Four Buyer Categories

A framework for understanding the different types of companies that might acquire your startup and how to approach them strategically.

Four Types of Company Buyers

• Unicorns

  • High growth companies
  • Looking to accelerate their growth through acquisition
  • Want to maintain momentum and expand capabilities

• Dying Dinosaurs

  • Incumbent companies needing revitalization
  • Looking for fresh blood, tech, and energy
  • Need new cash flow streams
  • Want to stay relevant in changing markets

• Adjacent Alligators

  • Peers or competitors in related spaces
  • Potential for merger opportunities
  • Looking for synergistic combinations (1+1=3)
  • May want to reduce competition or expand market share

• Talent Farms

  • Companies primarily interested in acquiring talent
  • Example: Google acquiring for engineering teams
  • Don't care about your company or market
  • See acquisition as cheaper than recruiting individually
  • Want proven teams that work well together

Strategic Reasons Companies Buy

• CEO Interest/Pet Projects

  • Personal interest from CEO can drive acquisitions
  • Often leads to faster decision making

• Executive Signaling

  • New executives wanting to make big moves
  • Acquisitions as proof of leadership
  • Signal of strategic direction

• Competitive Pressure

  • Trying to catch up to surging competitors
  • Defensive acquisitions to protect market position
  • Example: Adobe buying Figma

• Strategic Synergies

  • 1+1=3 opportunities
  • Merging to create monopolistic advantages
  • Example: Uber merging with Didi in China

• Fear-Based Acquisitions

  • Companies afraid of your growth
  • Example: Facebook buying Instagram
  • Willing to pay strategic premium

• Talent Acquisition

  • Acquiring specialized talent en masse
  • More efficient than individual recruiting
  • Focus on unique skill sets (e.g., computer vision PhDs)