Why acquisition matters to a first-time founder
An acquisition can cover an entire company, one part of a business or selected assets such as code, contracts or a trademark. It can give a buyer customers, technology, talent or market access faster than building them. For a founder, it may offer a way to sell the company or grow it.
Examples of acquisition
A software company pays $400,000 for another business’s customer contracts, code and trademark but does not buy the company that owns them. That is an asset acquisition. Buying all the company’s shares would transfer the legal company, including its assets and debts, subject to the deal terms.
Common misunderstanding
An acquisition does not always mean buying a whole company. An asset acquisition transfers only the assets or rights named in the deal, while a share acquisition transfers ownership of the legal company. The price may also include shares, later payments or payments that depend on future events, not only cash paid at closing.
When to use it
Use the term when a buyer purchases a company, part of a business or selected assets. State exactly what the buyer will own. Before signing, examine the price, funding, tax, employees, intellectual property, debts and required approvals. Both sides should get relevant legal, tax and accounting advice.