Sounding Off: Startups should consider giving something away for the greater good

Each Friday, PhocusWire dissects and debates an industry trend or new development covered on our site that week.

The period in which Kayak was raising capital seems like a different era compared to the investment market that travel startups operate in now.

The company's biggest round (just short of $200 million in 2007) came at a point when metasearch was still in its relative infancy, with barely any competitors in its domestic market of the U.S.

This is not to say that it was an easier process for Steve Hafner to persuade investors to part with their money, but the landscape was a fundamentally different one.

Kayak was clearly "the best at taking capital" during that time, there is no doubt about it - illustrated by its ability to push the brand from a product perspective and also spearhead its expansion into new territories.

This, as we now know, ultimately put the brand on the pathway to an IPO and then a sale to Booking Holdings for $1.8 billion in 2012.

Fast forward to 2020 and the ins and outs of how investment capital is placed into companies can still be a mystery.

But there are few companies that have seized on the strategy that Kayak adopted by, as Hafner says, giving away bits of the company in order to achieve its goals.

There is perhaps now an underlying trend that says capital can be raised but the risk is taken on through the financial performance of the business, rather than sharing the future prospects of the company by offloading equity.

The latter scenario was taken a step further by snapping up other businesses and adopting the same equity-sharing strategy.

The "for the greater good" idea seems alien almost to some of the businesses that are raising huge sums of money but not using it to buy out competitors, especially in markets where there are countless other businesses often doing very similar things.

Peak Kayak and its investment/acquisition policy might seem alien to many startups or growing businesses as we enter the 2020s, but it shouldn't be ruled out for fear of dilution of the potential endgame.