Subject: Fwd: Man Crates: Dead
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Tue, 30 Sep 2014 17:24:16 -0400

Key words:  “Box of Crap"

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked]
P Consider the environment before printing this email.

Begin forwarded message:

> From: John DeLoche <[email-masked]>
> Subject: Man Crates: Dead
> Date: September 30, 2014 at 4:37:54 PM EDT
> To: Hunter Biden <[email-masked]>, Devon Archer <[email-masked]>, Rob Walker <[email-masked]>, Neil Callahan <[email-masked]>, Eric Schwerin <[email-masked]>
> Cc: William Lee <[email-masked]>
> 
> Gents,
> 
> Just wanted to update you that we turned down Man Crates today for the following reasons:
> 
> --Deal did not meet our minimum $5 million trailing revenue criteria, they were close though at $4.5mm
> --Deal was priced for perfection at 4x trailing revenue
> --Huge seasonality in the business with NOvember and December representing 60% of projected revenue for the year
> --No real technology barriers to entry--a purely execution business
> --We talked to an ecommerce expert at Amazon who referred to this as a "box of crap" business model
> --Unclear if the business can scale significantly to achieve our minimum 3x return profile--essentially a low end "hits driven business" 
> --Investment would go to buy inventory that may or may not be sold--an industry downturn would disproportionately impact their business
> --Not obvious how our business development expertise could help mitigate the factors above
> 
> Thanks all for the work on this one and it feels like we reached the right answer. 
> 
> Best,
> 
> John
> 
> 
> 
> 
> John DeLoche
> Co-founder and Managing Director
> Rosemont Seneca Technology Partners
> 333 Bush Street, 21st Floor
> San Francisco, CA 94104
> office: 415 767 1288
> mobile: 415 793 7070 
> 
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