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Evolve Software, then a private company, had
devoted three years and several million dollars to develop solutions
to automate professional service organizations, much in the way
that SAP automates manufacturing-intensive industries.
Shortly before we became involved with the company,
Evolve had just completed development of its solution and won its
first pilot customers. The company appeared to be well positioned
with a huge market opportunity in front of it. Initial feedback
from the company’s prestigious pilot customers and industry
analysts was quite favorable.
Unfortunately, unexpected difficulties caused
a critical round of funding to be scuttled at the 11th hour. Cash
reserves were exhausted and the company faced the prospect of laying
off the majority of its employees within weeks or even declaring
bankruptcy.
We were brought in to try to quickly save the
company. With the immediacy demanded by the situation, we helped
the company explore its financing options, including bridge loans,
venture capital, and strategic financing. Through our contacts and
by keeping an active pulse of the market, we were able to quickly
introduce the company to willing sources of bridge financing and
bring several top venture capital firms to the table. Obviously
we had to get up to speed immediately so as to sell the company’s
opportunity and cultivate interest without the luxury of the typical
fundraising cycle.
One of the VCs we brought to the table was
Sierra Ventures, one of the leading Sand Hill Road venture capital
funds with over $1.1 billion in invested capital over 8 funds. Sierra
has a keen focus on enterprise software and has made investments
in several notable companies, such as Intuit (INTU), Healtheon (acquired
by WebMD), Motiva and OnLink Technologies (both acquired by Siebel
Systems), CrossLogix (acquired by BEA), FairMarket (acquired by
eBay), and many others.
Sierra’s aggressive interest allowed them
to win the investment opportunity, in the process interrupting and
replacing our willing source of bridge financing. With its near
term financial issues solved, we were able to help Evolve close
a $10 million venture investment with Sierra. Time to final closure
was less than three months from our first involvement.
As a result of our all-out fundraising efforts,
Evolve was able to continue executing on the opportunity facing
it. Business blossomed and in roughly 18 months, the company completed
a highly successful IPO on the NASDAQ, raising nearly $50 million.
Annual revenues hit $35 million in only 2.5 years. Since then, Primavera
Systems, a leading provider of project portfolio management solutions,
acquired the company.
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