Private Equity’s “Waiting for Godot”, Things Haven’t Really Changed Much

First off this post isn’t a general slam on all private equity investors as there are lots of folks in the industry that I know and highly respect.  

As some of you know, I recently closed AdPassage Inc., a company officially started back in May of 2008 to help video publishers classify their content for better ad targeting, to more easily package for syndication, and to make the content more addressable on their web sites.  After 18 months, we were not able to adequately validate the model and had not reached the milestones necessary to secure a follow-on round of financing.

So imagine my surprise when yesterday, almost three months after closing the biz, I received the following email sent to our former VP of Technology (the names have been removed to protect the innocent (in the case of our VP of Tech) and the rudderless (in the case of the Associate from the Private Equity fund ;):

——-

[VP of Technology],

Hope you are doing well and my apologies for the unsolicited email – I am writing to introduce my firm, North Bridge, a venture capital/private equity firm based in the Boston area.  We’ve learned about AdPassage through our research in identifying the most promising and rapidly growing technology-enabled companies for prospective investment and partnerships, and thought it made sense to connect. 

To give you a brief introduction on North Bridge, we manage $3.2 billion in total capital.  While traditionally known as a leading early-stage venture capital fund, in 2007 North Bridge raised a $545 million growth equity fund focused on making investments ranging in size from $15 million to $75 million in growing, profitable technology and technology-enabled businesses with revenue greater than $15 million.  This is the investment team that I am a part of, although we liaise frequently with our colleagues at North Bridge Venture Partners (who will look at businesses starting at the pre-revenue stage).  In North Bridge’s growth equity investments, our capital is intended to provide shareholder liquidity, accelerate growth and/or fund acquisitions.  We are comfortable being either a minority partner or a controlling shareholder through our investments, typically join the board of directors in connection with an investment, and take an active role in partnering with management to shape strategy and grow the company.  Our team spent several years leading firms such as SAP (one of our founders was the co-founder of SAP America), Advent International, Apax Partners, Alta Communications, Pequot Capital, Summit Partners, and TA Associates and has deep experience investing in and founding/running technology-enabled businesses across multiple sectors and stages.

Please let me know if there is a good time for us to connect in the upcoming weeks to introduce you to North Bridge and see if we can be helpful.  I look forward to speaking with you and thank you in advance for your time. 

Regards,

[Associate]


[Full Associate Name]

North Bridge Growth Equity

950 Winter Street, Suite 4600

Waltham, MA 02451

——-

While honest mistakes happen here are a few items that stand out.  First off, AdPassage isn’t a common name nor one found anywhere but associated with our company. We may have a had a total of two items (if that) ever written about us beyond our blog, our web site, and my entry of our company info into Linkedin and Crunchbase.  Our company was closed in January of 2010 after suspending operations in the middle of December of 2009.  We were pre-revenue and just about to start on trials with two significant prospects.  I could almost understand this note from this… dare I say… reputable firm if it had come from the venture capital side of their organization, but it didn’t, this was from their “growth equity fund focused on making investments ranging in size from $15 million to $75 million in growing, profitable technology and technology-enabled businesses with revenue greater than $15 million“.  Yikes!!!  At this point, you really have to ask yourself what sort of due-diligence got done here for us to even make it on to their radar.  Here’s my other favorite line, “We’ve learned about AdPassage through our research in identifying the most promising and rapidly growing technology-enabled companies for prospective investment and partnerships“.  Wha-wha-what?!  Did they know something we didn’t?  More importantly, do any of the investors in that fund know how this group goes about identifying investment opportunities?  This is the sort of pitch I expect where someone’s trying to pitch me to invest in something, not where they’re pitching me to discuss my own investment opportunity with them.

I did go to their Web site to find that the Associate indeed works there, and from the summary of their qualifications, seemed to be pretty good.  So what gives?  Perhaps I’m overreacting and am letting my left-brain react to this incident with a righteous attitude, but in this climate of careless investing and a need for more attention to details, I felt that this was a perfect of example that while things seem to have changed a bit, they really haven’t changed that much.  Some still haven’t learned a thing from the economic debacle we’ve just been through.  Perhaps Boston firms are just more desperate.  I don’t know.  Guess it’s time to respond to that Associate with a note on a special offer, if they act now on the AdPassage investment opportunity I’ll thrown in a nice shiny bridge in New York as an added bonus 🙂

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