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….

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


Round of the Week – SpotHero


For all you parking “tributes” out there, SpotHero’s $4.5M Series A round will forever put the odds in your favor.  This On-Demand parking reservation company has the potential to revolutionize the antiquated parking garage business and as frequent drivers ourselves, we love the idea!

Name: SpotHero


Funding to Date: $7.5M ($3M Seed, $4.5M Angel)

Deal Notables: SpotHero came out of Chicago’s Excelerate Labs/TechStars accelerator program and pivoted from a simple parking for Cubs games solution to the form they are today.  We love reading stories about successful accelerator graduates that originally started with a concept and then pivoted to find better product-market fit. Somewhere Eric Ries is smiling

Term Sheet Madness – Palo Alto Finals

The Regional Finals are upon us!  See here for Term Sheet Central and here for Palo Alto Round 1!

1. Price (Valuation) vs. 2. Pay to Play


Price (Valuation): The amount of funding received in the round.  Can be referred to in aggregate ($40M) or price per share ($6/Share). This can be used to determine pre/post money valuation.

Pay to Play: Investors will have the option to purchase their “pro rata” share in a future financing (i.e. Right of First Refusal), but if they choose not to participate (Pay), the remainder of their allotment of ownership will be converted from preferred to common stock (preventing them to Play).

C:V.’s Chief Term-ologist’s Take: Price looks to continue its hot streak in this competition but will be met with resistance by Pay to Play.  In the end, we feel that Price should be able to advance on its ability to heavily impact all future rounds of a firm even though Pay to Play’s ability to allow only the truly committed investors to remain preferred shareholders should not be forgotten.

Outcome: Price advances to the Term Sheet Madness Finals!  Get the scissors out! (Well, in this tournament, it’s probably more fitting to break out the pen/DocuSign link…)

VC Spotlight of the Week – Jeff Bussgang

Entrepreneur, Author, Professor, and VC.  Not a bad background if you ask us. Jeff is our first “Quadruple-threat” we have featured and his book Mastering the VC Game is an ABSOLUTE must read for anyone in/looking to get into startupland/VC and required reading here at C:V.

Name: Jeff Bussgangbussgang

Company: Flybridge Capital Partners

Blog:  Seeing Both Sides (One of our liked blogs!)

Bio: Jeff is a “double-Crimson” with both a B.A. and M.B.A. from Harvard and is a former entrepreneur (Upromise, Open Market) turned VC. He is also a guest lecturer at Harvard as well (so maybe he is a “triple-Crimson”?).  Full background here!

Miscellaneous/Interesting Facts: We mentioned it above, but it is worth mentioning again, if you haven’t ordered his book already, stop everything and go get it!  This is right up there with Venture Deals in terms of C:V. favorites.



Answering the Million Dollar Question: How Do You Scale?


You’ve raised some money (or if you’re really lean, you’ve bootstrapped) and you’ve found Product/Market Fit in a growing and disruptive market. Now the big question is how do you attack that market and take share? In other words, how do you scale?

Scaling the business is a pivotal undertaking in a startup’s life and while we do not have direct experience scaling an enterprise here at C:V., we do have experience supporting some of enterprise technology’s most successful sales teams and have offered our input on how large company sales tactics can apply to a startup looking to scale.

*Editor’s Note: This post will feature examples tailored for larger deals and longer sales cycles as that is our background. While the specifics may not necessarily relate, we hope the concepts will.

Demonstrate your Value:  Most posts about scale would simply say “Sell, Sell, Sell!” and while we are not discounting that method at all here at C:V., we believe that the Enterprise Technology sales model is shifting from a need-based, “point and purchase” model and moving towards a more consultative, “solution selling” approach.  Therefore, we believe that in order to scale effectively, a salesforce must not only know what problems they currently solve but also how they can add value across a range of outcomes to successfully partner with their client and not just provide a resource.

Partner:  The decision to become a multi-channel salesforce is one that can be challenging to startups looking to scale because concerns over quality of service may arise (i.e. fear the Partner may not know the product as well, or will not offer the “White Glove” support we do) when dealing with an indirect sales model as opposed to a direct only salesforce that most startups employ at the outset of their life.  While this is a valid concern and a company must address this issue before deciding to Partner, we do believe that properly structured strategic partnerships (i.e. teaming up with larger players in your industry) can be an extremely effective way for smaller companies to scale their offerings quickly and efficiently.  In addition to getting your product into the minds and hands of more customers, partnerships can also offer an additional level of credibility to your company vision that can help you get those “Lighthouse” customers that all companies crave.

Get a “Lighthouse” Customer: Much like an Anchor store is to a mall, getting a few big name customers is a huge benefit for a company trying to scale.  Having these “beacons” (hence the lighthouse name…) of support for your product and company can be a huge asset and will draw other ships to your company’s shore (still staying nautical…).  You can use these customers as testaments to your product and vision as well as a reference to future prospective customers.  Just think of how much more serious a prospective client will take you if you can say your offering is currently in use in 5 of the Fortune 50…

P.O.C.:  The Proof Of Concept or “P.O.C.” is a time-tested model that initially does not provide revenue, but gets your offering into the hands of customers with the idea that if they like it they will buy it later.  This “trial period” model, can be very effective when trying to land that “Lighthouse” customer when they are still hesitant to buy even after you have “Demonstrated your Value”.  Also, the P.O.C. method can be a very effective way to reach a huge subset of your customer base relatively cheaply, and as long as you convert a large percentage of these opportunities, it can become a very viable model to grow the enterprise.

