Vineyard Networks Testimonial and Case Study Summary
Brent Bolleman from the video below:
"I want to thank you, Basil.
You probably don't realize the significance of the role you played in helping me, and other people on the team, think through a number of issues we might never found a solution to, or spun on for a long time.
I really appreciated the advice you gave us through the whole process, and would be delighted to work with you on something in the future."
If you're interested in more on the Vineyard case study, here's more of the story:
Brent provides a good summary of the pitfalls of VC financing and the exit benefits of capital efficiency.
The company raised about $1.1 million from angels and a regional fund and employed a little over 30 people, all in Kelowna BC.
NRC IRAP also contributed $600k at a critical time in the company's growth.
The company was in the business of "network visibility" (also called deep packet inspection). This is a key element in "traffic shaping" and "net neutrality".
The buyer, Procera, was a potential OEM customer. Their decision was a "build vs buy" decision. Procera brought the conversation around to an acquisition. "That's when we called on you Basil."
We weren't looking at it as "an exit" but as a "merger".
The term sheet (letter of intent) was signed on November 19 and the initial closing target was a very aggressive December 31. Signing was January 7 and the official closing was January 9.
"I realized I was going to have to write off Christmas entirely."
We are very fortunate that the details of this transaction can be disclosed because Procera is a public company and the acquisition was material. The price was $27.4 million.
The recurring revenue run rate was in the $4 million range and the growth rate was around 100% per year.
The most interesting thing about this transaction was the speed and the pressure that put on the exit team.
That required people to be creative and to find solutions much faster.
Cross - border always makes it more challenging because you're dealing with two sets of laws and tax regulations.
The best part of the story is that the company is going to continue to grow in Kelowna. The acquiring CEO wanted it to double in a year.
This transaction gave Vineyard a much broader marketing channel and the cash it needs to grow.
For more on the Vineyard Networks case study, here's an interesting talk by Jason Richards, CEO at one of our Exit Strategies Workshops in Kelowna.