LogicMonitor and other projects

Growing reluctance to being held hostage to standard venture capital (VC) considerations is one reason why some companies look more to private equity firms when it comes to investments that will allow them to vault to the next level.One of those companies is LogicMonitor, which is less than a decade old, but recently received a $130 million injection of funding from Providence Strategic Growth. LogicMonitor helps monitor cloud infrastructures from one interface and its offer significantly differs from other companies such as New Relic and Splunk.

Key differences

That difference between businesses in this field can be seen by the fact that some companies such as those noted above only monitor application performance while others simply analysis logs. Combining the two offers an innovative approach that caught the attention of private equity investors.

In this particular market, the fact that the company has grown so quickly and has amassed such value in a relatively short period of time stands out. In addition, LogicMonitor has been able to avoid falling into the trap of seeing its burn rate for funds increase as production begins to ramp up.

The way LogicMonitor has developed its business model is one of the many things that firms like ours look for in a company,” said Marwan Naja, CEO of Manixer, a leading Geneva-based private equity firm.

In contrast to venture capitalists, private equity firms are willing to look at things from a long-range perspective. The standard VC timetable isn’t deeply concerned with aspects like research and development; focusing instead on how quickly they’ll be able to cash out.Adding to that conflict is the headache that comes with VC’s being made up of different investors who may seek to take the firm in different directions.

That sort of chaotic setup often ends up paralyzing companies into oblivion.

Finally, the conflict also highlights how some VC’s take a scattershot approach to their investments. They may not be fully engaged in understanding all facets of each particular company and lack the patience to accommodate the particular marketplace.LogicMonitor CEO Kevin McGibben has definite plans for the $130 million investment, with an eye toward expanding into both the European Union and North America in 2016.

Next year, the plan heads east to the Pacific Rim and Asia.Research and development for the company will be enhanced, allowing new products to come to market more quickly. In addition, the possibility of the company buying out smaller competitors remains a consideration.