Foley & Lardner LLP partner Louis Lehot discusses the evolving landscape of acqui-hire transactions in his Law.com article, “What an Acqui-Hire Looks Like for an AI Startup Today.”
“An acqui-hire used to be simple,” Lehot writes. “A big company bought a startup for its engineers, shelved the product, and moved on. AI has changed the playbook.”
In the article, he explains how AI has transformed traditional acqui-hires, with companies increasingly using structures such as “license-and-hire” arrangements to acquire talent and access technology without completing a full acquisition. He outlines the legal, tax, governance, and economic implications emphasizing that founders should carefully negotiate deal structure, investor protections, and employment terms to maximize value and preserve potential tax benefits.
“The flywheel of innovation requires acqui-hires to get done,” Lehot concludes. “Capital gets returned to investors, who while they didn’t make a home run, can at least reinvest the capital into another startup. And so it turns…”
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