TCV Responds

Interesting, I just got an email from Cece Lee at Blanc & Otis regarding my post yesterday about TCV investing in both Gator Claria and Webroot. I have posted the email in it's entirety below.

Positive:
- it's personal and non-aggressive
- demonstrates that someone is watching what people write about in blogs (cool)
- quick turnaround, I wrote about this thing yesterday and she was on it today

Negatives:
- an official statement is, well, an "official statement"

I know how investment funds work, there is really nothing wrong or inappropriate about a fund investing in 2 companies that are as divergent as Webroot and Gator Claria. There's also nothing wrong with simply saying you invested in one company and that led you to identify an opportunity on the other side. I do think that TCV walked into this when they banished Gator Claria from their website, you can't erase your past in this business.

And for the record, I'm not at all "interested" in the relationship that TCV has with these companies, it was just something to write about yesterday... I move on pretty quickly.

Hello Jeff,

How are you?  We understand that you are interested in TCV and its relationship with both Claria (The Gator Corporation) and Webroot.  I am including an official statement from TCV regarding these relationships below for your reference.

 

Thanks again for your interest in TCV.

Regards,

Cece Lee

Phone: 415-856-5167

 

TCV Statement:

 

TCV’s investments in Webroot Software and Claria are representative of the broad portfolio we hold as a leading provider of growth capital to premier technology companies.

 

We invested in Claria, now a leader in online behavioral marketing, several years ago when the company was The Gator Corporation and played in the e-wallet market. We are not the lead investor, nor do we hold a board position or participate in Claria’s business decisions and have no plans to make further investments.

 

By contrast, we are playing a very active role with Webroot, a leading provider of anti-spyware and security software. We were the lead investor in the company’s round of funding announced in February 2005. We hold two seats on the board of directors and are actively engaged in Webroot’s business. Webroot has a strong management team, solid technology and market leadership position, and we will work diligently to assist the company in achieving its full potential.

 

About Technology Crossover Ventures
Technology Crossover Ventures (TCV), founded in 1995, is a leading provider of growth capital to technology companies, providing funds to expansion, late-stage private, and public companies. TCV employs a crossover investment model, which combines venture capital with public market investing and enables TCV to continue to invest in its portfolio companies at the IPO and beyond. TCV manages over $3.3 billion in assets and has invested in nearly 150 companies, achieving 37 IPOs and 27 other strategic sales or mergers. Leading investments include Actuate, Alteon Websystems, Altiris, CNET, Expedia, InPhonic, Netflix, RealNetworks, Redback Networks, Solect Technology, Webroot and Xylan. TCV has 8 partners and is headquartered in Palo Alto, California. For more information about TCV, visit www.tcv.com.

Comments

[Jim]

ooooooo, very corporate.

"We sell guns to both sides." Duh.

[Ben Edelman]

Here's the problem with TCV's argument:

TCV says they invested in Gator "several years ago when the company was The Gator Corporation and played in the e-wallet market." The suggestion is that Gator's business has changed completely -- that when TCV invested in Gator, Gator was just an e-wallet company, not a spyware/adware company, not a pop-up ad company. (The implication: TCV wouldn't have invested in Gator had TCV known about Gator's monitoring and advertising plans.)

Is it true that Gator's monitoring and advertising weren't known as of 2000? I don't think so. See http://web.archive.org/web/20000229194348/www.gator.com/help/eula.html , archiving Gator's EULA as of February 2000. "Gator.com will seek out high-value offers and great deals from commercial partners that match your interests. Gator.com will provide this Service to you via email or through 'GatorGrams' or another proprietary instrument of Gator.com." Lots of euphemisms here. But the underlying practice is clear: Gator will watch what users do, and show advertisements ("offers") accordingly.

Fact is, TCV invested in Gator at a time when available public information indicated what Gator had in mind. There may or may not be a genuine conflict -- e.g. a PR problem -- between TCV's investment in Gator and its investment in Webroot. But I don't see how TCV can claim that the Gator they invested in wasn't the Gator we all now know. The written record indicates otherwise.