The Cyndx takeover of Ning is a bit of an enigma. I have doubts that an acquisition actually took place. Cyndx is a relatively unknown company with a very small internet footprint (not even a two liner page over a Wikipedia). Most of the information on the company outside of its own website is focused on its founder James McVeigh and his identical twin brother “Jim McVeigh” (if you believe what’s over Crunchbase – more on that in a minute). I’ve learned from the very limited information available that Cyndx is a company that’s in the business of providing services to growth stage companies “seeking capital or strategic opportunity (merger, acquisition, joint venture, licensing or other partnership)”. I’m not sure if Ning fits the category of “growth stage” but we can guess that Ning is most likely seeking capital/investors following the fall of Mode Media. It’s also possible that Ning is trying to make the company look attractive to other companies that may be interested in a partnership or acquisition. That would certainly help explain the recent price hikes. If this theory is true, it could mean that Cyndx has been behind the wheels of Ning for quite some time now and may be the ones behind the very steep price hikes. That’s not good news for the hopeful Ningsters over at creators.ning.com. This is just my theory but I came to these thoughts based on some facts.
Take a look at some of the facts and try to make sense of it yourself.
Cyndx is a holding company for Cyndx Networks LLC and Cyndx Advisors LLC.
According to Cyndx.com:
“Cyndx Advisors LLC provides strategic advisory and capital raising services to both public and private growth companies as well as private funds. Cyndx Advisors is a registered broker-dealer with both the SEC and FINRA.”
“Cyndx Networks is a secure cloud-based platform enabling financial institutions to obtain curated information about institutional investors to enhance their capital and strategic advisory marketing efforts.”
According to Crunchbase, Cyndx raised $500k in its first (and maybe only) funding round on February 13, 2015. That’s a small number compare to Ning’s first round funding of $15M back on January 1st 2005. I’m not sure how much Ning is worth but Cyndx probably can’t afford it but if they can, we know for sure Ning is in dire straits.
Crunchbase is a reputable site but I’m taking the information receive from there with a grain of salt. For one thing, there’s a lot of information on the site that I know for a fact is outdated. Case in point, Ning’s profile on the site makes no reference to the recent developments and still has Mode Media listed as the parent company. Also, I alluded to Cyndex’s founder James McVeigh having an identical twin brother “Jim McVeigh” because of some confusing information on the company’s Crunchbase profile.
James McVeigh is listed as Cyndx’s Founder & CEO and Jim McVeigh is listed as its Co-Founder & CEO. My guess? They’re the same person. James probably prefers to be called “Jim”.
What is CyndX?
Cyndx was founded by veteran telecommunications, media and technology investment banker James P. McVeigh. Over his distinguished career, James experienced first- hand the logistical difficulties attendant with raising capital for private emerging growth companies and the growth and diversification of pools of capital available from traditional VCs to family offices. Determined to leverage the power of technology to bring efficiency to the process and increase the reach of an investment bank’s capital raising abilities, he created Cyndx Holdings LLC. Cyndx Holdings consists primarily of two companies- Cyndx Networks LLC and Cyndx Advisors LLC. Cyndx Networks LLC (“Networks”) licenses to broker dealers a secure web-based data repository that features a proprietary algorithm to mine hundreds of thousands of discrete historical financial transactions in the database to identify a subset of potential institutional investors that have a demonstrated interest in investing in or acquiring certain growth stage companies. Networks uses data that it obtains from 3rd party data provides to recommend to licensors likely investors that they should target. Networks also provides virtual data-room services to afford companies seeking capital or strategic opportunities the ability to upload due diligence materials and communicate directly with institutional investors considering participation in a transaction. Cyndx Advisors LLC (“Advisors”) is a registered broker dealer that provides growth stage companies with access to seasoned, licensed, investment banking professionals to assist in raising capital or providing companies with partners for strategic opportunities. Through a licensing agreement with Networks, investment bankers from Advisors access the Networks database and algo to develop a tailored, targeted group of prospective institutional investors to contact and offer those investors an opportunity to put capital to work. All securities transactions are executed through Advisors, which receives a fee from its corporate clients upon a successful transaction.
How it Works
If you are a company seeking capital or a strategic opportunity for your business (merger, acquisition, joint venture, licensing or other partnership), you’ll engage the investment banking entity like Cyndx Advisors LLC or another registered broker-dealer that has a license agreement with Cyndx Networks. The investment banking team assigned to your transaction will prepare you for your forthcoming deal, including reviewing and providing assistance with the preparation of financial models and the collection and collation of information materials. Through an inter-company software license with Networks, the investment bankers will have access to hundreds of thousands of discrete historical financial transactions and the Networks algorithm. Armed with these tools, investment bankers identify a subset of institutional investors that have historically invested in or acquired companies like yours. The investment banking team will review the preliminary subset of institutional investors recommended by the Networks algorithm and amend it according to criteria derived from its collective experience and expertise. The investment banking team shares the preliminary list of institutional investors with your senior management team for them to review and approve. If the management team don’t want a particular institutional or corporate investor knowing that the company is in the market seeking capital, that investor or corporate won’t be shown the deal or given access to the data-room. The potential corporate issuer has transparency and control in the process on a real-time basis. After the review process the investment bankers begin the marketing process with a tailored, targeted list of prospective investors with a demonstrated interest in investing in companies like the one entering the market.
For Institutional Investors
If you are an institutional investor seeking to make investments, and your firm has previously publicly disclosed your investments in private companies or a particular sector or if you have a previous relationship with a company seeking capital’s management or Board of Directors, a record of those transactions or relationships maybe in the Networks database. When Advisors or an investment banker that licenses the Networks technology is engaged to raise capital or identify potential strategic partners on behalf of its corporate client, and that corporate client shares characteristics similar to companies in which your firm has already made an investment, there is a strong likelihood that you’ll be contacted by a member of the investment banking team who will share some very preliminary information about a prospective offering that might be of interest to your firm. If you are interested, you’ll be invited to join the Network. After some preliminary due diligence to satisfy federal anti-money laundering and regulatory obligations, you’ll receive an e-mail advising you of your acceptance and providing you with a password. Becoming a member of the Network does not mean you will be contacted by Advisors or an investment banker using the Networks platform every time a deal is done using the Network’s technology. The frequency with which you are contacted by an investment banker will be determined by the profile of the company that is in the market seeking capital, the relevant information that the Network has about your investing preferences, and the company’s desire to have you enter their particular process. You will not know a deal is in the market unless you are invited by the issuing company, and you might not hear from us ever if we do not have a deal that matches your profile. The point is, when you do hear from Advisors or an investment banker using our platform, the opportunity that you are being offered should meet your investment criteria based on the information available to Networks.
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