Storage Wars Continue: Dropbox vs Box

VC Experts Intelligence Team

Every entrepreneur who aspires to raise capital looks forward to "talking valuation" with

potential investors. Some dream about it, only to wonder, once a deal has closed, what exactly

they have agreed to. Many people end a negotiation, agree to terms, and walk away unclear as to

how the final valuation of the company was determined. The entire topic of valuation is often

shrouded in mystery, largely because of the private nature of the venture capital industry and the

extent to which valuation methodology is rarely openly discussed. A valuation is a function of a

myriad of elements, none of which will necessarily apply equally when assessing any two

companies. Factors that influence a valuation include: [1]

• The current and expected future valuations of comparable companies in the public and, when

available, private marketplace

• The supply and demand for capital at the time of financing

• Intangibles unique to a specific company, including the quality of a management team, a

company's competitive advantage, and its likely pace of revenue growth and profitability

• The nature and timing of an expected exit for the investor

• The implications of future capital raises, as well as needs to expand a company's options pool

on the company's capital structure, going forward

With the confirmation of Dropbox's $325M raise we have calculated a post money valuation at

over $9 billion. Looking at their direct competitor Box, we noticed some differentiating factors

that set the two seemingly similar companies apart. First, with their Series C round Dropbox has

a higher valuation than Box at their Series E-1 round. Second, the Price Per Share is drastically

different if you compare both Series C rounds: Dropbox at $19.01 and Box at $1.28. However,

interestingly enough the current price per share for Box is $18.00 which is very close to

Dropbox's $19.01. As the storage wars heat up we wanted to compare the two companies and

have provided data on both companies from the VC Experts Intelligence database below.

[1] "Valuation: Fair Market Value and the Use of Comparables" - Joe Bartlett, Founder and Chairman of VC Experts

Preferred vs. Common Price Per Share With Valuation

Most Recent Financing Round

DROPBOX INC

Date Amount Valuation

Est. Fully

Diluted

Shares

Preferred

Price Per

Share

01/29/2014 $325.00M $9,379,097,564 491,021,379 $19.10

Round: Series C

Direction: Up Round

Liquidation Preference: Pari Passu

Liquidation Multiple: 0-1x

Stock Type: Conventional Convertible

Capped Participation: No

Anti-Dilution: Weighted Average

Redemption: No

Cumulative Dividends: No

Dividend Rate: 8%

Pay to Play: No

BOX INC

Date Amount Valuation

Est. Fully

Diluted

Shares

Preferred

Price Per

Share

12/06/2013 $100.00M $2,182,989,896 121,277,217 $18.00

Round: Series E-1

Direction: Up Round

Liquidation Preference: Pari Passu

Liquidation Multiple: 0-1x

Stock Type: Conventional Convertible

Capped Participation: No

Anti-Dilution: Weighted Average

Redemption: Yes

Cumulative Dividends: No

Dividend Rate: 8%

Pay to Play: No

Investment Amounts (M)

General Information

Dropbox: Key Management • Schreier, Bryan - Director

• Houston, Drew - Founder,

CEO, Director

• Ferdowsi, Arash - Founder,

Director

• Address: 185 Berry Street

• Geographic Region: Silicon

Valley

• Industry: IT Services,

Software, Business Products

and Services

• SIC Codes: 7374 - Computer

Processing and Data

Preparation and Processing

Services

• NAICS Codes: 518210 - Data

Processing, Hosting, and

Related Services

• Legal Counsel: Fenwick &

West LLP

• Company Website:

http://www.dropbox.com/

Box: Key

Management • Levie, Aaron - Co-

Founder, CEO,

Director

• Smith, Dylan - Co-

Founder, CFO,

Director

• Levin, Dan - COO,

Director

• Stein, Josh - Director

• Hamid, Mamoon -

Director

• Reiner, Gary -

Director

• Evan, Dana -

Director

• Fu, Winston -

Director

• O'Driscoll, Rory -

Director

• Address: 4440 El

Camino Real

• Geographic Region:

Silicon Valley

• Industry: Business

Products and Services,

IT Services, Software

• SIC Codes: 7374 -

Computer Processing

and Data Preparation

and Processing

Services

• NAICS Codes:

518210 - Data

Processing, Hosting,

and Related Services

• Legal Counsel:

Perkins Coie LLP

• Company Website:

www.box.com/

Dropbox: Investors • Accel Partners & Co Inc

• Greylock Partners LLC

• Benchmark Capital

• Goldman Sachs & Co

• Index Ventures

• Institutional Venture Partners

• RIT Capital Partners PLC

• Sequoia Capital

• Undisclosed Firm

• BlackRock Private Equity

Partners

Box: Investors • Draper Fisher

Jurvetson

• Undisclosed Firm

• U.S. Venture Partners

• Social+Capital

Partnership

• Meritech Capital

Partners

• New Enterprise

Associates Inc

• Hercules Technology

Growth Capital Inc

• Emergence Capital

Partners

• Andreessen Horowitz

LLC

• SAP Ventures

• Bessemer Venture

Partners

• Scale Venture

Partners

• General Atlantic LLC

• US Venture Partners

• Draper Fisher

Jurvetson International

Inc

• Mail.Ru Group Ltd

• Telstra Corporation

Ltd

• ITOCHU

Technology Ventures,

Inc.

• Telefonica

• Coatue Management

LLC

• Macnica Inc.

• Digital Sky

Technologies Ltd

• Mitsui USA

• Mankwitz Kurtz

Investments

VC Experts.com, Inc. Disclaimer: The information contained herein is from sources deemed

reliable; it does not, however, purport to constitute investment advice nor does VC Experts

represent that it contains all information concerning the identified Company deemed necessary or

appropriate for investment decisions. VC Experts is neither a broker/dealer nor investment

adviser and has no financial interest in the Company analyzed nor in the sale or purchase of any

of its securities. The information and data are for reference purposes only and no implied or

expressed warranties or assurances as to its accuracy or completeness are furnished by VC

Experts. Estimates of valuation are, as indicated, estimates based on such information as we

found available, the completeness of which is neither represented or guaranteed; users for any

purpose are cautioned and required to undertake and perform their own investigations and due

diligence. To the extent that the information incorporates content from specified sources of

financial information, VC Experts disclaims any responsibility for the accuracy or completeness

of such content.

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