Tag Archives: VC

Round of the Week – Spritz

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Pretty neat how this actually works without giving us a headache…

spritz

Finally coming out of stealth this week, Boston based speed-reading technology company Spritz has raised a $3.5M Seed round.   Check out the technology behind the faster reading tool here.  They plan to license their technology to app and web developers, which should be a good way to test new channels indirectly and inexpensively (free downstream R&D!).

Given that Spritz has the ability to disrupt so many MASSIVE markets (Email, Education, Business, etc.), we wonder if they are only using the licensing model initially for feedback loops to find product-market fit and then will pivot to a more vertical approach?  Either way, it will be fun to read about what happens (hopefully much faster than average!)

Name: Spritz

Website: http://www.spritzinc.com/

Funding to Date: $3.5M Seed

Deal Notables:  This was a tranched deal ($1M, $2.5M).  When we see tranches, we see it as our duty to at least guess what the terms of it were…

C:V.’s guess:  Initial funding went for development and since they are all about User adoption, we think they hit their User growth goal which triggered the final piece. Simple. Actionable. Desirable for all.

VC Spotlight of the Week – Bill Gurley

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Bill is a partner at Benchmark Capital and has both a technical and a Wall Street background (dual threat!).  He won our VC Spotlight award this week due to his intriguing background and his recent post about Uber’s dynamic pricing strategy. We are huge fans of Uber as is, but anyone that uses Supply and Demand curves and actually references Elasticity in a blog post is bound to grab our interest!

Name: Bill Gurleygurley-headshot

Company: Benchmark Capital (Links to their Twitter, since their website left something to be desired…)

Blog:  Above the Crowd (One of our liked blogs!)

Bio: A former engineer at Compaq and Wall Street research analyst, Bill has been an active VC for years serving on many boards. Some of his current investments/seats include:  Uber, GrubHub, and Zillow.

Miscellaneous/Interesting Facts: Bill is our most decorated VC featured so far as he has a Computer Science degree, a MBA, and is a CFA charterholder.

Monday Morning Memo

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daylight savings

Good (feels extra early) Morning from C:V. HQ!  We hope you have survived the annual “Spring Ahead” daylight savings switch and what better way to kick-start your week into gear than with an all new Monday Morning Memo!

Recap of Last Week:

Last week we had Brad Feld as our VC spotlight, DocuSign as our Round of the Week and we also did a feature piece on Enterprise Security while channeling our inner Zoolander.

What Lies Ahead:

This week you can expect a VC spotlight, a round of the week, and our first valuation attempt.  We may also add in a book review and we have a “March Madness” themed surprise starting the following week, so stay tuned!

Round of the Week – DocuSign

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And the award for the most crowded Cap Table of the week goes to…

crowded table

DocuSign board meeting?

Electronic signature platform DocuSign raised a whopping $85M this week (rumored at a valuation of $1.6B) to expand growth and innovation. This brings their total funding to $210M and their investor count to about the same… Seriously though, they did not name the investors this round, but according to their Crunchbase profile, they have at least 10 different investors in the round (holy syndicate Batman!).  What we would give to see the evolution of the Cap Table since inception…

Name: DocuSign

Website: https://www.docusign.com/

Funding to Date: $210M (reports vary, but had main rounds of $27M, $55M, and $85M among other smaller ones)

Deal Notables:  CFO Mike Dinsdale is on record as saying they are not a takeover target but rather an IPO candidate.  He claimed they couldn’t be valued properly because they span so many verticals. He definitely has a point given that they have the ability to disrupt almost every market in existence (i.e. anything that requires a signature…). Makes us wonder that if $1.6B was the value for the round, what was the associated TAM for E-signatures and DocuSign’s corresponding market share expectation?  $16B and 10%, $8B and 20%??

VC Spotlight of the Week – Brad Feld

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Brad has been one of our favorite VC’s to follow ever since we stumbled upon his book “Venture Deals”. It is required reading here at C:V. HQ, and we will be featuring it in a book review shortly. Brad is also 1/4th of the Foundry Group, creators of our favorite YouTube video so far:

http://www.youtube.com/watch?v=SKArupEBE6Y

Name: Brad Feldfeld

Company: Foundry Group

Blog: Feld Thoughts  (One of our liked blogs!)

Bio: A longtime investor and entrepreneur, Brad is also an avid blogger on venture capital and startup issues.  He also co-founded TechStars.

Miscellaneous/Interesting Facts: Brad is an avid marathon runner and famously goes “off the grid” for a week each quarter.

Enterprise Security: So Hot Right Now!

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IT Security = Hansel?  We think so!

hansel

With the recent onslaught of Enterprise Security investments (25 in February alone!), we decided to turn to our friends at Crunchbase to see just how hot this market really was.  Let’s just say, the numbers did not disappoint. Below are the key takeaways from the study:

fund8

Rising Round Size:   Average round sizes are up almost 50% since this time last year which we hope translates into companies receiving higher valuations (and not higher founder dilution…).

The Rich Get Richer:  Follow on funding rounds have been increasing in both size and quantity in the past year. This bodes well for the industry because it means more firms are putting good use to earlier rounds and leveraging that success into future investment.

If You Can’t Beat Them, Buy Them:  There have been 10 acquisitions this year alone so there seems to be a theme of consolidation at work (Looking at you Bit9…).

Finally, we couldn’t write an entire piece about Enterprise Security and NOT mention the darling of 2013; FireEye. After their successful IPO last fall and recent purchase of Mandiant (bonus points for it being a majority stock deal and limiting the cash impact!), they have clearly revealed their plans on how to take share in this market.  Now if only they would do the same for profitability…

Monday Morning Memo

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Gooooooood Morning Internet!

Besides channeling our inner Robin Williams, we over here at C:V. HQ are very excited to bring you the 2nd installment of our Monday Morning Memo:

Recap of Last Week:

Last week we featured Ben Horowitz as our VC of the week and also did a spotlight on Shape Security about their funding round and phenomenal management team.

What Lies Ahead:

This week you can expect a VC spotlight, a round of the week, and a piece on the current state of the Enterprise Security market.  We may also add in a book review or even a valuation attempt, so stay tuned!!

Round of the Week – Shape Security

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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!

Monday Morning Memo

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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?

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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.