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If you are new to the startup world, you’ve probably not heard of acqui-hiring, that is where a big company acquires a startup not for it’s product or service, but for that one prized employee within the startup. As the fight for talent gets ugly, big companies with money to spare are acquiring startups solely for the purpose of securing prized talent. The talent shortage is especially acute in the artificial intelligence field. Picture for instance the boardroom wars that saw OpenAI CEO Sam Altman get kicked out of the company, only for employees to protest until he was reinstated back. As we fight for talent, acqui-hiring is going to be a more mainstream form of hiring talent. Usually the environment within a startup is so surreal that poaching an employee from a startup is usually a hard nut to crack.

Startups offer a favorable working environment for a lot of employees. One the founder CEO and the employees all sit in the same factory floor. The channel of communication is linear. When there are problems to be sorted out, it is the founder that solves it, and any unresolved issues are handled at an instant. The founder is usually the one that goes through the resumes of those to handle, and so he personally has vouched for the employees that work for him. He thus knows the intricate strengths and weaknesses of the employees, and that kind of bubbly environment is fostered day in day out. Let’s not forget that in most startups, apart from the salary, progressive founders often offer stock options and so that means that if the startup does get big and successful, employees have a chance to be millionaires when the company gets of age.

Compare that to working in a big company where the CEO sits so far away from the factory floor. There are no employee share ownership schemes as the company is already mature. Legendary Facebook investor Mark Anderseen has often advocated for acqui-hiring. Remember, he is the one who discovered Facebook and signed a cheque of $500,000 to Mark Zuckerberg and told him that the company was heading to a billion dollar valuation. Well, it’s 700 times that right now, it’s worth $700 billion dollars, making Mark Zuckerberg surpass Elon Musk as the fourth richest man in the world at $186 billion dollars. It’s really people like Mark Anderseen that have promoted the concept of acqui-hiring and it will be something a lot of big companies pursue in order to get that prized employee. So, in hindsight, a lot of big companies will be going for startups to kill that product of the startup, and then to acquire the employees and make them make other products for the company.