The Private Equity Data Center Buzz

Private Company Valuations: Alvine Pharmaceuticals, Inc.

Sun, 04 Oct 2009 00:00:00 +0000

Recently we have seen various reports released that discuss VC funding numbers for Q3 2009. One of the industries that continued to be at the top of the list with VC funding is Biotechnology. This week we are going to take a look at one of those Biotechnology companies that received some additional funding last quarter.

Alvine Pharmaceuticals, Inc is headquartered in San Carlos, California. The company develops therapeutics and diagnostics for Celiac disease and raised a Series A2 round last quarter, bringing in an additional $8.5 MM. Participating in this round were Sofinnova Ventures, Flagship Ventures, InterWest Partners, Prospect Venture Partners, and Panorama Capital.

Deal Terms and Returns: Antidilution Protection

Thu, 29 Oct 2009 00:00:00 +0000

This week we are going to take another look at how terms can affect returns. What if your company had raised $7MM in Series A and Series B rounds , but now you are looking to raise one last round. The problem is that this round will be a "Down Round" priced at $.75 per share as compared to the previous Series B round price of $2. So what would the effect be of Weighted Average Anti-Dilution vs. Full Ratchet Anti-Dilution for the founders and investors?

Private Company Investments: FourSquare Labs, Inc.

Thu, 22 Oct 2009 00:00:00 +0000

We have covered many of the up and coming or already "here" companies that provide social networking. One of the newest that has recently launched is not from California, yet rather they call the East Coast home. This week we are going to take a look at the first round of financing announced for FourSquare Labs, Inc.

FourSquare Labs, Inc. is headquartered in New York, NY. The company provides online mobile social networking services by using LBS (Location Based Service) application technology that allows users to receive information and entertainment services via mobile devices through a mobile network. The company recently just closed on a Series A round for just shy of $1.5 MM. Some of those participating in this round were Union Square Ventures and O'Reilly AlphaTech Ventures.

Deal Terms and Their Impact on Returns, Part 2

Wed, 14 Oct 2009 00:00:00 +0000

Last week we discussed the impact that the Deal Terms have on Returns, and how tweaking some of them might help in negotiating a new round of capital. This is something that could be applied to both sides of the table. We previously showed how the Return would react when the Participation Cap is changed from 0 to 3x. This week we are going to look at a different term, the Liquidation Multiple, and see how it can affect the return.

Deal Terms and Their Impact on Returns

Wed, 07 Oct 2009 00:00:00 +0000

As we have been demonstrating our new Portfolio Analysis Tool over the past couple of months, we have run into people from all sides of the business that have never really taken notice on how just one or two slight changes to the Deal Terms could effect their return. When it comes to negotiating a deal, both sides of the table are weighing the risks for the greatest return. We have heard some say that they did not take on funding due to they could not come to an agreement on the valuation. What if you could tweak one or two terms in the offer and keep the valuation, but still accomplish what you are trying to do? At the end of the day, everyone could go home happy...at least for now. The Deal Terms are what determine who gets what and how much. Just because you are putting in enough to gain a certain percentage of the company doesn't necessarily mean that your return will reflect the same. What about all of the preferences (if any) that are in front of you? Using our new Portfolio Analysis Tool, we are able to show a small example of what tweaking terms might look like. This is old news to many, but it helps to get a refresher every now and then, and seeing this in a graphical representation helps bring a new light on things.

Private Company Valuations: Twitter, Inc.

Wed, 30 Sep 2009 00:00:00 +0000

There has been a lot of news lately concerning Twitter, Inc. and their most recent round of financing , along with their new $1 BB valuation. We have had numerous inquiries from various media outlets seeking additional details on this latest round. There was one article by Bernard Lunn at ReadWriteWeb that was particularly interesting.

This week we are going to take a look at all of the financing rounds that Twitter, Inc. has completed thus far.

Twitter, Inc., located in San Francisco, is a short messaging service that allows users to post everything from what they are doing to the latest breaking news. (You might even find this PEDC Buzz on Twitter.) As mentioned, the company recently announced a closing of a Series E round of financing at a reported amount of $100 MM. Based on information posted on the company website, the company publicly thanked investors Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, and Morgan Stanley.

