Here we review the details of the terms. Companies pay $20,000 per cubicle per year for the Incubator, and in exchange they receive training, facilities and access to expertize.
SM: Does that $20,000 also give them access to the SalesForce.com platform? RB: We do not charge for building upon the platform. When you start to sell applications on the platform, then you pay SalesForce fees. Especially if you bundle in the solution.
SM: Sorry, I meant, what is the fee structure of the royalties? RB: The way we structure this is really pretty simple. If you are an ISV and all you do is deliver the application through the AppExchange, which is the on-demand marketplace, there are revenue sharing models in place which function on a very simple basis. When you book revenue and it originates through the influence of the AppExchange you owe us referral fees. If you decide to bundle the SalesForce platform into your solution, and there are companies which do this, it is more like an OEM agreement, then the fee is $25 per user, per month, which is the royalty fee.
SM: How is financing handled for each of the Incubator companies? Does Incubation include Venture Capital, or do you help them get financing from other VC firms? RB: We announced on Monday the AppExchange Venture Network, which is the network of venture capitalist and finance providers which is available to the Incubators and the AppExchange partners. We broker between supply of money and demand of money. We ourselves do not invest in these companies.
SM: Who are the VCs in this network? RB: There are over 40 VCs in the network. They have already invested $225M into companies in the AppExchange. We have done this effectively. We just formalized this Monday, but over the past few months they have funded quite substantially.
SM: Do you have a list of companies who have been funded? RB: We do not break out the list because some fundings have not been announced yet. I can give you some examples; Intacct and eProject have been pretty visible fundings by investors such as Emergence and Bay Partners respectively.
[SM: Contactual, Eloqua, eProject, Genius, iNeoMarketing, InsideView, Invisible CRM, Intacct, Jigsaw Data, Pandora Networks, Rally Software Development, Right90, Xactly and others have closed various levels of funding since the AppExchange went live in January 2006. Several venture firms have already joined the AppExchange Venture Network, including Alloy Ventures, Battery Ventures, Bay Partners, Benchmark Capital, The Carlyle Group, Emergence Capital Partners, Granite Global Ventures, Hummer Winblad Venture Partners, InterWest Partners, JMI Equity, Lighthouse Capital Partners, Lightspeed Venture Partners, Mohr Davidow Ventures, Norwest Venture Partners, Partech International, Pinnacle Ventures, Shasta Ventures, Sierra Ventures, Sigma Partners, Sutter Hill Ventures, Trinity Ventures, U.S. Venture Partners and
VantagePoint Venture Partners.]