Endeca (A)
Date: April 4th 2013
To: Michael Goldberg
Subject: Case Write-up #2: Endeca (A)
Executive Summary
Endeca Technologies is a software company that established by Steve Papa on September 4th 2001. In the case, the company is currently looking for a Series C round funding to reduce the expected pre-money valuation multiple times because of the NASDAQ had fallen. In the end, the company got a rough pre-money valuation of $25M. At this time, there are two different term sheets that each of them contains some pros and cons putting in front of Papa to let him choose. Overall, Papa should choose the first term sheet because the benefits in that term sheet are more than the second term sheet, and at the same time it has less cons.
Does Endeca look like a good investment at this time?
Overall, Endeca looks like a risky choice for investors to invest. Since Endeca is a technology software company, this industry is very competitive and intensive; everyday there are new firms emerge in this industry with new technologies and ideas. At the beginning, Endeca planed to make a Series C round funding in around November and Decemeber in 2000. However, because of the NASDAQ was falling, the CEO Papa realized that raising funding at that time was vey hard. Thus, Papa extended the funds from Series B to an extra six months. Papa’s action gave many other firms to have the chances to catch up and build up their technologies and management strategies. Thus after this six-months delay, Endeca needs to put in more effort to gain back its market status.
What are the motivations for BVP and Venrock? Ampersand?
Bessemer Venture Partners and Venrock invested in the second round on Endeca. Because Papa had connections with Venrock, where he had served a summer internship while at HBS. Papa and Venrock built the good relationship at that time, thus Venrock is willing to invest in Endeca, which is his motivation to invest in the firm.
Ampersand is a new potentially company that
To: Michael Goldberg
Subject: Case Write-up #2: Endeca (A)
Executive Summary
Endeca Technologies is a software company that established by Steve Papa on September 4th 2001. In the case, the company is currently looking for a Series C round funding to reduce the expected pre-money valuation multiple times because of the NASDAQ had fallen. In the end, the company got a rough pre-money valuation of $25M. At this time, there are two different term sheets that each of them contains some pros and cons putting in front of Papa to let him choose. Overall, Papa should choose the first term sheet because the benefits in that term sheet are more than the second term sheet, and at the same time it has less cons.
Does Endeca look like a good investment at this time?
Overall, Endeca looks like a risky choice for investors to invest. Since Endeca is a technology software company, this industry is very competitive and intensive; everyday there are new firms emerge in this industry with new technologies and ideas. At the beginning, Endeca planed to make a Series C round funding in around November and Decemeber in 2000. However, because of the NASDAQ was falling, the CEO Papa realized that raising funding at that time was vey hard. Thus, Papa extended the funds from Series B to an extra six months. Papa’s action gave many other firms to have the chances to catch up and build up their technologies and management strategies. Thus after this six-months delay, Endeca needs to put in more effort to gain back its market status.
What are the motivations for BVP and Venrock? Ampersand?
Bessemer Venture Partners and Venrock invested in the second round on Endeca. Because Papa had connections with Venrock, where he had served a summer internship while at HBS. Papa and Venrock built the good relationship at that time, thus Venrock is willing to invest in Endeca, which is his motivation to invest in the firm.
Ampersand is a new potentially company that