Startup Acquisition

A startup is acquired for multiple reasons -

1. The startup might be competiting with the big company. Though this kind of acquisition is not seen very often.
2. The startup might be complimentary to the business of big company. eBay acquiring PayPal and Cisco acquiring Linksys are examples of this.
3. A tech startup may be acquired for its technology. The technology must be hard to replicate either because of time, money or resource limitations.
4. The startup might offer the opportunity to enter a new market. The new market could be a new geographical location or it could be a new space altogether. For example, Fox acquiring MySpace allowed Fox to enter social networking space. However, Monster acquiring JobsAhead was to enter new geographical location.
5. The startup might offer the resources/working-setup that's hard to replicate. Sometimes, the companies are bought for the team.

While pitching for an acquisition, the startup needs to evaluate these criteria. Based on these criteria, the startup team can assess which company might give them maximum value.