Returns flow to those who wait: Flywheels, intent harvesting and defensibility at TripAdvisor

The founders of TripAdvisor raised $4.2m of venture capital in mid-2000 and exited the business four years later for a $210m sale price. Their investors received roughly ten times their money. A great outcome for venture capital.

Today, TripAdvisor is a publicly traded company worth $10bn generating $200m in profits every year. TripAdvisor’s original investors could be receiving their ten times return every single year if they invested to own, instead of owning to exit. Returns flow to those who can wait. Most investors have time constraints or institutional imperatives that mean they can’t. In superannuation, members don’t need liquidity (to cash out) until they retire, thirty to fifty years from now for millennials. Continue reading…