from Fred Wilson:

When you do a HR acquisition, you are going to pay a premium over what the team would cost if you hired them. And sometimes that premium can be significant. Here's how I like to think about it:

1) figure out how much equity in options it would cost you to hire the team

2) figure out how much of a premium over that number you will pay to get them in one fell swoop, a pre-built team that has shown it can work well together. I've seen premiums of 100% and I've even seen a few that are higher than that.

3) value that equity at what your company would be able to sell for right now

4) pay off the investors in the company in cash if you can

5) make the stock you are paying the team vest over the same period that your employees stock vests

6) no matter what you do, you must make sure the team is incented to stay for a three or four year period. if you can't do that, you shouldn't do the deal.

via The HR Acquisition.