Aquisition isn't a bad thing, in the startup world successful "equity events" are IPO or acquisition. Often acquisition is the better option because you instantly gain the acquiring firm's sales channels and economies of scale (engineering support, vendor leverage & manufacturing scalability...). In the networking world the best thing going was to be acquired by Cisco. Self funded growth is a slow process, the IP is worth alot more to a company that can ramp quickly before other companies enter the market.
With the RIF's, life in a startup is like that, there's a huge focus on managing cash flow. Hit a major milestone then RIF a good chunk of your tech staff, just keep the architects and visionaries. On the marketing front, RIF the people after the plan has been designed and contracts cut. You either make yourself indispensible or assume your "full time" position is just another contract gig.
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