[Sean Cash]

This release just came out. It makes it appear as though rockbridge has taken a controlling interest in rapidadvance. Acquires seems like pretty strong language.

http://www.prnewswire.com/news-relea...223943081.html

[Chambo]

so THAT is why Mark and Jeremy have been so elusive recently.....

[isaacdstern]

That is Dan Gilbert from Quicken Loans

[Chambo]

Rockbridge is part of the Rock Ventures family of companies, whose flagship company, Quicken Loans, is the nation's third largest residential mortgage lender

[Chambo]

The firm is also affiliated with other leading businesses including the Cleveland Cavaliers and Fathead.

[isaacdstern]

That is a huge name to jump into MCA

[Sean Cash]

Quicken Loans? Never heard of em...

[admin]

I think this ought to be republished here:

[Ryan Shiroky]

Talk about growth industry...

"Lunch is for whimps..." - G. Gekko

[Capital Stack]

Cute..

You know this thread really didn't get much play. I think its fascinating how there was a president set in the MCA space in a non distressed way that we haven't seen in others go down. The bold language of $100m Enterprise Value in the release is significant. What is also in a good connotation G. Gekkoish, is how Steve Mandis came in at I'm sure a significantly less valuation. Great trade!!

It will be very interesting to see Rapid and the new family in 2014, and what it does to the MCA space.

[isaacdstern]

I am kind of wondering who sells next and what valuation they see

[cashguy]

This is getting interesting

[Ryan Shiroky]

This is exactly what I was aiming at...

I feel like we'll see a lot of serious old school corporate raiding down the line... Imagine the day On Deck goes public, its going to be mayhem on Wall Street. I feel like it will destroy the company being that everyone in the arena is going to want a piece of that pie and some of the big guys are not going to "Buy it lightly on the way up..." (-Sir Larry Wildman) they are going to gobble the company up...

Some will laugh, some will cry, some will go home empty handed, some will be left holding the bag... We'll see...

[Sean Cash]

Well I can say that there are a lot of big PE firms looking to buy big MCA companies just as one did with rapidadvance. potential buys I see are merchant cash and capital, business financial services, strategic funding source, kabbage etc. There's obviously a lot of other good buys but the appetite right now is to buy a front runner in terms of monthly volume.

Three things I have learned from the PE firms I've spoken with is that they're very interested in bad debt %, technology, and scalability. You can't say "well we'll go from $3 million a month to $50 million a month by recruiting more ISOs." Everyone has biz dev. If you could scale up exponentially simply by recruiting more ISOs, they'll want to know why you haven't done that already.

What makes your funding company an industry disrupter? A game changer? A deal that will return 10x the investment? When I started in this industry, there was no On Deck Capital. Now they're #2 in the space behind CAN. They didn't just do it by recruiting ISOs, they stirred the pot, challenged the norms, and likely are a big reason that the ACH advance/loan market exists right now. They recruit ISOs so easily that they actually CHARGE MONEY just to send them deals. Either you're an epic disrupter or you're leading the pack in volume (or both). That's whose going to get bought.

[Chambo]

This is exactly what I was aiming at...

I feel like we'll see a lot of serious old school corporate raiding down the line... Imagine the day On Deck goes public, its going to be mayhem on Wall Street. I feel like it will destroy the company being that everyone in the arena is going to want a piece of that pie and some of the big guys are not going to "Buy it lightly on the way up..." (-Sir Larry Wildman) they are going to gobble the company up...

Some will laugh, some will cry, some will go home empty handed, some will be left holding the bag... We'll see...

Going public would be the single WORST thing On Deck would/could do. No more BS and smoke, they would have to produce their numbers every quarter and answer to shareholder scrutiny.

[Ryan Shiroky]

Going public would be the single WORST thing On Deck would/could do. No more BS and smoke, they would have to produce their numbers every quarter and answer to shareholder scrutiny.

