Foley & Lardner LLP Partner Louis Lehot is quoted in the Law360 article, “As Crypto Winter Spurs Deals, Attys Caution: ‘Buyer Beware,” discussing cryptocurrencies’ price volatility and its role in shaping acquisition and funding deals during “crypto winter.”
One way investors can mitigate crypto’s risks is to hire a struggling company’s team instead of acquiring the business outright.
“We’re seeing people look at ‘acqui-hires,’ where there’s no consideration changing hands; you’re just hiring the team and taking over some minimal amount of [intellectual property],” said Lehot. “We’ve seen a number of scenarios where this is happening, and I’ve also seen scenarios where [a deal] started out as an acquisition of the business but turned into just the people on the team.”
Lehot added, “It’s a great time to buy if you have capital. The problem is nobody has capital, except the new, large [venture capital] investors who have raised these big funds. But they don’t want to catch a falling knife.”