Executive Summary

LinkedIn offers a unique opportunity for investors to take a stake in an early-stage, high growth professional social networking company with the potential to disrupt the $100 billion plus Business Relationship Management market.

Our investment thesis on LinkedIn can be distilled into six simple words: “Disrupting By the “Power of We””. Through the “Power of We”, we believe LinkedIn has discovered the Holy Grail of Business Relationship Management: how to transform candidate pools, business prospect leads, and business customer bases from depreciating into appreciating assets.

LinkedIn empowers professionals by enabling them to build social capital. This greater purpose creates the “Power of We” as it inspires a thriving stakeholder ecosystem and creates the following new generative economic moats:

1. Low-Cost Producer: Members are the source of LinkedIn’s raw material.
2. Intangible Assets: LinkedIn created “Long Tail” of Business Relationship Management.
3. High Switching Costs: Freemium aspect and social capital benefits create stickiness.
4. Network Effect: Leads to appreciation in value of LinkedIn’s structural asset.

The prize at the end of the path to disruption is the $100 billion plus Business Relationship Management market. LinkedIn’s new revolutionary Talent Pipeline platform positions LinkedIn to disrupt the $85 billion Talent Relationship Management market. Its Marketing Solutions is poised to capitalize on the shift from transactional to relationship-oriented marketing and disrupt the $25 billion B2B Marketing market. And LinkedIn’s recent launch of Sales Navigator marks its entry into the $18 billion Customer Relationship Management market.