TLDR:
A soft landing refers to a scenario where an economy or business transitions from a period of rapid growth to slower, sustainable growth without entering a recession or significant downturn.
Soft Landing Negotiation
Negotiating a soft landing requires founders to balance investor interests (maximizing recovery of invested capital) against team interests (ensuring key employees have fair compensation for transitioning to the acquirer) and their own interests (being able to work on something meaningful post-acquisition). The most successful soft landings involve a simultaneous negotiation between the acquirer, the target’s investors, and the target’s founders and key employees.
The alternative to a soft landing — a hard landing where the company simply closes operations — is generally worse for all parties. A hard landing means employees receive no retention bonuses, investors may receive nothing above liquidation value, and founders damage their reputation by association with a company failure. By contrast, a well-executed soft landing can provide meaningful employment and financial outcomes for the team, some capital recovery for investors, and continuity of service for customers.
Soft Landing Negotiation Dynamics
Soft landings often involve tense negotiations between founders, employees, investors, and the acquirer. Founders typically want to maximize retention packages and runway for retained team members; investors want to maximize cash returned to the cap table; acquirers want to minimize total cost while securing the talent and assets they value. The economic split between “deal consideration” (paid to shareholders) and “retention consideration” (paid to retained employees as compensation) is the central tension — investors push for higher deal consideration, acquirers push for higher retention. Soft landings without explicit founder-investor alignment up front frequently break down at closing.