Caavo will not find your Apple TV during setup if Apple TV is not connected to the same network that Caavo is using. This can happen if you have more than one network in your home, if AppleTV has lost its network connection, or if the Apple TV has not been set up yet.
When this happens, Caavo will display a line saying "I don't see my device. Help me with this step". Select this option to display video from the Apple TV, after which you can then use the Apple TV remote to resolve the issue. Caavo will also display the network name and subnet it is using so you can make sure Apple TV connects to the same network.
You should also make sure that Airplay is ON by going to Settings> Airplay> Airplay. Choose either "Everyone" or "Anyone on the Same Network".
Once your Apple TV is connected to the network, press the CAAVO button to continue.
If your Apple TV cannot be connected to the network at this time, press the FAST FORWARD (>>) button on the Caavo remote to skip setting up your Apple TV.