alt Hacker NewsSo is the business model of these projects - 1. build a popular dev tool 2. aquire funding 3. hire great talent 4. pray for an aqui-hire that justifies the initial funding amount
I wonder how the initial investors feel about the aqui-hire path... Must be a pretty nice sum for them to agree to it, or they saw that the path to any revenue was near impossible/non-existant
Replies
> Must be a pretty nice sum for them to agree to it
Not necessarily: if the investors don't agree to a reasonable amount, the wanna-be acquirer will simply hire the entire team with generous sign-on bonuses, and the investors will be left with a shell of a company.
In this case, the core product is MIT-licensed, the team can quit on a Friday and pick up exactly where they left off under a new org on Monday.
My guess is investors are getting a good return on investment so they are probably pretty happy.
I mean, the alternative is a whole bunch of BS dealing with funding, global compliance and sales, public markets, etc.
It's more fun to just build the fun bits, get acquired, walk away with a lot of money, and start over again doing the fun bits (if you want to keep working).
Acquisition happen for 3 reasons.
1. Product 2. Talent 3. Business/growth
In the AI era, some of acquisition happening in the space is for talent and product.
In this case, it looks like it was that. Vite is a great product they were able to build a great team.
You would be surprised how much of a premium companies can pay for talent.
> So is the business model of these projects - 1. build a popular dev tool 2. aquire funding 3. hire great talent 4. pray for an aqui-hire that justifies the initial funding amount
Indeed, so as a library/framework/engine/runtime user, for the last decade or so, I've basically avoided anything that touched VC-investments, as eventually the tool will either degrade, get too expensive or straight up disappear, and I got so tired of having to refactor and move stuff around just because new owner did something shitty.
In many cases the acquiring company shares investors or board members with the acqui-hired entity.
To put it neutrally, VC partners are treating these are parts of their same portfolios, so if one team doesn't pan out on its own, it can be merged into another with somewhat similar overall goals or markets.
To put it more pointedly, it's perhaps all about who one knows and making sure that everyone gets to tell a story of successful exits.