 10y agoMost startups use double trigger acceleration for vesting. The first trigger was the acquisition and the second was the termination (not offered a position). So they would vest their entire equity grant. Of course that implies that the equity is worth anything. Most acquihires are at low multiples so the VCs tend to take the entire price, leaving founders and employees with nothing.
- mljoe 10y agoEven in low multiples typically the VCs creates a decent incentive for the founders to stay at the acquired company (otherwise the acquihire will fail), but they aren't getting filthy rich.
- nihonde 10y agoI like to get a right of first refusal for cofounder share sales so I can block low valuations in an acquihire where you're not getting hired.
- 10y ago
- matchagaucho 10y agoDepends on whether it is an all cash, all stock, or mixed deal. Typically a "shotgun" clause is triggered and all employees immediately vest and cash out. Founders, however, negotiate "earn out" clauses with the acquirer, which provides some upfront cash with the balance to be paid out over time, contingent on performance or retention goals.
- WalterSear 10y agohttps://www.quora.com/What-is-the-difference-between-single-trigger-and-double-trigger-acceleration-of-vesting-in-connection-with-a-merger-acquisition-or-other-change-of-control https://www.quora.com/What-is-the-difference-between-single-...
- _pius 10y agoI'm assuming Google doesn't need any of the company's business, and that it is being acquired for its talent. I wouldn't assume that. Developer-friendly natural language APIs will only become more important over the next few years.
- hiou 10y agoHow's firebase going these days? Edit: I should add Firebase could have(and should have) been the next PHP/Access. Could have solved almost every SMB business custom software need in a way that a business could go from front-end to front-end and never get locked into another 1,000 crud app for XYZ vertical. Could have wiped it all out. Firebase could have become the data store of the internet. Then Google showed up....
- ben_jones 10y agoFirebase uses a non-relational database correct? Shouldn't they then run into issues with problems that do not lend well to non-relational databases? I don't see how Firebase could have been anywhere near as pervasive as PHP.
- _pius 10y agoHow's firebase going these days? Given that Firebase seems to have become the foundation of Google's mobile app development offering I'm guessing ... pretty well? ¯\_(ツ)_/¯
- ginger_beer_m 10y agoMy question is why would someone want to send their data to some api on the cloud rather than processing it locally himself using the numerous open source packages available to do this sort of thing?
- michaelt 10y agoFor a lot of things, using a self-hosted open-source package is a good idea, absolutely. However, for some applications there's a vendor with a neural network (or whatever) trained on a billion inputs, you see it perform better than the open source equivalent trained on a million inputs, and you don't have a billion inputs to improve the open source version with.
- pinewurst 10y agoAren't Google acquihire offers conditional on passing the usual Google employee screening process? I ask this not to be negative, but out of serious curiosity. Say your employer is bought by Google - are you axed because you slept poorly and couldn't prove Fermat's Last Theorem on the whiteboard in 15 minutes?
- ModernMech 10y agoI don't know about Google, but I've heard of this happening during other acquisitions. A friend of mine with a Ph.D. in CS worked at a startup that was just acquired. He was responsible for the a lot of the tech in the platform they were acquiring, yet since he didn't pass their algorithms heavy interview they didn't want to hire him. He ended up working for one of the other companies interested in buying the startup.
- luke_s 10y agoActually, I'm not so sure its a acquihire. Google has very recently announced a bunch of cloud machine learning products: https://cloud.google.com/products/machine-learning/ https://cloud.google.com/products/machine-learning/ * Cloud Vision API - Upload an image, and it will tell you what is in it * Cloud Speech API - Upload a wav and it will transcribe it * Natural Language API - Parse sentences, extracts entities, sentiment and syntax * Cloud Translate API - Translate from one language to another. Api.ai would make a great bullet point to add to the end of that list!
- visarga 10y agoFrom what I know, Google's NLP service does not include intent extraction. Intent extraction is essential for voice command interfaces, such as those in Siri and Google Now. But I don't see why they would need to buy a startup for that, when they can do it themselves even better.