Deal Watch: SurveyMonkey keeps mum on acquisition

This much we know for sure about the April acquisition of Portland’s SurveyMonkey:

A private investment group, led by Spectrum Equity Investors, acquired a majority interest in the 10-year-old online survey company.

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By Jon Bell

This much we know for sure about the April acquisition of Portland’s SurveyMonkey:

A private investment group, led by Spectrum Equity Investors, acquired a majority interest in the 10-year-old online survey company.

The investors appointed David Goldberg, former head of Yahoo’s music business, as the new CEO. He replaces Ryan Finley, who founded SurveyMonkey with his brother, Chris, in 1999 with a $10,000 investment from their parents.

And under the new management, SurveyMonkey will open a new office in Menlo Park, Calif.

Beyond that, neither SurveyMonkey nor the investors are saying much.

Despite word that the Finley brothers will stay with the 20-employee company in Portland, some think SurveyMonkey will shift its focus — and its growth — to Silicon Valley.

“I am sure the locus of power will move to Menlo Park,” says Jack Raiton, a professor in the Division of Management at OHSU and a former executive at both Planar Systems and Tektronix. “The 20-minute rule in venture capital says that VCs do not like to invest in companies that are more than 20 minutes away.”

Raiton thinks it’s impressive that SurveyMonkey, which reportedly had revenues of $5 million in 2007, was able to land any funding at all in the current investment climate, let alone from a prominent group of VCs. However, the company’s valuation is likely not sky high, so the investors probably got a good deal.

“The equity partnership is likely betting that SurveyMonkey will be vastly more valuable once the market recovers and are buying it cheap now in order to sell it at a strong profit in the future,” says Rob Enderle, a technology analyst in San Jose, Calif.

That said, Enderle notes that Spectrum has one of the better reputations in the venture business.

“Which actually bodes well for this effort,” he says.

List researched by Jon Bell