Find the RIGHT Champion:  We hear about a lot of deals being lost because the account manager has not lined up the proper Champion in the business and as a result cannot get the sign off on funding or approval from the CIO.  The Champion is a huge asset to your sales process as they are the person at the prospective client’s company who will be spearheading the initiative internally. The key is to find the RIGHT champion for your product in the prospective client’s organization. Find the person who can be what their nickname describes, the CHAMPION of your product who not only buys into your value proposition, but also has the ability to maneuver the deal to the appropriate levels of management within the organization.  This is obviously easier said than done, but through the correct “Demonstration of Value”, you should be able to find the right match. The reason the RIGHT Champion is so important is that it will allow you to establish a network within the client organization as well as provide a platform for future opportunity (upgrades, other solutions, etc.).


Round of the Week – SoFi

Student Loans from Select Colleges and Universities + Lower Rates than Sallie Mae + Social Community with Alumni support = SoFi

SoFi or Social Finance has followed the above equation and found great success in the Student Loan refinancing market. As a result, they have raised yet another $80M in a C round to expand their footprint and dive into other loan markets.

Name: SoFi


Funding to Date: $161M Equity, ~$400M Debt (Full Details here)

Deal Notables: Part of this funding will be for SoFi’s first foray out of the student loan business and into other lending verticals (mortgages, etc.).  This could be a daunting task for most startups for fear of growing too big too quick, but given SoFi’s track record of successful loan refinancing with a committed investor and applicant base, we see them having a strong case for exploring expansion.

This round was for preferred equity (we presume) but SoFi is the first company we have featured here on C:V. that has debt (And a large chunk of it!).  There does not appear to be any additional debt raised in this funding, but we do admire the fact that SoFi can play in both markets simultaneously so effectively.  Check out the piece in Time on them too!  Great read about how they are transforming the lending industry.

VC Spotlight of the Week – David Cowan

When 3 of the top tabs on a VC’s blog are Startups, Security, and Ted Talks, C:V. is bound to take notice. That is exactly what happened in this week’s VC Spotlight on David Cowan (well, that and he is one of the most well-respected internet/security investors of the past two decades…).

Name: David Cowandavid cowan

Company: Bessemer Venture Partners

Blog: Who Has Time For This? (One of our liked blogs!)

Bio: David has both a BA and an MBA from Harvard and has been investing since 1992. He has quite an impressive track record of investments and IPO’ s which you can read about here.

Miscellaneous/Interesting Facts: We are avid TED talk fans here at C:V. and if you haven’t watched any of them, we highly recommend it! David skyrocketed in our book as he has attended 8 TED events and has also rated his top talks of the past few years.  Totally C:V. approved!

Term Sheet Madness – Denver Round 1

The Madness continues! Look here for Original Posthere for Full Field, and here for Palo Alto Regional!

1. Board of Directors vs. 4. No-Shop Agreement


Board of Directors: One of the biggest control mechanisms and defining aspects of the company.  The Board of Directors is the management team that sets direction and helps the company achieve their vision.

No-Shop Agreement: The term sheet equivalent of monogamy, the No-Shop Agreement essentially makes it very difficult to field other offers when you are in the final stages of a financing.

C:V.’s Chief Term-ologist’s Take:  Term sheet monogamy is important and all and while we hope No Shops would only be broken for a can’t miss deal, Board of Directors is a powerhouse in the control field.  They advise, direct, mentor, and shape the direction of the company.

Outcome: The Board advances (unanimously)


2. Vesting vs. 3. Protective Provisions


Vesting: The time period and speed at which you earn your equity in the company.  Simple in theory, huge implications in practice.

  • Example: If you have a 4 year vesting schedule at 25% a year on 100 shares, you will get 25 shares a year for 4 years.  If you leave after 2 years, you get 50 shares and 50 shares is “left on the table” unvested.

Protective Provisions: Essentially veto power, Protective Provisions are a list of company events (issuing shares, raising debt, selling the company, etc.) that the investors can vote to stop from happening. Depending on severity, this list of events can cause some serious control issues in a company.

C:V.’s Chief Term-ologist’s Take:  A battle of two of the stronger Economics and Control provisions in the field, we see this going down to the wire.  Vesting can have such profound impacts on employee performance (re: Worst Case = feeling of indentured servitude for life of vesting schedule)  yet Protective Provisions, if severe enough, can effectively stop the company from doing anything.  Now obviously we here at C:V. always hope for the best and would hope that vesting would be reasonable given the company stage and protective provisions would include materiality thresholds to allow for certain business measures to be enacted, but even still there is no clear-cut winner in this round.

Outcome: In a double-OT thriller, Vesting survives to advance to the finals to play the Board.

Monday Morning Memo


Hi-Tech Company revenue graph within the Quarter? Possibly, Yes.  C:V. posting cadence last week? Definitely!

Recap of Last Week:

We had the first regionals in Term Sheet Madness, our first “couple” VC spotlight on Fred and Joanne Wilson, Actifio got round of the week, and we provided some insight into what we consider to be a successful current investment via DocuSign.

What Lies Ahead:

This week we will have a VC Spotlight, Round of the Week, and a lot of Term Sheet Madness!!