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By John Mullins, Shira Conradi


This is part of a case series. John Erceg was in a quandary. It was a sunny spring day in Barcelona in April 2010, and he’d been negotiating for several weeks with a possible buyer for the company that he’d created from scratch and built over the past seven years. Apart from buying two Barcelona apartments that got him started – thanks to his then girlfriend and now wife Lucia’s good credit and a couple of hefty mortgages – and apart from maxing out a couple of credit cards in the early days and personally funding small losses in the early years, Erceg had not invested a single euro in an online travel agency business for which he had just been offered 17.3 million euros. The offer from GoTravelNow had come as a complete surprise. EnGrande, as Budgetplaces’ corporate entity was called, was growing fast and was highly profitable, and Erceg wasn’t sure what to do. After weeks of negotiations, he had managed to improve the cash portion of the offer to 8.5 million euros. ‘A life-changing amount of security for seven years worth of work,’ he thought. Should he take the offer that was on the table? It was time to decide.

Learning objectives

  1. Understand the challenges facing the entrepreneur in trying to establish an online travel business.
  2. Understand customer funding and how customer-funded business models work
  3. Evaluate different ‘matchmaker models’ in the online travel industry.
  4. Assess alternative company valuations and scenarios in considering whether to expand or sell the business.


Publication Date: December 2014
LBS Case Code: CS-14-013
Subjects: , , ,
Pages: 23
Format: pdf