Sramana: When did you decide to raise money?
Kevin North: In 2006, I decided to raise money because we were experiencing some traction. We were still in single digits but that was a big improvement from 2004 when we still had less than $1 million in revenue. When I was raising money, we were at $7 million in revenue.
Sramana: That is a strong position to be in for the first round. Was it difficult raising money in Toronto?
Kevin North: I raised money in the US. We had term sheets from Canada and the US but we ultimately chose the US firms. It was a good decision because we had the best term sheets from a firm out of Wisconsin. We raised $8 million dollars and it was one of the best decisions that I ever made in my career.
We had to build out a true enterprise organization. Everyone that we were speaking with when we were raising money expressed the same concern, and that concern was that desktop and enterprise software were two totally different things. The organizations that build desktop software and the organizations that build enterprise software do not look remotely similar. They are different from a sales, engineering, and support perspective. They are different company’s period. We were considered a very high risk investment because the majority of the companies that tried to make the transition from desktop to enterprise failed.
We were successful because we had a plan for that conversion process. We were investing our funds into a field sales organization in the US, into marketing, and into building out an engineering platform called Stature which became the flagship technology for the company for years to come. That platform is still being used today. We opened up offices in Europe and built a strong pre-sales team.
The money we raised worked well for us and our revenue jumped again. We were acquired in 2011 and we had a good exit. I think at the end of the day, everyone was very pleased.
Sramana: Who acquired you?
Kevin North: A public company called IHS out of Denver, Colorado.
Sramana: Are they a competitor to RMS?
Kevin North: I don’t know if they would be deemed competitors or not. IHS does a lot of different things. They own Janes Publishing. They are in a lot of different things. At Dyadem we never competed against RMS, so I doubt IHS does either. The companies we were competing against were folks like Primatech and IHS prior to the acquisition.