Sramana Mitra: What else happened? It sounds like it’s a fairly straightforward enterprise software go-to market strategy. The beauty of that strategy is that you get these large deals and good cash flow. I think we understand that model. Is there anything else you did strategically that was particularly interesting?
John Underkoffler: We’ve made it sound linear and streamlined. The truth is, as with any young company, it’s a roller coaster ride and, for us as with many companies, there were near-extinction moments.
Sramana Mitra: What were some of these near-extinction moments? What were some of the challenging moments?
John Underkoffler: Luckily, we have only one. In 2012 just when we were ready to start pushing the product, we scaled up the operation in anticipation of our new commercial guys, which was frankly ahead of revenues. It was a rookie mistake. That’s one of those hard moments. We can see the future very clearly and there’s only a few things you can do to avert flying the plane into the mountain.
Sramana Mitra: You’ve developed this organically, right? There’s no external financing?
John Underkoffler: On the contrary, we did a Series A in 2007 with Foundry Group out of Boulder who, I suspect, a lot of your readers will know.
Sramana Mitra: Sure, Brad.
John Underkoffler: Yes, Brad Feld. Brad saw our stuff in late 2006. They were just getting Foundry Group off the ground. They haven’t actually raised their first fund yet. We found the philosophy and approach incredibly appealing. It was clear at that moment and at every moment afterwards that they not only understood the technology and the promise, but also that it was a long-term proposition. This was in an era when people were able to create things like YouTube and sell them at unbelievable multiples in 18 months. The focus of the venture world was, very much, on the short-term turnaround.
Sramana Mitra: Yes, always on short-term. It’s still on short-term.
John Underkoffler: The Focus Foundry guys really are incredible. They’ve got a long-term view and are able to identify what’s important and what’s not important. They’ve been incredible supporters along the way. I’ve no doubt that when people start writing books about this second era of venture, Foundry will be regarded and analyzed in the same way that the Kleiner and the Sequoia of the last era were regarded and written about.
Sramana Mitra: Is that the only round that you did with Foundry?
John Underkoffler: We’ve done a few more. The participation has been a relatively small number of entities. Morgan Stanley and AIP came aboard for the Series B and have been with us ever since.
Sramana Mitra: What is the total amount of money that you’ve raised?
John Underkoffler: The Series A was $8.7 million. The Series B was $21 million and it has gone onwards from there. There’s new accuracy over at Crunchbase and other competing and similar venues so it’s easier than it ever was. You don’t have to go rummaging around the SEC anymore.