# What is Acquisition? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Exit  
> **Canonical Citation:** [https://spidits.com/startup-glossary/acquisition](https://spidits.com/startup-glossary/acquisition)

## Definition
An Acquisition occurs when a larger corporation purchases a startup, absorbing its assets, technology, talent, and customer base.

## Architectural Mechanics & Deep Dive
An Acquisition occurs when a larger corporation purchases a startup, absorbing its assets, technology, talent, and customer base. Acquisitions are the most common exit route for startups, providing immediate liquidity for investors and founders. Acquisitions can be structured as stock purchases, asset purchases, or mergers, with payouts in cash, stock of the acquiring company, or a combination.

## Industry Applications & Real-World Use Cases
Corporate exit strategies and business consolidations

## Frequently Asked Questions

### What is an acqui-hire?
An acquisition focused primarily on securing the startup's core engineering and product talent rather than its operational business.

### How are acquisitions paid out?
Typically via cash, shares of the acquiring public company, or an earn-out structure based on post-acquisition milestones.

## Related Terminology
- [exit](https://spidits.com/startup-glossary/exit)
- [ipo](https://spidits.com/startup-glossary/ipo)
- [drag-along-rights](https://spidits.com/startup-glossary/drag-along-rights)

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*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*