Round of the Week – Shape Security

In honor of the RSA Conference happening this week, we have decided to bestow our first “Round of the Week” on Shape Security.

After being rather tight-lipped since its inception and releasing its first product just last month, Shape has quickly become a force to be reckoned with. Armed with quite possibly the best Management/Board/Investor/Advisor combo in the security business and a fresh $40M in backing, this company need not be quiet about their plans anymore.

Name: Shape Security

Website:   http://www.shapesecurity.com/

Funding to Date: $66M ($6M A, $20M B, $40M C)

Deal Notables:  The Board/Management team is literally an “All Star” cast of the security world.  It is no surprise they have been able to secure so much funding prior to their product launch with the caliber of talent they have at their disposal (has to make for a crowded cap table though…). Highlights of the team below, but read here and here to see for yourself just how stacked they are.

  • Sumit Agarwal – The 1st Google Mobile Product Manager and Former Deputy Assistant Secretary of Defense for US Department of Defense
  • Shuman Ghosemajumder – Google’s former “Click Fraud Czar”
  • Michael Coates – Former Chief Security Officer of Mozilla

*Editor’s note:  We will be doing features on both the current state of the Enterprise Security market (hot like fire!!) and the relation of funding amounts to “Exceptional Co-Founders” in the near future so stay tuned!

Advertisements

VC Spotlight of the Week – Ben Horowitz

It only made sense to use Ben as our inaugural VC of the Week seeing that we took a page right out of his playbook in our first ever post (we also like rap lyrics!).  It also helps that he is really good at what he does and is the 2nd half of arguably one of the most recognizable VC names out there…bhorowitz2

Name: Ben Horowitz

Company: Andreessen Horowitz

Blog: http://www.bhorowitz.com/ (One of our liked blogs!)

Bio: Ben was co-founder of Enterprise Software company Opsware which was acquired by HP for 1.6B in 2007.  He then co-founded Andreessen Horowitz which has responsible for investments in many of the hottest deals of the past few years such as Skype, Airbnb, and Box. Full details on Ben can be found here and here.

Miscellaneous/Interesting Facts:  Ben recently declared all proceeds from his book The Hard Thing About Hard Things will go towards the American Jewish World Service to support their efforts for Women’s rights.

*Editor’s note:  Ben if you are reading this: 1) Welcome! 2)We tried messaging you on Twitter to let you know ahead of time we would be featuring you but apparently you do not get DM’s (probably for this exact purpose… well that and the whole twitter-verse spamming you with their Billion dollar business plans that have already “achieved” Product-Market Fit…). 3)  As soon as The Hard Things about Hard Things is available for download on Audible we will be listening and subsequently Book Reviewing it!

Monday Morning Memo

Welcome back dear readers. Today we roll out the first of our Weekly installments (Monday Morning Memo) and in it we give a bit of an overview of what to expect as this site revs up for primetime!

New Layout – Look around the site?  You may notice a different layout of things and we have added some pretty cool blog links of VC’s we like and you should too!  (Seriously, they are awesome)

New Features – We will begin to post content at regular intervals in addition to the blog postings and other musings we may add.  Here’s a snapshot of some things to come:

  • Monday Morning Memo – Who says Monday mornings have to suck? We certainly don’t!  Much like the Monday partner meetings our VC brethren hold each week, we will be posting a weekly update of last week’s events and anything upcoming in the week ahead.
  • Round of the Week – Unfortunately we will not be buying our readers a beer each week, BUT we will be selecting a new funding each week and doing a write-up on the company, backers, round size, and other cool aspects of the deal.  2nd best option to beers?  We think so too…
  • Book Reviews – The beauty of driving to work 40 minutes each way leads to a lot of time for audio books (Sorry Ke$ha, there are only so many times one can listen to Timber in the same day and stay sane…).  Book reviews will be on various topics from Lean Startup Methods to Twitter to Term Sheet Nuances.
  • Weekly VC Spotlight – Each week we will be featuring a VC on the site with background about their career path, Fund, current investments, notable exits, etc.  Initially it will just be all general information, but the goal would hopefully be able to get some Q&A with them as well. To future spotlight members, we will most likely contact you via Twitter (we promise we are not spam, we just have wayyyy too much interest in your world)
  • Valuation Attempts – Periodically, we will feature some valuation techniques and apply them to recent rounds.  This will mostly be a way to put on our “VC hat” and take all available characteristics of a deal and try to piece together what the terms/cap table impact would be. Given that we are not privy to the deals themselves they may not be too accurate, but they will at least be fun to do!

We are always looking for cool new content to feature or other fun ideas so this list is by no means exhaustive and is subject to change.  If you have an idea, let us know!  You can use the Contact Us page or send us your thoughts via the twitter machine.

Any feedback whether positive or negative is greatly appreciated as we work to build out this site. Seriously, we are adults and won’t get upset if you tell us we are bad at writing (we probably are…) or that our valuation methodology is about as realistic as every company with funding becoming a unicorn (Wait, 40% on an A round with 2 board seats and 3x liquidation preference aren’t standard terms?)

Facebook buys WhatsApp – How do you like me MAU?

It’s only fitting that we take a page out of Ben Horowitz’s book and begin our foray into the blogosphere with a Rap Lyric…

“How you like me now, when my pinky’s valued over three hundred thousand” – Usher, “Yeah!”

Pretty sure if you add a few zeroes on the end of that number that is EXACTLY what Jan Koum, Brian Acton, and the rest of the team at WhatsApp  were thinking last night when Facebook announced they had acquired the Mobile Messaging app for an astounding $19B.

A lot of the tech media has covered the deal in various forms today (see here, here, here, and here) but for those who want the spark/cliff notes version then you have come to the right place!  Here are the key takeaways from the biggest VC-backed exit yet:

Cash vs. Stock  This is a split Cash/Stock deal where the company receives $4B in Cash and $12B in Facebook Stock with $3B in RSU’s (Restricted Stock Units).  Smart move by Zuck/Ebersman to use shares as currency and limit the cash outlay.

MAU – MAU (Monthly Active Users) is a widely used metric for consumer-facing companies and WhatsApp has over 400M of them and they seem to be growing exponentially every day.  Needless to say, if you can get to that many active users in such a short time period, then you will be the belle of the ball at the consumer-facing company Prom.

Location, Location, Location – As the old real estate saying goes, “the only thing that matters is Location, Location, Location!” and WhatsApp has plenty of that.  They have a dominant position on mobile messaging services in a lot of the growing areas that Facebook wants to expand its reach.

There are plenty of other reasons why the deal makes sense given Facebook’s overall mobile first strategy and letting WhatsApp operate Instagram-style (i.e. as its own entity) must have been a deal-clincher for Jan and team.

Finally, big props to Sequoia and Jim Goetz for basically doubling their fund size with this one exit (their stake was rumored to be in the high teens). Pretty sure you have just secured over-subscription for all future funds and made a few LP’s extremely happy in the process.