Chapter 32Key Employee Interviews
As part of the technical due diligence, the acquirer may ask to interview a few of your key employees, and in the extreme case, your entire roster. This is very common for acquihire scenarios as the acquiring company does not place any value on your existing set of products or technology, but solely cares about whether the team makes the cut in the technical interviews, which is a proxy for whether the team would be able to deliver on executing the planned product or feature post acquisition.
The level rigor of the technical interview is inversely proportional to how strategic the acquisition is. If the acquisition is a straight-up strategic buy, then the interview with the team will almost shift primarily to a cultural interview with no technical vetting. This is because the acquirer in this case typically wants to keep the product and strategy intact, and does not want to rock the boat in terms of letting technical personnel focus on the execution.
Most of the times the interviews are done after the term sheet is signed or at least terms are agreed verbally in principle. If the acquire pushes for interviews, this is a great leverage to push for a term sheet. By getting the team to interview with the acquirer, you end up implicitly informing the whole company that a M&A is in progress. This is risky for morale, so you want to avoid that. If anything, limit the exposure to only a handful of key employees, and do the full company interview only after the term sheet is signed.
So let's break down the two aspects of the interview into technical and cultural below:
1. Technical
Depending on the leveling guideline of your company, the acquiring company would try to map the leveling of your PEDs (product managers, engineers, and designers) to their internal levels. In doing so, they would either have a full fledge interview like the one you would get if you are interviewing for a Google or Meta for the respective levels when it is an acquihire, or a watered-down version where they ensure that everyone is properly pegged and there are no red flags in the technical interviews.
Technical interviews are very different compared to day-to-day tasks, so it is important to take them seriously and get your key employees to prepare them well-in-advance. Do mock interviews with them where they need to whiteboard, code or design things from scratch. Sometimes people do fail these interviews, and it could have dire consequences at this stage of the process. Enough of your key engineers couldn't code in real time for acquihire interviews, there will be no deal.
2. Cultural
For the cultural interviews, the acquirer cares mostly about whether the seller's employees are culturally good fit post acquisition and if they are motivated to join the acquiring company. Some employees only like to work in a small company environment and have no desire of working for a big corporation. Your job is to make sure you prepare these folks and make sure there are no surprises during the actual interview.