The Hidden Risk in “Smart” Licensing Deals — And How the Marriott–Sonder Story Became a Masterclass in What Not To Do

@Start.Pivot.Grow. December 1, 2025

Every founder loves a great partnership announcement.

A licensing deal with a major brand.

A splashy investor deck.

A new vertical where the upside looks limitless.

But behind every headline is a financial structure—and that is where companies live or die.

Today’s case study: Sonder, the once high-flying hospitality startup whose apartment-style concept made them the darling of both Silicon Valley and the travel industry. Years ago,

Sonder represented the future of flexible, tech-enabled stays. Investors piled in. Growth was aggressive. And Marriott even tapped Sonder to help power a new apartment-style category—a rare nod from the world’s largest hotel company.

So how did Sonder end up with a collapsing stock price, exited investors, terminated agreements, and thousands of empty rooms they were still on the hook to pay for?

Because a licensing deal is only as good as the balance sheet underneath it, and Sonder’s balance sheet was quietly fighting against them the entire time.

This is a breakdown for entrepreneurs, CEOs, and investors who want to understand:

• Why a big partnership is not always a win

• How financing structures can sabotage even strong business models

• What went wrong in the Sonder–Marriott dynamic

• And what founders must look for when entering a licensing deal or raising capital

Let’s get into it.

1. Sonder Was Selling a Vision—But Carrying the Risk of a Landlord

Startups often love to say they’re “asset-light,” but Sonder wasn’t.

Sonder leased apartments and entire buildings the way a landlord would.They furnished them like a designer.And they operated them like a hotel.

That's three expensive business models rolled into one.

On paper, this looked innovative.In practice, it created a dangerous mismatch:

Sonder had long-term obligations and short-term revenue.

• Landlords wanted monthly payments

• Guests paid nightly

• Occupancy fluctuated

• Capital markets tightened

That disconnect is what strangled their cashflow long before the headlines arrived.

2. What Marriott Actually Wanted From Sonder

Let’s be clear: Marriott didn’t partner with Sonder because they needed a startup to teach them hospitality. Marriott partnered with Sonder because they needed speed.

Sonder brought:

✔ Inventory

Already-secured apartments in key cities.

✔ Operational know-how

They knew how to run apartment-hotels without traditional hotel infrastructure.

✔ A brand and guest experience

Modern. Digital-first. Younger audience.

✔ A technology layer

Self-check-in, digital support, ops automation.

But Marriott did not want Sonder’s liabilities.They wanted the design without the debt.The vibe without the leases.The innovation without the cash burn.

When Sonder’s financing strategy faltered, the licensing deal became riskier—for Marriott, too.

Eventually, Marriott simply… stepped away.

3. Was the Business Model Wrong—or Just the Money Behind It?

If you asked me the #1 lesson from the Sonder saga, here it is:

The business model was innovative. The financing model was unsustainable.

Let’s compare:

🚨 Sonder’s model

• Long-term leases

• High upfront furnishing costs

• Price-sensitive, occupancy-dependent revenue

• Massive capital burn

• Reliance on investor cash to fund expansion

🏨 Hotel brands (Marriott, Hilton)

• Do not sign leases

• Do not carry debt for buildings

• Earn fees on management and branding

• Consistent revenue with minimal risk

🏘 Airbnb

• Owns no rooms

• Bears no operating risk

• Collects a transaction fee

Sonder sat awkwardly in the middle:

Too risky for tech multiples, too asset-heavy for hospitality stability.

When interest rates rose and public markets tightened, Sonder couldn’t raise the next round. And without new capital, the entire model showed cracks.

4. How Investors Exited While Sonder Kept the Liabilities

This is the part founders need to pay attention to:

During Sonder’s SPAC process, early investors had the chance to cash out. Some did. That’s not unusual. But for the operating company, the obligations didn’t go with them.

Early investor exits ≠ operational relief.

The leases stayed.The debt stayed.The obligations stayed.The empty rooms stayed.

Sonder was left holding the bag while the people who funded the dream walked away cleanly.

This is where leadership must understand:

When financing structures aren’t aligned with long-term operational risk, the company—not the investors—pays the price.

5. The Balance Sheet Breakdown: Where Things Actually Collapsed

Let’s translate the accounting into plain English:

(1) Long-term leases became anchors.

You owe rent whether the room is booked or not.

(2) Build-outs and furnishings required continuous capital.

Hundreds of units × thousands in furniture = millions burned upfront.

(3) Occupancy volatility killed predictability.

Tourism slows → losses compound instantly.

(4) Debt maturities collided with a frozen capital market.

No refinancing = existential crisis.

(5) Public market scrutiny exposed the truth.

SPAC enthusiasm faded. Cash burn became the headline. The stock suffered.

Any one of these is painful. All of them at once? Fatal.

6. Why Marriott Will Absolutely Try This Category Again—Just Not With This Structure

Marriott is not leaving the apartment-style trend behind; the demand is too strong.

But next time, Marriott will seek:

✔ Asset-light operators

No lease liabilities. No heavy capex.

✔ Revenue-sharing structures

Marriott takes fees; operators take flexible risk.

✔ Partners with diversified inventory

Not locked into massive long-term commitments.

✔ Scalable but disciplined management models

Not hyper-growth fueled by fragile capital.

Marriott didn’t lose faith in the category. They lost faith in the structure.

7. Lessons Every CEO, Founder, and Investor Should Take from This

If you take nothing else from this article, take this:

Your financing strategy is your business model.

If it fails, nothing else saves you.

Lesson 1 — A licensing deal doesn’t hide balance-sheet risk.

A big partner won’t save you if your obligations are unmanageable.

Lesson 2 — Growth fueled by debt or leases can implode fast.

Short-term demand doesn’t guarantee long-term solvency.

Lesson 3 — Investor exits don’t mean the business “won.”

Sometimes it means they’re jumping ship before reality hits.

Lesson 4 — Public markets punish fragile structures.

SPAC momentum masked structural weaknesses—until it didn’t.

Lesson 5 — Asset-light wins in hospitality. Always.

The brands that survive don’t own buildings; they own distribution and trust.

Closing Thought

Sonder didn’t fail because the idea was bad. It failed because the scaffolding holding the idea up was built on the wrong kind of money.

The hospitality industry still wants the product Sonder pioneered.Guests still want apartment-style stays. And Marriott still wants to lead in that category.

But the real lesson for leaders is this:

A brilliant concept can be destroyed by the wrong financing strategy, the wrong liabilities, or investors who cash out before the foundation is solid.

Every CEO navigating partnerships, licensing agreements, or growth financing needs to internalize what happened here. Because this isn’t just a Sonder story.

It's an entrepreneurship story. Read the latest LinkedIn article for more.