from Fred Wilson:<\/p>\n
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:<\/p>\n
1) figure out how much equity in options it would cost you to hire the team<\/p>\n
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.<\/p>\n
3) value that equity at what your company would be able to sell for right now<\/p>\n
4) pay off the investors in the company in cash if you can<\/p>\n
5) make the stock you are paying the team vest over the same period that your employees stock vests<\/p>\n
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.<\/p>\n
via The HR Acquisition<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" 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 … Continue reading Key points in an HR Acquisition<\/span>