But if they were swallowed whole by a small group of some other big names then they would be operating on a whole other level, management would be switched up and there would be a mass execution of staff... So who knows what would happen really. But I do fully agree it would destroy the company because it would either be cannibalized by other funders or crumble from within (this is all speculation and simply my opinion, and wtf do i know, im just a sales guy...)

[Ryan Shiroky]

This is getting interesting

This whole board is pretty damn interesting... for MCA junkies anyway...

[Chambo]

But if they were swallowed whole by a small group of some other big names then they would be operating on a whole other level, management would be switched up and there would be a mass execution of staff... So who knows what would happen really. But I do fully agree it would destroy the company because it would either be cannibalized by other funders or crumble from within (this is all speculation and simply my opinion, and wtf do i know, im just a sales guy...)

On Deck has been fantasizing about this since inception in 2006.

[Ryan Shiroky]

On Deck has been fantasizing about this since inception in 2006.

Indeed. The day they are profitable they are going to start pushing that IPO. And as you said, its going to be the single worst thing they have ever done/desired.

What I don't understand... they are #2 in the space, HOW THE HELL are they NOT PROFITABLE?!?!?!? I don't see overhead as being a good excuse...

[jbrown]

Indeed. The day they are profitable they are going to start pushing that IPO. And as you said, its going to be the single worst thing they have ever done/desired.

What I don't understand... they are #2 in the space, HOW THE HELL are they NOT PROFITABLE?!?!?!? I don't see overhead as being a good excuse...

Easy. Keep raising capital from VC firms and selling a high growth story. Grow insanely now, profits come later. Until they don't and/or you can't continue to raise money. Then the wheels come off the bus (and the merchants go round and round...)

[Ryan Shiroky]

Easy. Keep raising capital from VC firms and selling a high growth story. Grow insanely now, profits come later. Until they don't and/or you can't continue to raise money. Then the wheels come off the bus (and the merchants go round and round...)

So, they are making VC firms ooohhhh and ahhhh while having their pockets turned out??? Wouldn't a VC (at some point in the meeting) ask "ok the growth is nice, but where is the ROI????"

[jbrown]

So, they are making VC firms ooohhhh and ahhhh while having their pockets turned out??? Wouldn't a VC (at some point in the meeting) ask "ok the growth is nice, but where is the ROI????"

Billions and billions were invested and lost in the dot.com crash of the late 90's based on investing in companies that reported the "# of eyeballs" they had captured. Not profits, not even revenues - just the future potential based on having lots of (non-paying) customers. Not the first time, and won't be the last time.

[Ryan Shiroky]

Billions and billions were invested and lost in the dot.com crash of the late 90's based on investing in companies that reported the "# of eyeballs" they had captured. Not profits, not even revenues - just the future potential based on having lots of (non-paying) customers. Not the first time, and won't be the last time.

I totally understand that... but it still makes no sense...

"Insanity: doing the same thing over and over again and expecting different results." - Albert Einstein

[Gini Co]

Indeed. The day they are profitable they are going to start pushing that IPO. And as you said, its going to be the single worst thing they have ever done/desired.

What I don't understand... they are #2 in the space, HOW THE HELL are they NOT PROFITABLE?!?!?!? I don't see overhead as being a good excuse...

My guess is that they are not profitable on a GAAP basis due to the accounting standards for Revenue Recognition and Loan Loss Reserves...This leads to little to no profit in high growth periods (i.e. their entire existence as a company.) I'm sure they're making positive returns in excess of cost of capital and overhead on their portfolio. Investors will be just fine.

[MCAVeteran]

On deck already had a bid by wonga to purchase them and that deal didn't happen. It takes time for the right valuation to come around that makes sense for both parties and until you find the buyer at the right price , you continue to work on technology and growth branding. Most technology based companies have an exit strategy in their corporate DNA - so there may be new owners for some companies down the road but the brand name should stay around. The impact to wholesale channels shouldn't be an issue unless the new ownership mgmnt decides 3rd parties are no longer of interest or selling their product services-