Words You Don’t Hear in Venture; “Great it’s annual planning time!”
In the next two months, I will sit through seven annual planning board meetings. It’s a grind but an important one. Once a company has revenue, “making the numbers”—like it or not—becomes the shorthand by which management is judged. Scale is getting together with a number of our CFOs this week to talk about the best ways to make the annual planning process more effective. Going into that meeting, this is my list—written from a board member perspective—on what I would say to CFOs about how to get a board member to an informed “yes” to approve the annual plan.
Start with the Big Picture
Provide some context on what the company is trying to achieve in the next year. Spend time with the CEO on this. What—from a business perspective, not a purely financial perspective—is the company trying to achieve? The financial plan should map to these goals and should be judged in that context. Don’t assume your board grasps the big picture; spell it out.
If the CEO and CFO cannot provide two or three clearly articulated business goals for the next year, the planning process is doomed.
Show the Assumptions
Show the key assumptions that drive the plan. For example, in an enterprise software company, sales rep productivity is almost certainly a key metric. Show the average rep productivity metric for the past two years and spell out the improvement you are assuming in the FY14 plan. Do the same for all the key metrics. As a board member, the question in my mind is always this, “What do I have to believe will stay the same, or get better, to believe in this plan?” Your job is to make it easy for board members to answer this question.
Simplify the Assumptions
Keep the assumptions simple. A good plan will include lots of detail because teams need detail to get the plan right. However, to have a meaningful conversation with the board, reduce your plan to a small number of key drivers. Boards don’t like to see just the financial statements and a 10MB model. Instead, show them ten key assumptions for FY14 and, for context, provide the actual results alongside each assumption for FY12 and FY13.
Use the Company KPIs
The assumptions you lay out in the annual plan should be the same metrics that the operations/sales team uses to manage the business. That way, the team is fluent with the metrics and becomes progressively more comfortable as they use them throughout the year. If the finance team establishes KPIs but the rest of the team doesn’t use them, the budget becomes divorced from the reality of the business. The more you are aligned on metrics, the more you can push responsibility down in the organization.
You can predict costs with precision but revenue, not so much. Instead, you have to apply judgment to the revenue calculation. Board members find it helpful to understand the thought process that led to your revenue estimate. Suggestions include showing how to bridge revenue from last year to this year, doing multiple cross checks on the revenue build up, and providing some clarity around level of “slack” inserted. Every board member is trying to get a vision of how you will make your number. It’s your job to help them get there.
GAAP revenue is a trailing metric. Most companies will also use a forward-looking metric such as MRR (monthly recurring revenue), bookings, ACV (average contract value), or TCV (total contract value). Pick a single metric and work really hard to ensure that it is used consistently. Nothing is more frustrating than to have a metric in finance that the sales team simply ignores. Pick one and make it stick. If sales commissions are not based on it, it is not a real metric.
Mind the GAAP Gap
We prefer startups use metrics such as MRR or ACV because these measures take “unit of time” into account. Metrics like TCV can be distorted by multiyear bookings and you end up with a “GAAP gap”. This GAAP gap occurs when great bookings traction fails to materialize as GAAP revenue. After seeing this phenomenon many times, we’ve learned to monitor carefully how quickly a bookings metrics shows up as revenue. If bookings don’t lead to revenue, we know something is wrong with the model. Finance should always be checking for a GAAP gap.
Show a headcount chart across the key functional areas with the headcount adds by quarter. People are expensive. If revenue is not tracking, the least painful way to slow down the cash burn is to adjust the rate of new hires. It’s important to understand what the options are to manage headcount.
Show the expenses in the SEC/Accounting major categories: COGS, Sales and Marketing, R&D, G&A. It can also be helpful to see a simple list of the expenses classified by type: i.e. total salaries, total rent, marketing programs, etc but don’t provide these expense types without also showing them in the major accounting categories.
Marketing to Sales Sanity Check
You must have some simple math to explain how deals move from the top of the funnel all the way to closed deals. Don’t keep it a secret. And, make sure that marketing and sales agree on these assumptions and use them consistently. It is stunning how often I notice a disconnect between what marketing expects and what sales requires. As a high level sanity check, compare relative growth of marketing program dollars to the total volume of new sales required.
As a company matures, it can be helpful to think about the annual plan as a plan for several businesses under a larger umbrella. Some are in scaling mode, typically the core go-to-market business in North America, while others are new go-to-market initiatives, almost certainly consuming net cash. If your company is making an investment in international expansion or in a channel overlay strategy, call this out separately and explain how you will measure success.
Know Your Total Cash Needs
Any annual planning process will result in one of three outcomes on cash:
In all but the first scenario, you need as the CFO to have an answer to the following question, “How much does the company need to raise to reach cash flow breakeven?” It requires a multiyear plan. The plan will not be accurate but the alternative—no plan at all—is worse. When you end your presentation saying, “We exit this year with a $15MM burn and $5MM in the bank,” you leave the board hanging like a bad TV serial drama. State to the board exactly how much cash you need, in total.
