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Bootstrapping a Billion Dollar Unicorn with Services from Utah: Dave Elkington, CEO of (Part 6)

Posted on Saturday, Apr 11th 2015

Dave Elkington: Everybody who was willing to give us term sheets were great firms but what mattered to me was the cultural fit. Ultimately, we did $35 million from US Venture Partners. It was because I had Steve Krausz and Dafina, who were one of the newer partners. They were the right people. I loved their experience. I liked their engagement. They weren’t the highest valuation by a significant amount but they were the right people. They gave me the exact same terms that Mark Gorenberg gave me.

It allowed me to put much more fuel into the fire. By this point, I was surrounding myself with a lot of advisors that have done this before. Josh James had, at this point, joined my board. These are people who have done what I’ve done and have been through the bootstrapping approach—people like Fraser Bullock who was one of the founders of Bain Capital. Steve Young is on my advisory board.

We took the $35 million. The plan was to grow 100% again, which we did. We grew to $25 million. This was 2013. We spent half of what we anticipated. We didn’t necessarily need money. I’m sure you’ve heard this from a million people. Take money when you don’t need it and never when you do. We decided to do another round at the end of 2013. This time, I decided that I wanted to go big and be aggressive. I sought to raise $100 million. We were anticipating to grow 100% again. I think we had 30 venture firms engaged. We had some venture, growth, and even some private equity.

Very soon, we had lots of demand. I think we’ve created over $300 million of demand, which gave me the leeway to pick the right ones. Ultimately, we ended up selecting Polaris and Kleiner Perkins. It was for the same reason. We found the right people. I have Dave Barrett. He ran North American sales at IBM. He’s a salesman at heart. Then, I have Matt Murphy from Kleiner whom I really like. He was a finance guy, but he looked at the world the way we did. Even though we’re not bootstrapped, we still run it as a very capital efficient startup. We are very cautious on how we spend our money. If you come to my office today, it doesn’t look like a Silicon Valley firm. We’re just spending money where it matters.

Sramana Mitra: You’re still maintaining a scrappy, bootstrapped, and disciplined culture.

Dave Elkington: Exactly. We raised $100 million and we grew 100% last year. We have seven cultural definers. We’re blunt and open. We’re scrappy. We own it. We’re maniacal. Next, we iterate. We kept fixing. I like to celebrate quick failure as long as we don’t do it again. We zig when everybody else zags. We want to be different. Lastly, we do good.

You know how you surround yourself with advisors that help you. Some know their advisors and others don’t. I always would look at Bill Gates. Bill Gates doesn’t know me, but I would always watch him and model off him. One of the things he said that really struck me was one of his biggest regrets in life was waiting until he was really big to give back to the community. It really struck me. I was watching this on TV. It felt like it reached out to me. He said, “If you’re an entrepreneur, you can give back the whole time. At the end of the day, all you have is time.” He said he wasted a huge amount of time. If he were going to do it again, he would have given back sooner. We actually built a foundation where we give 1% of our revenue to defined goals, which is around helping underprivileged children. Mark Benioff did something similar. He does equity. We do top line revenue. Even when we’re building wealth and value, if you don’t make society better and the families who are involved, you still haven’t done anything. That’s another key element of our culture.

We’ve raised $139 million. We’re growing like crazy. I think we’ll grow over 100% this year. I will be no better than my mentors and team around me. Half of my time is spent around recruiting and building an amazing team. Josh James gave me an amazing piece of advice. He said, “Hire people to help you and who are better than you.” He introduced me to the lead tech recruiter. His name is Michael. Michael has been my partner in the business in helping me build up the leadership team. I hired way above my class. He and I sat down and explained, “We want to be a multi-billion dollar business. We want to hire leaders who have been in that role.”

He helped me find Mike Holson. He was the CMO at Citrix. He moved from Florida to Utah. Kevin Samuel was the CFO of Infor. Jim Steele was the President of who two months ago, moved up from the Valley to Utah.

This segment is part 6 in the series : Bootstrapping a Billion Dollar Unicorn with Services from Utah: Dave Elkington, CEO of
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