The HALO Effect - kwokchain
Briefly

A new deal structure is emerging in AI, named HALO deals, which combines elements of hiring and licensing while avoiding full acquisition. Companies like Inflection and Character AI hire core teams from startups alongside securing non-exclusive licenses to their intellectual property. Startups receive substantial licensing fees as dividends for investors and employees, continuing operations under new leadership. HALO deals occur quickly, have significant financial implications, and are currently exclusive to the AI sector, yet remain poorly understood and unnamed.
A core team from the startup, usually including the founders and research team, are hired by a company in tandem with a non-exclusive license to the startup's IP being inked.
These deals share a few other common characteristics: they happen extremely quickly, have enormous price tags, and are only being used in AI (for now).
HALOs are a chimeric deal structure. Legally and logistically they are hiring. But to investors and employees of the startup they have the financial return of an acquisition.
Despite their scale, HALO deals remain poorly understood. They don’t even have a name.
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