Multi-Year Planning and Mid-Term Revisions
The big decision for most technology companies is how much to invest in sales and marketing. One reason for this challenge is that there is an inherent lag between when you invest in these functions and when the business starts generating revenue. We’ve seen a fairly consistent planning bias: companies show aggressive investment early on in the year and then taper off of investment to get to cash flow breakeven. The “cost” of under investment in sales and marketing—lower revenue growth—does not show up until the following year.
One way to highlight this issue is to do a multiyear projection as discussed above. Another way is to decide to have a mid-year check-in. If the company is tracking well, you can decide to green light more investment. If you are face challenges or if capital is scarce, you stick with the original plan.
Aim to be succinct. It should take you only 5 to 10 slides, max, to lay out the assumptions, do the revenue build up, and show the headcounts adds. After that point, you lose everyone’s attention. Once you’ve gone over these topics, show the basic financials by quarter for the planning period and perhaps a multi-year profit and loss statement covering both historical numbers and one to three years of projections. Everything else can go in the Appendix.
The list of items people could ask to see or might find useful is long. This is why some annual plan presentations take forever. Here is a partial list of information that gets requested:
I’m not saying that if you follow these steps, the annual plan review process will be painless. By taking this advice to heart, however, you will be more prepared for the questions you will receive and, likely, more confident in your delivery.
We are excited to announce our investment in Chef. The investment thesis is simple: every company in the world runs on software and—to survive—every company in the world has to run faster. This creates a massive need to speed up the process of developing and deploying code and, in turn, has led to the “DevOps” approach to developing applications. The idea behind DevOps is simple: if Development (the teams that write the code) can work more closely with Operations (the teams that run the resulting systems), they can deploy projects faster with fewer errors. This arrangement works; a DevOps-centered methodology is clearly the way of the future.
Chef Makes DevOps Possible
The Chef automation platform helps organizations switch to DevOps by enabling IT operations and developers to describe, model, and automate infrastructure as code. The Chef automation platform uses cookbooks (reusable code definitions that are written using the Ruby programming language). Each cookbook defines a scenario, such as everything needed to set up and configure a postgresql database together with all required components (templates, versions, metadata, etc.). There are over 1000 cookbooks, including those for databases, operating systems, applications, networking, and monitoring.
Armed with a cookbook, an IT management team can do everything from installing an operating system, to installing and configuring servers on instances, to configuring how the instances and software communicate with one another, simply and efficiently.
The following diagram illustrates how Chef works:
How Big is the IT Automation Opportunity?
The need to automate IT is not new. The IT systems management market has been around as long as the IT markets itself. In fact, every new IT architecture, from mainframes, to minis, to client server to web, has produced a crop of successful systems management companies. However few—or none—of them have been able to make the transition from an old architecture to a new architecture. They’ve either had to purchase to advance or have declined in relevance.
We believe that there is another architectural shift happening today in IT and so do the analysts per this Forrester Report. What’s changing now is not the underlying hardware, which has been commoditized servers for the last 10+ years, nor the interface to the end user, which will remain the browser. Instead, the shift is involves where hardware is deployed and how larger systems are put together.
Quantity has a quality all its own, (attrib. J. Stalin). The sheer quantity of servers under management, and the sprawl of those servers within the enterprise and on cloud deployments, makes the old way of running systems untenable. There are not enough sys admins alive to staff every IT company on a 100:1, servers to sys admin, ratio; existing datacenter solutions like HP-Opsware, or BMS-Bladelogic, to name two of the most successful products built in the early 2000s, just can’t handle this challenge. Throw in the need for faster change management and the problem becomes even more acute. The only solutions for this management problem are a DevOps approach and tools like Chef. Again see point #7 in the Forrester Report.
The IT Systems Management is a $9Bn/year market. We believe that a significant percentage of that market will move to a more robust—yet simpler—configuration and automation solution available from vendors like Chef. We are excited by this opportunity.
We like Chef’s team led by CEO Barry Crist and founder Adam Jacob. I will also stop to remember a core member of the Chef team, former CEO, Mitch Hill. Mitch passed away last week. I did not know Mitch—he was not CEO when we made the investment—but comments from his long time colleagues consistently describe him as a genuinely great person as well as a successful business leader. He and his family are in my thoughts as I write this. There is nothing that can be said that really ameliorates a loss like this. What we can do, however, is pay tribute and respect to the work he did to get Chef to the success and value it has today.
Scale is looking forward to working with Chef to build the systems management company of the cloud decade.
Today marks the announcement of our investment in Bill.com, a provider of integrated bill payment, invoicing and cash flow management solutions for small businesses. There are certain characteristics we look for in an investment and Bill.com proved to be a perfect fit for ScaleVP. Here is what gets me excited about this deal:
1) The need for the product
I was CEO of a start-up. The job I hated most was the job I had to do the most, especially when times were tough, juggling cash to stay alive. I would sit there at night, trying to figure out when cash would come in and what bills I could afford to pay. “If those guys pay me Friday, I can cover wages and three vendor invoices, if they push until Tuesday, I can only cover wages and one vendor. What should I do?” I would work with my CFO, write notes, make contingency plans, and then have it all upset when I had to pay an unexpected bill at the last minute.
