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Justin Hibbard
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April 25, 2005

The Biggest VC Deal of Q2?

Justin Hibbard

Ever heard of Adteractive? Probably not, but you will soon. The San Francisco-based online advertising company has nearly finished raising a venture capital financing round in excess of $100 million, Deal Flow has learned. Correct me if I'm wrong, but that may be the largest VC deal of the second quarter (assuming it closes in the second quarter).

No word yet on who the investors are. Five-year-old Adteractive has never taken VC funding before. The founders own a majority of the company and will sell some of their shares in the deal a la Fastclick, say sources familiar with the deal. It's called taking money off the table, and founders of at least nine other Internet advertising companies, including Fastclick, have done it in the past 18 months. We'll tell you more about this development in an upcoming story.

02:44 AM

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Definitely a big deal for the CPA space. Anyone know who the VCs are?

Posted by: Noah at April 25, 2005 03:07 PM

I don't know if this is the biggest deal in Q2 but it's certainly the biggest in CPA marketing this year. Great scoop, thanks for letting us know.

BTW, your Trackback Permalink isn't working properly and you might want to try Feedburner to manage your RSS feeds. Otherwise, thanks for the great blog.

Posted by: Noah at April 25, 2005 05:06 PM

what's defensible about their biz? SEM tactics that are being questioned and CPA brokerage? More a fox business than a hedgehog business.

Posted by: Bewildered at April 26, 2005 05:14 PM

I know a lot about adteractive and one thing I can tell you is that they derive an enormous amount of both of their revenue and profit from a business model that not many believe in: incentivized traffic. A lot of their revenue comes from sites such as and While freeipods is more legitimate, there have been many articles about emarketresearchgroup and the fact that consumers are continually being ripped off and not receiving the incentives promised to them. I don't think that this business has longevity and I strongly believe that the FTC will soon come down on businesses like emarketresearch and freeipods, just look at the number of complaints on ripoffreport:

I have no doubt that adteractive will get their money, but it'd be interesting to see if they'll be able to sustain their revenues as the house of cards built on lies and deception crumbles.

I wouldnt even mention Adteractive and Fastclick in the same sentence.

Posted by: Sam at April 28, 2005 01:35 PM

We love working with Adteractive and hope this spells only good things for the both of us in the future!

Posted by: W7 at May 17, 2005 12:58 AM

ha, adteractive are a bunch of email spammers. Nothing more, nothing less. I find it hard to believe that VCs wouldn't see through this. Another thing is that their management is a bunch of low-lifes that treat the clients like garbage and suffer from megalomania. The incentive traffic that a previous comment talks about is truly a criminal act that the FBI should take a look at. It is not that the company doesn't send you your free ipod or whatever, the fact is that adteractive makes you jump thru so many hoops for your free gift that there are many breakage points. What is a breakage point? Well, its the fact that you have to signup for all sorts of stuff, then get emails (which are probably in your email spam filter) that u print, then u send it in, then u reply to conf. email....the list goes on. So all adteractive has to say is, 'Whoops, it got lost in the mail, or our email server messed up, or many other excuses that are out of their control. Get it now?

Posted by: Diego at August 24, 2005 08:09 PM

Justin mentioned "at least 9 other deals", does anyone know exactly which ones he's reffering to?

Posted by: Eric at September 16, 2005 12:08 AM

Every now and then the VC community comes across a company with immense potential and they all desire a piece of it. Apparently, there's one IT secrity company in particular that many a big gun on Sand Hill road have their eyes on :-)

Posted by: Nikki at October 18, 2005 04:19 AM

Adteractive is a bunch of lowlife leaches who screw over their own employees with a 'Phantom' stock plan. Do not go anywhere near these scumbags!

Posted by: Diego at January 18, 2006 05:58 PM

The incentive traffic that a previous comment talks about is truly a criminal act that the FBI should take a look at. It is not that the company doesn't send you your free ipod or whatever, the fact is that adteractive makes you jump thru so many hoops for your free gift that there are many breakage points.

Posted by: Kate at January 20, 2006 01:59 AM

What's up with Diego's comment? Do you still work at the company?

Posted by: Fred at February 19, 2006 08:00 PM

What is the 'Phantom' stock plan?

Posted by: M at April 28, 2006 04:13 AM

Diego didn't write it. A Phantom stock plan is a means of allowing employees of an S corp a way to share in the ownership of the company. There are some drawbacks (you can't buy shares, so if you leave, you leave), which is probably what the commentor is referring to.

Posted by: anon at June 1, 2006 11:52 PM

wasn't this whole thing a fraud?

is adteractive going the way of all the other dot bombs?

Posted by: Eddie Wilson at June 19, 2006 01:41 PM

didn't this deal turn out to be not true?

Posted by: Eddie Wilson at June 26, 2006 05:46 PM

Wasn't this story found to be untrue? Just a small-time company trying to raise its profile (before folks figured out what they actually did to "make" their money)???

Posted by: Eddie Wilson at June 28, 2006 12:43 AM

wasn't this found to be untrue? just adteractive trying to raise its profile.

For some reason, the "official" word never quite materialized.

Was the press just suckered again?

Posted by: Eddie Wilson at July 13, 2006 11:01 PM

Ateractive are a huge bunch of crooks. Everyone that has ever worked there knows the truth behind the scams and have bailed on that place asap.

Posted by: Josh at August 29, 2006 06:34 PM

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