Although, talent is important for any industry, for startups, it bears a special significance. In a startup, the people are people are expected to indulge in multi-tasking, go beyond their regular selves and ideate, innovate and implement new strategies.
Startups intend to deal with this problem through mergers and acquisitions. Thus, startups with (financial) resources are strategising to acquire smaller startups with an intention to add on to their talent pool and enter new markets.
As per industry statistics, 2017 witnessed over 133 M&As in the tech start-up sector alone. Of these 133, 32% were mainly “acqui-hires”.
What is Acqui-hiring?
Acqui-hiring is one of the key ways to join forces with like-minded talent. It is a partnership where both parties evaluate long-term compatibility, realise that both need each other to attain full potential and share similar fundamentals. Bootstrapped startups are a ripe talent to be acqui-hired through M&As, as they have been through the finest management, entrepreneurial and leadership lessons, experts feel.
Why acqui-hiring?
Sunil Goyal, founder, YourNest, opined that talent is multiple times critical in a startup environment.
“Start-up challenges are unique. The problem-solving requires courage, analysis and insights, multi-dimensional knowledge, on-the-spot decision-making abilities. A start-up team has to manage through ambiguity in the initial stages to survive and thrive,”
he said.
Abhishek Kothari, co-founder, FlexiLoans.com believes that talent is the core ingredient in any organisation.
“And start-up typically find it very difficult to have good talent until they reach a certain size, have some brand presence and can afford to pay competitive salaries. Start-ups always need people. Our primary focus is to identify and convince driven individuals to join our mission,”
he explained.
Startups need people who are willing to go the extra mile, are excited to work with a belief in the mission and this mind-set is hard to find and nurture. Therefore, if one misses the right opportunity in hiring, it could lead to cash burns and also affect the culture of the organisation, according to Shailendra Naidu, CEO, Obopay.
Goyal pointed out that in the YourNest portfolio, the startup Golflan picked tech teams through acquisitions, while Smart Software Testing Solutions added two product lines with the acquisitions of teams.
FlexiLoans too acqui-hired a platform called CreditPeriod to accelerate their presence in the underserved supply chain financing space in India.
The process of acqui-hiring helps a company in getting the right set of employees with lesser efforts and expenditure of money.
How to make the best out of acqui-hiring?
While acqui-hiring might help bridge the gap, it is essential to align the employees brought in as a result of the M&A to the existing startups’s culture. What are the ways in which acqui-hired talent can be integrated into a start-up’s core culture?
It is important to use the acqui-hired talent for their strengths and allow them to be in the driving seat.
It is important to understand that the employees of the other company had joined the larger company because they believed in their vision and if they do not associate with a vision in the new company, they could leave. That would defeat the entire purpose of the acqui-hiring.
At FlexiLoans, Venkatesh Viswanathan, co-founder of CreditPeriod (which they acqui-hired), heads the supply chain business.
Naidu too has the same notion.
He said,
“Most important is to understand the mindset of the middle level executives who guide and align the next level of talent in the company.”
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