Cindy Padnos: I don’t know if you know Neha Sampat, but she has a company called Contentstack. It is in the digital experience management space. We led her seed round of financing that enabled them to go from $1 million in ARR to over $4 million in less than a year. This was done with just a $2 million financing. This was rather extraordinary. Insight Partners then led a $30 million series in the company about a year later. She and her team had bootstrapped by having an IT services business.
We came to recognize that they were building the same product over and over again for customers around the globe. We decided to productize that offering and spin it out. They sold their software business to Software AG and put all the resources into the productized company when we put our money in.
Sramana Mitra: I want to underscore what you said. That is a methodology that we have on our end which is Bootstrapping using Services. We do a lot of Bootstrapping using Services case studies. There are great companies that have done well with the Bootstrapping using Services methodology. Oracle is one of the known examples.
One of my favorite examples is Alteryx which was bootstrapped with services. I met their CEO in 2013 and I am still in touch with him. This was a company that is a textbook case study of bootstrapping using services. I am very happy to hear that as an investor, you acknowledge the importance of bootstrapping as a service and how effective it is to build companies like this. If you want to introduce this company to us, we will be happy to do an Entrepreneur Journeys story.
Cindy Padnos: I am happy too and I’m sure Neha will be too. She is brilliant. On top of being a great entrepreneur and CEO, she is also a level 2 Sommelier. If you are lucky, she will send you a nice bottle of wine. One thing I would say is that most VCs are not interested in companies that start as services businesses. I want to be clear on that.
The reality is that there are a lot of things that we are interested in that most VCs aren’t. We are interested in companies that use SBIR grants to get further along. This means no dilutions at all – just grants from the government. We also recognize that in a lot of these bootstrapped companies, family members may be involved.
Most of my friends would say, “I wouldn’t touch that with a ten-foot pole.” We have taken a contrarian approach. We understand the value that can be built without venture capital. We then believe that we have the resources, know-how, contacts, and the network to help those companies accelerate when they are ready.