Private Company Valuations: Ning, Inc.

Wed, 23 Sep 2009 00:00:00 +0000

There has be en a large amount of money raised by companies that operate online social networking sites. One of those companies is Ning, Inc. This company has received over $100 MM in funding over the last two years. This week we are going to take a look at their most recent round of funding that was closed in July 2009.

Ning, Inc. (formerly known as 24HL, Inc.) is headquartered in Palo Alto, California. The company operates an online social networking site and provides online users free services that help them create, customize, and share their own social network. These free services offered by Ning allow the users to customize and brand their social network as their own.

The company closed on a $15 MM Series E round of financing in July 2009. This round was noted to be led by Lightspeed Venture Partners.

Private Company Valuations: Brightcove, Inc.

Thu, 17 Sep 2009 00:00:00 +0000

There were several media outlets reporting on a possible acquisition of Brightcove, Inc. by Google. The deal is reportedly valued somewhere between $500 to $700 MM. We thought we would take a look at the last activity by Brightcove and also at the last Post-Money valuation that we calculated.

Brightcove, Inc. is headquartered in Cambridge, Massachusetts. The company provides services and products to assist professionals in publishing and distributing online video. They are an online based distribution channel for television products. The company broke into the Japanese market in mid-2008 with $4.9 MM in new investments from market-leading partners in Japan that consisted of Dentsu, Inc, J-Stream, Inc., transcosmos, Inc., and Cyber Communications, Inc.

A123 Systems, Inc. - Terms for Potential IPO

Wed, 09 Sep 2009 00:00:00 +0000

A123 Systems, Inc. was founded in 2001 and is based out of Watertown, Massachusetts. The company develops and supplies lithium-ion batteries using a proprietary Nanophosphate technology that was initially developed at Massachusetts Institute of Technology (MIT).

The company filed an Amended S-1 yesterday, 09/09/09, setting its terms for a potential IPO. The terms were for the offering of just over 25 MM shares of common at a price between $8.50 and $9.50 per share. It is planning to trade on the NASDAQ under the ticker AONE, and has Goldman Sachs and Morgan Stanley serving as co-lead underwriters. The company originally filed an S-1 on 08/08/08, and so far they have raised over $300 MM in VC funding. There have been many investors in past rounds including North Bridge Venture Partners, GE Equity, CMEA Ventures, Motorola Ventures, Sequoia Capital, Qualcomm Ventures, AllianceBernstein Ventures, The Procter & Gamble Company, OnPoint Technologies, FA Technology Ventures, and YankeeTek Incubator Fund.

When reviewing an S-1 filing, there are many interesting facts revealed, such as the financials and the "Risk Factors". The financials give the potential investors a look at the inner workings of the operation from a capital standpoint. One will run across interesting statements such as, "We have had a history of losses, and we may be unable to achieve or sustain profitability." There are numerous vital details revealed, as there should be in any early prospectus. There was a mention of how they have experienced rapid growth in a short period, "We have experienced rapid growth in recent periods. If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately." The growth was expressed as an increase of revenue from $34.3 MM in 2006 to $68.5 MM in 2008, also as an increase in the number of full-time employees from 227 as of 12/31/06 to 1,672 as of 08/31/09. There are also statements that discuss how the demand for the lithium battery for transportation uses will be based on the pricing and dependence of fossil fuels.

If you haven't already, you can view our previous coverage of A123 Systems, Inc. that was prior to their 08/08/08 filing, and you can view their latest S-1 filing at the SEC website.

Private Company Valuations: Mint Software, Inc.

Wed, 02 Sep 2009 00:00:00 +0000

In the past we've covered various companies that are providing online financial services, and this week we are going to follow up on one that has been getting quite a bit of attention. Mint Software, Inc. recently closed on additional funds that had a significant impact on their valuation and total funding amount.

Mint Software is headquartered in Mountain View, California, and the company provides an online suite of personal finance management solutions. The company's web-based platform, Mint, is connected to thousands of financial institutions which provide daily updated account information to the users. The company recently closed on a Series C round of financing, bringing in approximately $14 MM.