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Creative Bootstrapping To A 350 Million Dollar Exit: Nimsoft CEO Gary Read (Part 6)

Posted on Monday, Jun 21st 2010

SM: In 2004 when you merged the two companies, what was the revenue of the new entity?

GR: It was just shy of $3 million.

SM: What were your first steps as a new, merged company?

GR: The objective was to start growing the business. We did not have any external investors. We did not have any loans or debt in the company. As we started to grow, we then added people in engineering and sales; we opened operations in the UK via an individual who had the same model for the UK that I had for the United States. He had the same outcome as well. After nine months we brought him on board as a full-time employee, and he is our number one sales rep worldwide.

SM: Does Nimsoft still sell monitoring software?

GR: We do. It has evolved significantly over time. Our main emphasis now is on providers and monitoring the cloud environment. In January 2007, we went and got some venture capital money. We had a $5 million investment from JMI Equity. We took that investment so that we could continue to grow our business.

SM: What was your revenue at that point?

GR: Our revenue was $10 million, and we were profitable. We received good valuation because we were already profitable. We used that money to grow the business in terms of engineering and sales expansion. In June 2008, we acquired a company called Indicative Software. They were based in Ft. Collins in Colorado. We acquired the company for the people. Up until this point we had development only in Norway, and we wanted to have some U.S. development as well. That would allow us to have developers in both time zones. We acquired them for both cash and stock, and we managed to get a ready-made company with ready-made leadership and engineering labs. The founder, John Smith, took over our engineering worldwide.

SM: What countries comprised your international sales market?

GR: We obviously had Norway and England. We then added Germany, and later on we added Australia.

SM: How did the revenue ramp?

GR: In 2006 we had $10 million, in 2007 we had $17 million, in 2008 it was $25 million, and in 2009 we had $32 million.

SM: What happened in the end of 2009 and early 2010 when you received the acquisition offer?

GR: CA started talking to us in late 2009. They started trying to understand our business to see if it was a good fit for them. We had many conversations with them. Most of them were around whether I felt we had a shared vision for the company. We did not need to sell the company and we were not actively looking to sell it. We were selling product, were making money, and were cash flow positive. If we could continue our growth, I felt we could be a publicly traded company. We wanted to make sure that whoever would purchase us would continue to fulfill the vision and look after our employees and our customers.

This segment is part 6 in the series : Creative Bootstrapping To A 350 Million Dollar Exit: Nimsoft CEO Gary Read
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