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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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