
Hipmunk Closes Hyper-Competitive Angel Round, Sans The Usual Suspects - icey
http://techcrunch.com/2010/10/05/hipmunk-closes-hyper-competitive-angel-round-sans-the-usual-suspects/
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vegashacker
It surprised me to see Sam Altman on this list. Where does that money come
from? Maybe Loopt is very profitable and he takes a big salary? Or maybe he
had cash before Loopt?

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leelin
Most angel investors need to decide whether to put up the money based on a few
one-hour pitches and what they read in the press. Those are pretty bad sources
of information if the biggest challenge of early-stage investing is judging
the founders, because the founder is in "pitch mode."

YC alums in a position to invest can interact with the founders for months in
very social and relaxed settings as peers. That's orders of magnitude more
data than what you get in normal angel investing.

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vegashacker
I agree Sam may be in an especially good position to make guesses about the
future of companies, but that doesn't explain where the investment money comes
from.

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Psyonic
Also, to be an accredited investor, don't you need a net worth of like $1
million? So having 50k lying around doesn't cut it. Although there might be
exceptions to that rule... I'm definitely no expert on the subject.

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asmithmd1
Here are the rules for being an accredited investor:
<http://www.sec.gov/answers/accred.htm>

_"income exceeding $200,000 in each of the two most recent years or joint
income with a spouse exceeding $300,000 for those years and a reasonable
expectation of the same income level in the current year"_

And it is not like you have to submit to an audit to the company before
sending them a check -- all you have to do is sign something that says you are
accredited. That way you will have a harder time suing the company claiming
you were mis-led or whatever.

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Psyonic
Thanks for looking that up. Looks like it's not terribly difficult to qualify.

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johnrob
Proven team + big market = competitive round of funding.

Interestingly, it seems like they went with a lot of investors with experience
as a founder.

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thafman
The team are proven entrepreneurs, but it's not like other travel start-ups
like Kayak and Tripit where the founders all have proven domain expertise,
Steve and Adam are hardly travel industry veterans.

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spez
> Steve and Adam are hardly travel industry veterans.

Not for long!

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ld50
<http://news.ycombinator.com/item?id=1762521>

any thoughts? covered this elsewhere? --link?

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scorpion032
Hipmunk has Paul Buchheit, Sam Altman, Ron Conaway, @aplusk as investors,
Steve as a founder and @kn0thing as a marketing head.

Has a ton of revenue already, Doesn't really need more capital - Steve has
enough from the Reddit sale.

Enough said.

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icey
Hipmunk already has a ton of revenue? Source?

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thafman
Affiliate booking revenue

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ld50
ok... i'll play along.

what revenue? where are the customers? how much are they paying to acquire
them? how much affiliate revenue do they actually receive per transaction? how
do they retain customers? how are they planning to overcome the non-existent
barriers to entry in that space?

scorpion032's comment: "Steve has enough from the Reddit sale." is dead on.
think about it.. these guys could self-fund the project without breaking a
sweat and yet they still sold 20 point equity stake. why? --diversifying risk
or pr, really.

either steve realizes hipmunk's a longshot and isn't quite sure that he and
his co-founder's street cred will actually play out in terms of long-term
customer acquisitions and retention so he's cashing out now while the handful
of early adopters (their "e-following") will still look like an aggressive
growth curve), or he's trying to get some free press. basically.

edit: i say "longshot" in the sense that i feel it's unlikely that their
competitors will do nothing to adapt to any serious hipmunk rise... so unless
their competitors are clueless-- which i doubt they are-- and unless they
develop some sort of non-replicable competitive advantage-- which i dont see
happening-- i think they'll have a hell of a time gaining any ground.

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unexpected
Congrats to hipmunk! I will say that I've become an instant convert, and
everyone I have showed the site to has LOVED it.

Good luck - this is a tough space, but hopefully you can succeed!

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danilocampos
Hipmunk is going places. Travel is one of the most user-hostile consumer
spaces around. All they have to do is stick to their guns, continue evolving
their product in a direction that puts the user first and they'll be on their
way to printing money. Once you use Hipmunk, every other travel site looks
like a stupid, ad-soaked bully with their constant upsells and bundles.

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SriniK
I am big fan of hipmunk as well. However as a product point of view I am
afraid other folks(kayak/bing-travel) can easily copy/tweak their front end to
match. I couldn't find stickiness in their business model.

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danilocampos
They could, but they'll be playing catch-up. Hipmunk has the merit of, pro-
actively, knowing the value of user focus. If they stick with that theme,
there are innumerable places in the travel purchase experience that can be
polished and made less miserable. You can copy ideas after the fact, but not
the active brains that drive them. The brains are Hipmunk's greatest asset.

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timcederman
What makes you think the other sites don't know the value of user focus? I am
not sure that the aggregator experience is as miserable as you make out.

