Private Company Valuations: Ning, Inc.

Posted By Justin Byers, Lead Business Intelligence Analyst on September 23, 2009

There has be en a large amount of money raised by companies that operate online social networking sites. One of those companies is Ning, Inc. This company has received over $100 MM in funding over the last two years. This week we are going to take a look at their most recent round of funding that was closed in July 2009.

Ning, Inc. (formerly known as 24HL, Inc.) is headquartered in Palo Alto, California. The company operates an online social networking site and provides online users free services that help them create, customize, and share their own social network. These free services offered by Ning allow the users to customize and brand their social network as their own.

The company closed on a $15 MM Series E round of financing in July 2009. This round was noted to be led by Lightspeed Venture Partners. T he Deal Terms of this round were :

We would consider these deal terms as fairly “company-friendly”, and it was interesting the way the Liquidation Preferences for the Series E Preferred were explained in the Restated Certificate.

The Liquidation Preference was spilt into three parts, where the Series E Preferred could receive :

1. the difference between the Series E original issue price and the Series D original issue price
2. if there were any remaining assets or funds, they could then receive the difference between the Series D original issue price and the Series C original issue price, along side the Series D
3. if there were any assets or funds remaining, they w ould then receive the sum of the Series C original issue price, along side any series of Preferred Stock

Overall, after applying the three parts to the Series E Preferred , they could receive an amount equal to a 1x Liquidation Preference based on the Series E Preferred original issue price.

Implied Valuation Ticker*

Implied Valuation Ticker*

The Valuation Ticker is a venture capital valuation tracking tool that utilizes the average daily close prices of public companies in particular industries. Each of these companies received venture capital or private equity funding prior to their IPO.

Utilizing averages from 1999 to present, these daily figures are then applied to the most recent post-money valuation of a private, venture-backed company within the same industry, as calculated by VC Experts, to simulate the movement of that company’s valuation on a daily basis.

Additional data is utilized as a comparative measure, including the NASDAQ and S&P 500 indexes. With this tool, VCs, hedge fund managers, investment bankers and other investor groups can create a bucket of comparable analysis, as well as determine potential entry points when to go public.

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