The article doesn't mention one of the most important reasons companies do HR acquisitions: competition forces them to. If company A offers to acquire a startup and company B merely offers to hire the founders, all other things being equal the founders will take company A's offer.
The article raises an interesting question on tax practices regarding aqui-hires. If the IRS does decide that such gains should be treated as ordinary income, will investors still be able to "save face" when, legally speaking, they can't even call it an acquisition?
> Not only because suing an entrepreneur can cause major reputational damage, but also because the entrepreneur still has the right (in California) to just up and leave<p>Because clearly the world would be a better place if financial agreements were more like indentured servitude.
How does this work from an employee point of view? Are they compensated in the buyout? Do they get to do any negotiation with their new employer? The cynic in me thinks this could easily be a raw deal for non-owners.
The reason they do acqui-hires is to bail the VC out. The same VC sits on the board of the aquiring company.<p>And we all know what happens when you try to hire away employees due to no-poach collusion, the hirer get's fired after Steve Jobs's email.