Yay! Venturebeat recently announced that they had acquired Tradevibes, a crowd-sourced web site of company information, for an undisclosed sum. A huge victory for Venturebeat, as the acquisition of crowd-sourced company information is a key strategy for success in the modern economy by any company. Surely Venturebeat is just one good acquisition away (hint, hint) from dominating the tech news market.
Tradevibes is an interesting company. Great pedigree: 4 paypal guys raise $900k from Ron Conway and Dave McClure, some of the best angels out there. They blew past 10,000 companies in the database a year ago and I eyeball that they probably have more than 20,000 companies in their database today. Is the data good? I checked out Facebook:
- Mark Zuckerberg, Founder & CEO [x]
- Dustin Moskovitz, Co-founder & VP of Engineering [x]
- Owen Van Natta, Chief Revenue Officer, VP of Operations [x]
- Matt Kohler, VP Strategy & Business Operations [x]
- Chamath Palihapitiya, VP of Marketing & Operations [x]
- Gideon Yu, CFO [x]
- Sheryl Sandberg, COO [x]
- Jonathan Heiliger, VP of Technical Operations [x]
- Elliott Schrage, VP Global Communications & Public Affairs [x]
- David Fischer, VP Online Sales & Operations [x]
- Christopher Kelly, General Counsel [x]
- Ben Ling, SVP Development
A lot of those people are gone. Dustin is gone, Owen is gone, Chamath is gone, Gideon is gone and Ben is gone. And those are just the ones I know about, and I know nothing about Facebook.
Obviously, I live in a glass house, so I won’t be throwing stones, but the data is certainly no better than ours and in many cases sparser. The page was viewed 50,000 times and has 100 edits. The most recent edit was 9/30/2009, so you have to like that it was edited recently – although many obvious errors were not corrected. 1 in 500 users makes an edit, which seems realistic.
On Cogmap, Facebook has had more than 3,000 views and has 20 edits, so we are getting edits about every 60 views. A more engaged community? Hard to say, we have fewer maps: Slightly more than 7,000. It would be interesting to compare their most popular companies and our most popular maps head-to-head, or global site activity, however we don’t have that data.
Anyway, enough head-to-head battles, let’s talk about the transaction: I bet it went poorly for Tradevibes. VentureBeat has raised $300k in capital and doesn’t seem like it is awash in cash, so it is unlikely that Tradevibes saw the kind of exit that returns 10x to the investors. Certainly, VentureBeat probably doesn’t have a plan to use Tradevibes in a way that generates the kind of value that would justify a 10x payout.
Did Ron and Dave get out with their initial investment? I bet they did not get out at all. I wonder if they realized Tradevibes was not working out and simply became investors in VentureBeat. I checked LinkedIn in an effort to discover if the Tradevibes founders had stuck around. All I was able to find was that Peter Chu, the CTO, left a year ago. I had heard that Tradevibes was struggling, that is more evidence that the business was going sideways.
One of the funny exercises in small companies selling out to other small companies is that, if it is not an all cash transaction, it is not simply about valuing Tradevibes – it is about valuing VentureBeat. Assuming VentureBeat was not going to write a check for more than a million dollars (probably the only scenario where the investors get out whole), they took some cash and some stock – probably more stock. If they took stock, then the question you wonder is how VentureBeat was valued relative to Tradevibes.
Here at Cogmap, we look forward to working with Matt and the VentureBeat team – or anyone that wants to crush them. We love business development deals!