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.