Jeff Green, former COO of ad exchange, AdECN (which was purchased by Microsoft in 2007), spoke with AdExchanger.com about the funding of his new company, The Trade Desk.
AdExchanger.com: What have you been up to since you left Microsoft's AdECN?
JG: Since nearly the day I left, I’ve been focused on creating a new company, The Trade Desk.
What's the investment look like - How much? Who? Why this group?
The environment for raising money has changed a lot since I first left Microsoft. Capital is moving into the space again in a way that it wasn’t even 6 months ago. Given that we gave investors a healthy ROI when we sold AdECN, we had lots of options. Of course, having lots of options allows us to be very deliberate and strategic about the money we raise.
We looked for investors that we wanted to work with and would provide far more than just capital. We think raising money pre-revenue is about optimizing for the maximization of options. While there can be benefits to taking institutional money early, we found that a seed round with strategic investors and a group of solid angels gives The Trade Desk the best chance at success.
With that approach, we’ve closed the first tranche of our seed round of financing of approximately $2.5 Million. The round was lead by two funds, Founder Collective (www.foundercollective.com) led by Eric Paley and IA Venture Partners (www.iaventurepartners.com) led by Roger Ehrenberg. We also have great group of strategic investors that have followed on the round. Those investors include Jerry Neumann, who used to run the interactive media investment arm of the Omnicom Group (NYSE: OMC) and Josh Stylman, who was co-CEO and Managing Partner of Reprise Media, a division of Interpublic (NYSE:IPG)
We expect to finish the second and last tranche of our seed round by the end of next week, which will further lengthen the list of industry insiders that are in this deal.
Any sense of current sentiment from the investment community (VC or angels) right now in regards to ad technology companies? Are demand or supply side tools of more interest these days, for example?
As I mentioned, the market is getting lots more capital attention in 2010 than it did in 2009. I suspect this year will be multiples better than 2009 in terms of the number of deals and the number of dollars.
In terms of areas getting attention, I do think the demand side is getting more attention than the supply side. But I’ve heard a lot of large publishers grumbling about that, so I don’t expect it to last long.
I would add that the benefits and hype of RTB has most investors and industry insiders believing that the industry is going to be very different in 3-5 years than the industry that we have today. Clearly most of them believe that this shift will create a new generation of successful companies that they can fund.
What do you hope to do with these initial funds?
These funds will take us to initial product launch and build out our team.
We’ve already assembled a great team of ad exchange and industry experts, and we’ll continue to add to that.
What's the basic premise of The Trade Desk?
Basically, we answer one of the most difficult questions in advertising: what is this impression and this user worth to this advertiser at this instance?
To do that takes lots of systems, partnerships, technology, math, and expertise. It also requires a lot of data, so we’ve created a unique value prop for data owners and data managers.
By John Ebbert