Benzinga
Published Mar 21, 2024 20:42
Updated Mar 21, 2024 22:10
7 Investors Turned Down $150K Airbnb Investment: Here's How Much That Stake Would Be Worth Today
Benzinga - by Chris Katje, Benzinga Staff Writer.
Online short and long-term vacation rental company Airbnb Inc (NASDAQ:ABNB) is one of the most recognizable travel companies today.
Years ago, when the company was looking for finance to grow, investors rejected Airbnb and its concept. Here's a look back at what could have been.
What Happened: Airbnb went public in 2020 with one of the most anticipated IPOs in years. The company was valued at $47 billion at the time.
In its early days, before its IPO, the company needed funding to grow the business and expand the concept.
Founded by Brian Chesky, Joe Gebbia and Nathan Blecharczyk, Airbnb began with a concept of renting out portions of an apartment during a conference as a way for short-term rentals to help pay rent.
A post shared by Jon Erlichman on X, formerly known as Twitter, showed the struggle the company had at convincing investors to invest in the company.
"In 2008, Airbnb's founders needed funding. They wanted $150,000 for a 10% stake. They emailed 7 investors. 5 sent back rejections. 2 didn't respond," Erlichman tweeted.
Erlichman shared the rejection letters in the tweet, which are listed below.
Why It's Important: Airbnb is now valued at a market capitalization of $105 billion, which means the 10% stake today would be worth $10.5 billion.
Turning $150,000 into $10.5 billion is a nice return. While some of the investors may regret not investing in Airbnb, several also hinted at not having experience or wanting to invest in the travel sector.
Airbnb would go on to raise funding from Sequoia Capital and Y Combinator.
Replying to Erlichman's post, Y Combinator co-founder Paul Graham said Airbnb had a handshake deal in 2008 for $100,000 invested for a 10% stake. Graham said the investor "welched after the stock market crashed."
Graham said "Thank God!" that the investor didn't take the deal as Y Combinator ended up a winner from the company's growth.
Read Next: Airbnb’s Founders Sold $30,000 In Cereal Boxes Inspired By Obama And McCain During Company’s Early Funding Days
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read the original article on Benzinga
Written By: Benzinga
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.