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Aug. 13, 2002
Blue Falcon Will Fly With $9 Million
Despite a tough environment for venture capital deals, technology company Blue Falcon Networks Inc. has managed to obtain $8.5 million in third-round financing.
Despite a tough environment for venture capital deals, technology company Blue Falcon Networks Inc. has managed to obtain $8.5 million in third-round financing.
The Los Angeles-based company delivers online digital content, such as streaming video and audio. Its customers include Radio Free Virgin, a subsidiary of the Virgin Group Ltd. The proceeds from the latest financing round will fund Blue Falcon's development and operations.
"What made this deal particularly rewarding is that it wasn't just a follow-on by original investors," says Hale Boggs of Manatt, Phelps & Phillips of Los Angeles, which represented Blue Falcon. "The company brought in a new investor."
And that new participant was New York-based Sprout Group, which contributed $4 million, making it the lead investor. Previous investors Draper Fisher Jurvetson, Zone Ventures and Wasatch Ventures also took part in the financing.
Blue Falcon has raised a total of $20 million from all three financing rounds.
"There's a lot of hesitancy on the part of venture firms to make investments," Boggs says. "A lot of the investment that's happening now is by funds doing follow-on rounds, as opposed to new entrants. This market has seen venture capital firms being quite conservative and cautious."
"But Blue Falcon was able to convince an important new investor that it is a company worth investing a significant amount of new money in," he adds.
Manatt associates Ivan Gaviria and Lisa Koven also worked on the deal.
New York's Salans Hertzfeld & Heilbronn served as counsel to Sprout.
Toni Vranjes
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