Monday Morning Memo


We haven’t forgotten about you dear readers!  We are in the midst of some professional changes in our working life so please bear with us for the next couple of weeks.

We hope to get the rounds of the week and other cool posts back up and running this week so stay tuned!

Round of the Week – Sport Ngin


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You may be wondering why there are two shovels in the photo above, and the answer isn’t that us here at C:V. have lost our minds, it is actually the US Pond Hockey Championships in Minneapolis and Sport Ngin who has been selected for our Round of the Week is the lead sponsor.  Now why would we include this little tidbit of information in our feature about a rather intriguing software company that has just raised a $25M Series D round that was recently expanded to $29M to expand their presence in the sports website and tournament/league software business?  More on that in the notables section below…

Name: Sport Ngin


Funding to Date: $39M ($0.7M A, $3.5M B, $6M C, $29M D)

Deal Notables: Sport Ngin is a Minnesota based company and are also the main sponsor of quite possibly the best Pond Hockey tournament in the nation, the US Pond Hockey Championships.  Completely non-deal related, but C:V.’s fearless leader actually participated in this awesome tournament last year (and also took the photo of the shovels) so when we saw the funding we knew we had to post it….

Round of the Week – CounterTack

Cybersecurity firm CounterTack has raised an additional $5M to bring their total Series B funding to $20M. The endpoint security player, who considers Mandiant (now FireEye owned Mandiant…) its biggest competitor will use this new funding to scale and expand their offerings.

Name: CounterTack


Funding to Date: $34.5M ($14.5M Series A, $20M Series B)

Deal Notables: Two things of note on this round:

  1. This seemed to be a tranched round of some sort in that news clippings for this Series B go back as far as October 2013. We here at C:V. have never heard of a round having multiple closes of differing amounts over this long of a timeframe so we can only decipher that it was a tranche/milestone type round or that other investors were somehow able to get in at the B round price almost a year after the initial raise. Either way it seems the company is hitting on all cylinders and is well deserved of the additional funding to keep up with demand.
  2. The investors are a solid mix of future partners (Alcatel-Lucent), Private Investors (Fairhaven Capital Partners), and Public Investors (OnPoint Technologies – the US Army’s VC arm) and we really like to see when the OnPoint’s and In-Q-Tel’s of the world join in on investments to not only further the interests of national security but also help foster innovation in the security sector.

Monday Morning Memo


And we’re baaaaaackkkk!!!  C:V. has returned from our annual vacation and we have some cool new things ahead as well as getting back to the special sauce that is all things C:V.

Recap of Week Before Last: We finished out our Valuation World Cup!

What Lies Ahead: We will be getting back to our Round of the Week and expect a new feature post this week on a new spin on valuation!

P.S. We have a new twitter handle – check it out and follow us @CapitalVentured


Valuation World Cup: A Champion is Crowned!!


*Editor’s Note: Keep up to date on all things Valuation World Cup here!

The day we have all been waiting for is here!  Two of the early favorites have lived up to the hype and advanced to the VWC Finals!  Though the methods have taken different paths, they both remained committed to their team and investment rationale.


Group B Winner (EV/Sales) vs. Group D Winner (Acquisition Value (Attach Rate))


Acquisition Value (Attach Rate) had been a nearly unstoppable force throughout the tournament with timely scoring and full team efforts and this beginning of this game was no exception.  They got out to an early 1-0 lead due to their ability to size up the competition regardless of market factors and ensure its fit within the business model of the acquiring company.  EV/Sales took this initial deficit in stride and made an inspired push to end the 1st half but could not equalize.

When the pundits look back at the Inaugural Valuation World Cup in the history books 20 years from now, they will most remember the final as a tale of two halves.  The first half was Acquisition Value (Attach Rate) continuing its dominant pace of play that had gotten it this far. It was the hot metric, with some big name press as of late. When Mr. Andreessen tweets 14 times about something, you take note.  But you know else got a lot of press this World Cup? Tyranno-Suarez Rex.

In the second half, the Acquisition Value (Attach Rate) supporters’ deepest fears were confirmed in that the Achilles heel of the entire team was the fact that the Attach Rate was only as good as the acquiring company’s analysis and as a result could be fairly niche and hard to value at times.  This confusion was brought on by EV/Sales change in formation from a pedestrian 4-4-2-1 to an attacking 4-2-3-2 and only made worse by an own goal.  Acquisition Value (Attach Rate) was accustomed to the initial formation and when EV/Sales switched, it fell into an unrecoverable spiral similar to when a company buys a target and then it turns out to be a horrible deal for the acquirer (we see you HP-Autonomy…).

After the formation change, Acquisition Value (Attach Rate) looked as bad as Wesley Sneijder’s repeated failed attempts to cross a ball into the box in the Argentina game and it was all downhill from there.  EV/Sales caps off the comeback and with an absolute FIRECRACKER in the 85minute due to their reliance on a tried and true method.


