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Anthemos Georgiades, the CEO of San Francisco startup Zumper, consoled a friend and fellow entrepreneur visiting from New York two weeks ago. The company his friend had spent three years building was being acquired. It wasn’t a cash-out or a glorious exit. And it was far, far from the magical $1 billion valuation that grants a startup “unicorn” status.
The deal was a lifeboat — one known as an “acqui-hire,” where a larger company pays a small amount to grab a startup’s employees.
The New York startup, which had been living off its seed funding, couldn’t raise its first round of venture capital, despite having what Georgiades’ friend believed was a significant growth opportunity. A few years ago, evidence that its product was catching on would have been enough. Now, investors wanted to know how he would get profitable.