Tough questions to answer for someone on the outside.
> Is there any likelihood of an acquirer being interested in purchasing the product but not its developers?
At the very least you will be expected to stick around for documentation and gradual hand-over. This may well be the only card in your hand during a negotiation, or it may not be, depending on the circumstances and your relationship to the people transacting the acquisition.
I have to point out though your assumption is that the product is the key asset a buyer will be interested in. Is this the intention of the founders as well? Because counter-intuitive as it may seem, the new company might be more interested in the people who sold this product than the thing itself. Do what you can to find out more.
> Assuming I do stick it out as an acquihire, what's the likelihood I'd be allowed to remain in charge of my product vs having to execute on someone else's vision?
That depends totally on your relationship with your new employer and the structure and politics of the new company. Best case, you'll move up the ladder there. Worst case, they want to get rid of you as soon as possible. Average case: in a year they regret the acquisition, because they realized they'll never make back the money they paid for it. If you do like it there, it might make sense to move onto a more important product in their core portfolio before the acquisition hangover hits them.
> how do I best stand up for my own interests here, without being the asshole that ruins the deal for everyone?
Be friendly, exude an aura of confidence and competence, but don't be a roadblock. Find out what the decision makers want (first at your current company, then at the new one) and help them achieve their goals. The risk is still you'll be left at the side of the road, but then again, that's always a risk.
> I have to point out though your assumption is that the product is the key asset a buyer will be interested in. Is this the intention of the founders as well? Because counter-intuitive as it may seem, the new company might be more interested in the people who sold this product than the thing itself
This is a really good point, which I'm having a difficult time answering without going into more detail than I'm comfortable revealing even with a throwaway account.... Let me put it this way: I believe the tech staff, while skilled and a great team, is probably too small to be worth acquiring for its own sake -- (But maybe I'm wrong about that? It's 3 guys, one of whom is a long-term contractor rather than FTE) -- and the non-tech staff (including the co-founders) is, um, I'll just say not a likely acquisition target IMO.
3-5 people sounds like a pretty normal acquihire. If it's a distressed sale, I doubt the buyer is going to care much about IP. It's going to be all about hiring a functional team. The product is just proof that you guys are functional.
I have trouble understanding why a buyer would waste time and money negotiating the acquisition of a liquidating business if the only valuable portion of the company is 2 engineers. That's what recruiters are for.
It's somewhat confounding but the simplest way to think of it is that's it's a really expensive recruiting play - it's positioned as an acquisition because:
1. There's real value to calling it an acquisition, to both the buyer and seller, though mostly to the founding team who can now claim they were "acquired" which is better than saying "I got shut down and got a new job somewhat related to the company I started." Buyer can also tout themselves as "consolidators" within an industry.
2. Usually, deals like this no more than $100K in additional cash will get pushed to founders and/or key employees each, which seems like a lot but assuming the founders and key employees are deemed REALLY good engineers, paying a recruiter for them could be upwards of $20K each, and if you treat the rest as a bonus it's not more than say, how much a 3rd year investment banker gets as a bonus, so it's expensive but not outrageous.
3. Investors want to say they have an "exit." The really confounding thing is why the investors would or should get any $$, though they often do. I understand the reasons (founders want to treat them well, the VCs may threaten a lawsuit if they are not), but it still seems pretty weird and unnecessary. I think it mostly has to do with companies having too much $$ and stock valued too highly =)
> The really confounding thing is why the investors would or should get any $$
Because they invested in the company and company was purchased? I don't understand why you'd think for a moment that investors wouldn't get any money from the sale of an asset they helped created.
if they are selling the product, yes, you're right. But if it's a true acquihire (which I was assuming..) and they are going to shut down the product and dump the IP, then it's basically just a really expensive hire no? In all the ones I've seen the real reason is (1) companies are willing to overpay and don't care who the $$ goes to and (2) founders really want to do right by their VCs. But I've also seen plenty of times where the founders can just tell the investors: "look, it's either we shut down or I take this job, but you get nothing - but if we call it a deal, we all look good, cool?" and the investors capitulate.
> Is there any likelihood of an acquirer being interested in purchasing the product but not its developers?
At the very least you will be expected to stick around for documentation and gradual hand-over. This may well be the only card in your hand during a negotiation, or it may not be, depending on the circumstances and your relationship to the people transacting the acquisition.
I have to point out though your assumption is that the product is the key asset a buyer will be interested in. Is this the intention of the founders as well? Because counter-intuitive as it may seem, the new company might be more interested in the people who sold this product than the thing itself. Do what you can to find out more.
> Assuming I do stick it out as an acquihire, what's the likelihood I'd be allowed to remain in charge of my product vs having to execute on someone else's vision?
That depends totally on your relationship with your new employer and the structure and politics of the new company. Best case, you'll move up the ladder there. Worst case, they want to get rid of you as soon as possible. Average case: in a year they regret the acquisition, because they realized they'll never make back the money they paid for it. If you do like it there, it might make sense to move onto a more important product in their core portfolio before the acquisition hangover hits them.
> how do I best stand up for my own interests here, without being the asshole that ruins the deal for everyone?
Be friendly, exude an aura of confidence and competence, but don't be a roadblock. Find out what the decision makers want (first at your current company, then at the new one) and help them achieve their goals. The risk is still you'll be left at the side of the road, but then again, that's always a risk.