Start-up careers in India: Are you being acqui-hired? Check out this new job trend

Talent is crucial for growth at any company. More so for a start-up where people are expected to indulge in multi-tasking, go beyond their regular selves and ideate, innovate and implement new strategies. Start-ups are now looking to fix this problem with the M&A mechanism. Thus, start-ups with (financial) resources are strategising to acquire smaller start-ups with an intention to add on to their talent pool and enter new markets. According to Sunil Goyal, founder, YourNest, which offers angel funding for start-ups, talent is multiple times critical in a start-up environment. “Start-up challenges are unique. The problem-solving requires courage, analysis and insights, multi-dimensional knowledge, on-the-spot decision-making abilities. A start-up team has to manage through ambiguity in the initial stages to survive and thrive.”

As per industry statistics, 2017 witnessed over 133 M&As in the tech start-up sector alone. Of these 133, 32% were mainly ‘’acqui-hires’’. Meanwhile, Abhishek Kothari, co-founder, FlexiLoans.com believes that talent is the core ingredient for any organisation. “And start-up typically find it very difficult to have good talent until they reach a certain size, have some brand presence and can afford to pay competitive salaries. Start-ups always need people. Our primary focus is to identify and convince driven individuals to join our mission.”

FlexiLoans, says Kothari, is solving a problem of digital lending with a potential of $300 bn and “we have a team of data scientists, engineers, credit specialists, subject matter experts who carry a razor sharp focus and a hunger to invent.” Experts say unlike other big companies, start-ups need people who are willing to go the extra mile, are excited to work with a belief in the mission and “this mind-set is hard to find and nurture.” And any misses in hiring could result in cash burns and also affect the culture of the organisation, says Shailendra Naidu, CEO, Obopay.

Thus, acqui-hiring is one of the key ways to join forces with like-minded talent, says Kothari, who believes that it is a partnership where both parties evaluate long-term compatibility, realise that both need each other to attain full potential and share similar fundamentals. “And bootstrapped start-ups is a ripe talent to be acqui-hired through M&As, as they have been through the finest management, entrepreneurial and leadership lessons,’’ says Goyal. He adds that in the YourNest portfolio, the start-up Golflan picked tech teams through acquisitions, while Smart Software Testing Solutions added two product lines with the acquisitions of teams.

Even FlexiLoans had recently acqui-hired a platform called CreditPeriod to ‘’accelerate our presence in the under-served supply chain financing space in India and have a great team join us to build that business,” says Kothari. However, acqui-hiring cannot be the de facto mode of acquiring talent, say experts. Naidu says talent crunch has more to do with finding the right talent irrespective of the size of the start-up. “While acqui-hiring might help bridge the gap, the bigger challenge would be aligning the employees brought in as a result of the M&A to the existing start-ups’s culture.” What are the ways in which acqui-hired talent can be integrated into a start-up’s core culture?

It is important to use the acqui-hired talent for their strengths and allow them to be in the driving seat, says Kothari. “It is necessary to remember that the employees of the other company had joined them because they believed in their vision and if they do not associate with a vision in the new company, they could leave. That would defeat the entire purpose of the acqui-hiring.” At FlexiLoans, Venkatesh Viswanathan, co-founder of CreditPeriod (which they acqui-hired), heads the supply chain business.

So agrees Naidu who feels that utmost care should be taken while identifying talent from the acquired company. “Most important is to understand the mind-set of the middle level executives who guide and align the next level of talent in the company.”

Priyanka Golikeri, DNA Money