That is, the company has its customers’ cash in hand before having to produce or pay for the good (or service) it sells.Īirbnb brings together travelers who need a place to stay with hosts who own a place they want to rent. The best part about the matchmaker model is that not only does it take little or no cash to expand a mid-market company, but it can even give the company what accountants call negative working capital.

The real estate industry is a classic example of a traditional business running on the matchmaker model. It’s important to also note that the matchmaker model isn’t just limited to modern technology-enabled services, but it’s been around for more traditional businesses, too. Yet they make a handsome profit through commission or listing fees, either from the buyer, the seller, or sometimes from both. None of these companies own or touch any of the things that are being bought, sold, or exchanged. Uber, TaskRabbit, and Freecycle are some other examples of successful organizations using matchmaker models.īut it’s not only startups that put such models to work. Many of these companies were built with virtually no investment to get started because they had no need to buy what they were going to sell. Visionary entrepreneurs built matchmaker companies like eBay, Airbnb, and Expedia. The Matchmaker Model: Finance & Grow Your Mid-Market Company – Without VCīy bringing together buyers and sellers, but not owning – and never even touching – what is bought and sold, today’s matchmakers grow their companies with virtually no external funding because there is no need to tie up cash in large amounts of inventory.

Companies like airbnb