EV/Sales 2 : 1 Acquisition Value (Attach Rate)

And a Bonus!

Golden Metric Award:

Despite a tough loss in the final, the Golden Metric was awarded to Acquisition Value (Attach Rate). They won all three games in their Wild Card Group D against some wily opposition, outscored opponents 9-1 in their first two knockout stage games, and gave the mighty EV/Sales a run for their money (get it?) in the final. As technology behemoths sit on PILES of cash and command high stock prices, we could see a buyer’s market for years to come.

Valuation World Cup: Semifinal 2 – Attach Rate advances!

*Editor’s Note: Keep up to date on all things Valuation World Cup here!

The semifinals conclude in excellent fashion!


Group A Winner (Adjusting the Average) vs. Group D Winner (Acquisition Value (Attach Rate))


The powerhouse of Acquisition Value (Attach Rate) versus the tactician’s dream of Adjusting the Average was an excellent match.  Both teams used their ability to holistically view an opportunity from the start and scored early.  The game continued to be evenly matched up until the half, but Adjusting the Average made a few unusual errors that ended up costing them the game.

Usually a bedrock of both relevant talent mixed with strong subjective game management from the coaching staff, Adjusting the Average’s head coach made a questionable defensive substitution in the 65′ (we hear this is now called “Van Gaal-ing”…) This allowed Acquisition Value (Attach Rate) to change its formation and exploit the weakened back line similar to the way they dismiss current market valuations for the proper target company and find valuable deals that fit their company’s specific ecosystem.


Adjusting the Average 1 – 3 Acquisition Value (Attach Rate)

Valuation World Cup: Semifinal 1 – To PK’s we go!

*Editor’s Note: Keep up to date on all things Valuation World Cup here!

The Semifinals begin!

It All Comes Down to Penalty “Quicks”


Group C Winner (EV/LCV) vs. Group B Winner (EV/Sales)


It’s been a physically brutal first 120’, and neither team could make any decided advances. Hmmm where have we seen that before… So here we sit, 0-0 with five quick “rounds” to go: five chances to get that valuation right or face elimination.

Company 1: “Handlr”  A Prosthetics Delivery Firm

EV/LCV quickly realizes that each customer has a low lifetime value because of low margins, and therefore will require significant growth in customer base which would be hard to achieve in the prosthetics industry. EV/Sales sees high topline figures for a young company aaand… overvalues. 1-0 EV/LCV.

Company 2: “Campr”  An Online Video Game for Pre-Teens

Both teams recognize that these developers can continue to churn out new games. EV/LCV adjusts up their current figures for that option of future value; EV/Sales used high growth comparables to reflect the potential. 2-1 EV/LCV.

Company 3: “Fishrman”  Analytics for Fishing Vessels

The tides turn as EV/Sales finds reasonable comps by using both analytic companies anchored by those in the food industry. EV/LCV, on the other hand, undervalues because early customers have been small independent fisheries whereas the future growth will come from larger corporate operations with much higher revenue coupled with lower onboarding costs of focused efforts. Even at 2-2.

Company 4: “Advr-tizr”  Digital Media Content for Millenials

Here’s where EV/Sales flexibility comes into play. This company is growing too fast to use current year revenues, so a one-year forward multiple is used. EV/LCV is up to the task as well, noting that their customer acquisition costs are decreasing, driving Advr-tizr’s LCV up in the future. Even at 3-3.

Company 5: “Smeltr”  Late-Stage Hardware Manufacturer

EV/LCV thinks they have it. They recognize the sales to academic research institutions and run with the notion that these high-value customers will continue to drive value. However, this market has already been saturated with their products. Any new sales with be fewer and further between. Their valuation sails over the crossbar! EV/Sales used late-stage comps and didn’t overweight the growth opportunities, securing their place in the final!!! EV/Sales wins 4-3.


EV/Sales 1-0 EV/LCV PK’s (4-3).

Valuation World Cup: Quarterfinal 4 – MAU Goes Down!

*Editor’s Note: Keep up to date on all things Valuation World Cup here!

Day two of the Quarterfinals continues!


Group C Runner Up (EV/MAU) vs. Group D Winner (Acquisition Value (Attach Rate))


The potential to be a Jekyll and Hyde team that has plagued EV/MAU all through qualifying finally reared its ugly head in the matchup against Acquisition Value (Attach Rate).  EV/MAU were simply outclassed on all fronts by Acquisition Value (Attach Rate)’s ability to holistically value an opportunity.  EV/MAU demonstrated strong user growth in the opening minutes but could not sustain the traction and growth needed to compete with the stronger side that was Acquisition Value (Attach Rate).  The game ended in a route similar to Germany’s embarrassment of Brazil in Belo Horizonte today…


Acquisition Value (Attach Rate) 6 : 0 EV/MAU