Case Detail

Case Summary

Gil Mandelzis and Traiana: Value Is in the Eye of the Beholder

Case Number: 5-110-009, Year Published: 2010

HBS Number: KEL469

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Key Concepts

Value, Valuation, B2B Marketplaces, Foreign Exchange (FX) Prime Brokerage, Sequoia Capital of Israel, Selling a Company, Exit Strategy, Venture Capital Investing, International Entrepreneurship


The case focuses on the career of Gil Mandelzis, a former Wall Street investment banker who recognized and seized an opportunity to build his company, Traiana, into a successful services provider for financial institutions in the foreign exchange prime brokerage market. The case describes Mandelzis’s history, beginning with his earliest entrepreneurial effort as a Tel Aviv bar owner and continuing through his decision to start Traiana.

Time and again, Traiana achieved success only to be undone by unexpected, uncontrollable events. Each time, Mandelzis rebuilt the company from scratch. In one memorable instance—the one that enabled Traiana’s ultimate success—Mandelzis abandoned a business plan that had created a $10 million company, fired 40 percent of his employees, and embarked on a brand-new direction.

At the time the case is set, Traiana appears poised to grow into a major force in the foreign exchange prime brokerage business. Then Mandelzis receives an offer to buy the company for $164 million. The management team must either accept the offer or assume the risk that Traiana’s growth will continue and its value will escalate in the coming years. For a company that has repeatedly seen unexpected events derail management’s plans, taking the risk is not easy. The case posits three choices: accept the offer, reject the offer, or seek out other buyers.

Learning Objectives

Students must determine Traiana’s value and advise Mandelzis how to respond to the offer. In determining its value, students learn to consider factors outside the company. The key insight in analyzing this case is understanding that Traiana’s value should be seen in terms of its worth to the potential buyer rather than only using typical valuation measures such as current or projected revenues.

Number of Pages: 5

Extended Case Information

Teaching Areas: Entrepreneurship, Management, Technology

Teaching Note Available: Yes

Geographic: New York, United States

Industry: Foreign Exchange Prime Brokerage Services

Organization Name: Traiana

Organization Department: Senior Management

Organization Size: Small

Decision Maker Position: Founder and CEO

Decision Maker Gender: Male

Year of Case: 2008