Endeca Case Essay

11075 Words Nov 23rd, 2014 45 Pages
9-802-141
REV: MAY 7, 2003

FELDA HARDYMON JOSH LERNER ANN LEAMON

Endeca Technologies (A)
On September 4, 2001, Steve Papa, CEO and founder of Endeca Technologies, could hear a construction worker nailing a “Commercial Real Estate Available” sign to a building across the street from his Cambridge, MA office. This had become routine, as hundreds of early stage technology companies failed to raise additional growth capital. The words of his Vice President of Marketing, Steve Sayre, warred with the sound of the construction. “I know the board is actively working on the C round,” Sayre said. “We’d better get this funding closed; I don’t think the NASDAQ is going to hold up.” Papa knew that his CFO shared Sayre’s concerns. To an even
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As a hot deal in a hot market, competition among venture capital (VC) firms had driven the pre-money valuation from $17 million to $27 million, with a post-money close at $35 million. Although the Series C round had been slated for November/December 2000, Papa had noted the increasingly difficult financing environment and managed to make his funds last for 18 months, rather than the anticipated 12. The company had hit every milestone on its original plan. Its product had been installed at several marquee customers, including Tower Records and one of the world’s largest asset management companies, and it was about to be in trials at Putnam and a major investment bank—Dean Stanley Goldman Credit Partners (DSGCP). A veritable who’s who of potential customers was seriously considering the technology. Papa expected that $7 million would take his company to break-even,
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Professors Felda Hardymon and Josh Lerner and Senior Research Associate Ann Leamon prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Some names and numbers have been disguised. Copyright © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,

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