Sramana Mitra: What did you do after Wharton?
Greg Besner: I ended up going to Goldman Sachs. At first, it felt like a disappointment that I wasn’t starting a company. Although I was doing entrepreneurial things, I was not pursuing entrepreneurship full-time. I’m still happy I did go to Goldman Sachs for a few reasons.
Firstly, it was an incredible culture. I had no financial services background before being recruited to Goldman Sachs. The fact that they trusted their culture and their training and that they would recruit me was really amazing. The training was really incredible. It was the first feel of how culture could be so powerful for business. I’m sure you’re familiar with Fortune’s 100 best places to work in.
I just read this week that Goldman Sachs is one of three companies out of 27 million entities that has been on the list every single year for 20 years. Besides the accolades from a list like that, working there was an amazing experience. It gave me a lot more sophistication around business. I stayed there for about four years. In 2000 when the Internet did really start, I was helping a lot of entrepreneurs with their equity compensation as these companies were becoming public organizations. My area of expertise was helping entrepreneurs with their restricted public equity.
That led to my lightbulb moment for starting my journey over the last 17 years. I was at Merrill Lynch for a brief period after Goldman Sachs. They both had challenges processing these restricted stock transactions. There were a lot of stakeholders and paperwork. It was very complicated and these were very important transactions. Goldman Sachs and Merrill Lynch required a lot of people to manage this process.
I recognized that technology could potentially make it a much more efficient process. I departed Merrill Lynch and started my first company, which was called Restricted Stock Systems. That was scary and exciting. The parallels to what I’m still doing today are striking. I had to put a plan together. I had to find people. I had to find investors and I had to find customers. It was very exciting.
We built Restricted Stock Systems, initially, as a SaaS technology that we would license to financial institutions like Goldman Sachs so that they can more efficiently process these transactions. A couple of years in, as luck would have it, the Sarbanes-Oxley Act of 2002 was put into effect. That required public companies to have a more rigorous process for restricted transactions. We ended up building a version for companies not just for financial institutions. That’s when my work in human resources technology started. I was now licensing technology to human resource professionals at companies.
Sramana Mitra: What year did you leave Merrill Lynch to start this company?
Greg Besner: It was August 2000.
Sramana Mitra: How did you get it off the ground? Did you self-finance it? Did you start with friends and family or were there angel investors? 2000 was not an easy time to raise money. August means market has already crashed.
Greg Besner: For sure. In April of 2000, I took a leave of absence. By June, I had finished a plan. I formally resigned from Merrill Lynch on August 31st. I wanted to do a lot of research first to make sure that this was where I wanted to spend my time and energy. When I finally left in August, I had completed a plan. My first investors were angel investors. Many of them were my customers at Merrill Lynch because I was helping them process restricted equity, so they knew the challenge.
My lead investor retired as the CEO of Deutsche Asset Management. He was very familiar with restricted stock processing. He had started a $38 million venture fund. He and his partners were financial services executives before starting the fund. They were my lead investors and then I put together a group of terrific angel investors that had great insight and experience. As I mentioned, my family didn’t have capital. At this point in my career, I was fortunate to have contacts that were high net worth individuals.