Sramana: Let’s touch on a few highlights of the Blackboard story. You started building pages for professors, and then other universities started contacting you. Did you finish college or did you drop out to do this?
Daniel Cane: I didn’t drop out; I finished by the skin of my teeth! I graduated from Cornell with an undergraduate degree in applied economics.
Sramana: So you were able to run your business and attend college at the same time?
Daniel Cane: Yes, I multitasked quite well.
Sramana: When did the financing stage happen?
Daniel Cane: The financing happened in a few different stages. Some of it happened while I was in college and some of it happened after. I actually graduated from college early because I could see the writing on the wall. I completed my degree, and we received Series A funding right after I graduated.
Sramana: What was the process of going from being a student to receiving Series A financing?
Daniel Cane: By 1998, the Internet had generated a lot of excitement. We had early stage and angel investors approach us, but they wanted to see a proven track record of either the management team or of the product. Our management team did not have a history, but our product did. We had trailing revenue of two dozen clients before we closed our Series A. There was enough momentum behind us to make that happen. We had customers as well as 24 employees. There was more than enough there for investors to sink their teeth into.
Sramana: Where did you go to solicit investors, New York or Boston?
Daniel Cane: The lead angel was based out of Washington D.C.
Sramana: How did you get to the investors?
Daniel Cane: In 1998, they were beating down our doors. I could not get any attention in 1994. There are times when investors have their heads in the sand like ostriches, and you can’t get their attention no matter what you do, and then there are times when you can’t get investors to stop calling you. In 1998, there was a lot of buzz and excitement for growing companies.
Sramana: How did the investors know about you?
Daniel Cane: I don’t remember the exact details. We were involved in a young entrepreneurial community. It was not as formal of a club as they do now. When we went around to do our Series A there were well-defined communities of investors in Boston, New York, and Virginia and they all monitored the clubs and loose entrepreneurial associations. I don’t remember if we are the ones who found our investor or if they found us. I do recall that nothing happened until we had clearly proven our revenue.