Here’s a great hiring strategy: Buy companies. But don’t pay for the company. Just buy the company for free. Here’s how it works.

The best kind of people to hire for a small business are self-starters. The type who are curious, motivated, don’t do anything halfway. These are the people who give everything to their work because they know their work will give a lot back in return.

Unfortunately, these are also the people who start companies. They don’t really want to work for someone else. These are the people who have huge amounts of energy and lots of crazy ideas and they need a place to channel those ideas. So they start companies.

Sometimes these are people are simply too crazy. They cannot manage themselves well enough to actually get anything done. Buthere’s a great articlein The New York Times that explains why the best entrepreneurs are just a little bit crazy. They are just on the manageable side of crazy.

The VCs love those types of people and you probably do, too. They are fun to work with, but impossible to find. But you can find them when they are trying to sell their company.

My favorite VC-slash-blogger isJames Altucher, and heexplainsthat everyone is always trying to sell their company. Which I think is true. But there are some entrepreneurs who are more desperate. There is a time in the life of a startup when the entrepreneur has given it their all and they are, simply put, sick of the company. It’s not that the company is a failure, per se, but it’s that the entrepreneur doesn’t want to work on the company anymore. The company is worth something, but not a lot, and there are not really any buyers. This situation happens a lot.

And the entrepreneur can afford to just shut down the company, but the problem is that the entrepreneur needs an exit in order to get funding next time. Of course there will be a next time. Real entrepreneurs have tons of ideas. But it becomes more and more difficult to raise money the more businesses you have started and not exited from.

So you are actually doing an entrepreneur a favor by offering to buy his business in the form of a very small payout and the promise of a steady job.

The small payout is not about the money; it’s about the entrepreneur’s ability to say, next time he’s raising money, “Yes, I exited from my last company. It was a small exit, but XX bought the company.” A small exit is a billion times better than no exit. It shows that the entrepreneur created value.

You give the entrepreneur the ability to say that in exchange for the entrepreneur working for you for a short time. Say, a year. That’s a reasonable amount of time because it’s the time the entrepreneur needs to recharge himself and get ready for the next company. In the meantime, you have a rockstar on your team, building something for you in a way that only a self-starter, crazy-maybe, entrepreneur can do.

And, side benefit: This is a great way to build a really tight network for yourself. In aninterview, Saras Sarasvathy, of the Darden school of Business, discussed the traits that make someone asuccessful entrepreneur. In her research, she found that all personality types can be successful with the following caveat: they have to be good at building a network around themselves in order to compensate for their weaknesses. So as your company grows with the help of other entrepreneurial types, you are also growing your circle of high-performers who can help you in the future.

Article courtesy of Open Forum

About Penelope Trunk

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