Danielle Forward • Fall 2016 • Creative Founder

In Fall 2002, everyone thought the consumer internet was dead.

“In a boom, employers are really hunting for a good person, and they're using LinkedIn. And during a

bust, people on the other side are looking for a good opportunity.”

Reid Hoffman, Principal Founder, LinkedIn

Reid provided the initial seed funding to launch LinkedIn publicly on May 5, 2003.

Reid and his team pitched LinkedIn to over 24 different venture capital firms and repeatedly faced rejection.

Finally, Sequoia Capital, an investor of PayPal, said they would lead the Series A funding—a $4.7 million

round which closed in November 2003.

Reid and his team pitched LinkedIn to over 24 different venture capital firms and repeatedly faced rejection.

“Mark Kvamme, partner at Sequoia Capital

LinkedIn provides both patented and effective technology that has the power to transform hiring

—very much in the way PayPal re-engineered the transfer of money and Google dramatically increased

the utility of the Internet for individual consumers and professionals.

LinkedIn was successful because it didn’t need to rely on an economic boom to succeed, but rather

facilitated economic activity itself.

Today, LinkedIn has over 450,000,000 members and took in almost 3 billion in revenue in 2015.

Today, LinkedIn has over 450,000,000 members and took in almost 3 billion in revenue in 2015.

But only 25% of those users are active monthly, and despite high revenue, recorded a net loss of

$162 million.

20162015201420132012

2015201420132012 2016

Most people aren’t looking to change jobs all the time. Instead, they want to communicate and build relationships

. . . As a result, LinkedIn is now, at best, a business card holder. At worst, it’s a delivery service for spam.

—TechCrunch

“

+$26.2 billion · June 13, 2016

Understand your audience. Who are you pitching to? Research investors thoroughly.

Understand your audience.

Understand the broader financing climate

Who are you pitching to? Research investors thoroughly.

When Reid was pitching LinkedIn, most investors were wary of how consumer internet businesses made money, so he addressed the issue head-on.

Sources

http://fortune.com/2011/05/26/how-linkedin-first-raised-money-and-endured-rejection/

https://mixergy.com/interviews/konstantin-guericke-linkedin-interview/

http://www.huffingtonpost.com/2011/05/19/linkedin-ipo-success_n_864248.html

http://www.reuters.com/article/us-lnkin-corp-results-idUSKCN0VD2SL

http://www.inc.com/jeff-bercovici/microsoft-linkedin-social.html

http://www.cnbc.com/2016/07/07/linkedin-co-founder-hoffman-why-we-sold-to-microsoft.html

http://time.com/4366106/linkedin-microsoft-why/

https://techcrunch.com/2016/02/23/linkedin-problems-run-deeper-than-valuation/

http://www.forbes.com/sites/antoinegara/2016/06/13/linkedin-is-the-latest-fast-growing-tech-company-to-give-up-on-the-stock-market/#1bc3a02050be

http://www.reuters.com/article/linkedin-results-research-idUSKCN0VE1N0

http://www.businessinsider.com/the-story-of-linkedins-stunning-success--as-told-by-the-people-who-were-there-2011-6?op=1

https://ourstory.linkedin.com/

https://ycharts.com/companies/LNKD/market_cap

http://www.cnbc.com/2016/02/04/linkedin-reports-q4-earnings.html

http://reidhoffman.org/linkedin-pitch-to-greylock/