Every startup CEO or CFO knows this dance and knows what a vital but broken process it is. Vital because while businesses are ultimately scored based on Profit and Loss, they survive every day based on Cash Flow. Broken because random spreadsheets plus sticky notes to the CFO are a band-aid, not a solution.
You might think that an accounting package or even a budgeting package solves this problem. If you have tried either solution, this is where you laugh derisively. Juggling near in cash falls squarely in the gap between accounting – which shows you what has happened, and budgeting, which shows you what should happen over the next year if everything goes according to plan. Neither product can help you figure out what bills are approved, whom to pay next week and what to do if the customer only pays half of what they promised.
2) The Bill.com solution
Bill.com solves this problem. The service allows a small business CEO, or finance team, to plan out when bills are paid, set up the approval process and then make payments as cash is received. For larger companies the service can set up internal approval mechanisms, so that individual managers, who would never get access to the accounting system, can approve vendor payments based on having verified the work done. Using the Internet, companies can collaborate with suppliers and customers to more quickly sort out queries on bills, with the result of getting paid quickly. Once a company tries the product, it will never go back to paper.
We love to invest in companies that simplify complex broken business processes. We especially love to solve problems that every business faces because that is how to build a big enterprise software company. Box made file sharing simple, Docusign eliminated the need to ever fax a signature again, and now we believe Bill.com will eliminate the need for CEO’s to stay up at night and write multiple “what if” plans to keep vendors from shutting them off.
3) The team
We like the team. CEO, Rene Lacerte, lives this stuff. A successful serial entrepreneur with a family background in the financial software business, he has lived the reality of the problem he is solving. When you talk to him about the product, it is not a theoretical discussion but a practical one about how to make the life of the CEO or CFO better. Around him he has assembled an experienced team of executives, some from his prior company Paycycle and some from other great SaaS companies like Salesforce.
4) The Timing
Now is the time for Bill.com. It is stunning that ten plus years after consumers got online banking and Fortune 1000 companies got multi-million dollar treasury management systems, most small businesses are still doing this by hand or by building a spreadsheet off the accounting system to track cash. The reason is part technology and part distribution. It is really expensive to reach small businesses at scale (pun in part intended) but we have been fortunate to have in our portfolio companies like Ring Central and Hubspot who have solved this and successfully reached thousands and thousands of SMB customers. We think we know how to make this happen and the timing for Bill.com feels right. Partnerships are key and the company is seeing strong interest from financial institutions (Bank of America, Fifth Third and American Express all invested in this round), software companies and accounting firms to distribute the product.
5) The Upside
Bill.com is really focused today on the small and medium sized customer but we would not be surprised to see them grow upmarket over time. We have seen over and over again that the “adoption cycle” for great SaaS products starts with small businesses using the product and enterprises sticking with prior solutions, but that over time, the elegance and simplicity of the new solutions results in adoption moving upmarket. In fact, we are seeing this so frequently, that is the theme of our next Scaling Dinner, taking place this week and featuring Lesley Young of Box and Zack Urlocker formerly of MySQL and Zendesk.
Salesforce has been the biggest beneficiary of this, and is now signing single deals in the multi millions. Many of our portfolio companies have seen the same upward tug and we would not be surprised if Bill.com was to see it too. The focus would probably be less on cash juggling and more on workflow and authorizations but the core engine is the same.
We are delighted to be investors in Bill.com and we look forward to a world where Bill.com ensures no CEO or CFO spends their evenings juggling cash projections on a sticky note or a jury-rigged spreadsheet, leaving more time for the important stuff…new products, new customers or even more time with the family.
This article first appeared in Entrepreneur.
As an entrepreneur with big dreams and a killer idea, walking into an investor meeting can be a bit of a reality check. VCs aren’t just going to fall over and swoon about your huge vision.
To sell VCs on your billion-dollar idea, you are going to get a cornucopia of questions thrown your way. Most questions dig into four issues for a company: market, strategy, financials and team.
While some may believe VC questions are off-base, realize there is a method to our madness: We want to know how prepared the entrepreneur is for the startup journey.
Here I break down a few common questions and provide insight into why are random inquiries, actually have logic behind them.
Q: Why hasn’t there been a big company in this space yet?
A: When VCs ask questions centered around an industry or inquire about the number of companies in a sector, they are trying to assess the market size and timing of your product or service space.
Don’t make the mistake of just saying, “This is going to be huge.” If there is a lot of potential in the market for growth, you must support your claims with facts and a reason for why now is the right time to act.
Providing detailed, specific insights into technology and societal or business-model trends that make your idea ripe now will help a VC understand why the market is, or will be, large when you are serving it. For example, when my VC firm Scale Venture Partners invested in cloud-sharing company Box, we focused on the cost trends of cloud storage and broadband, and concluded a theoretically large market was about to emerge.
Q: Can you talk about customer acquisition costs?
A: When you are talking to VCs, you are talking about money. VCs will ask entrepreneurs all sorts of questions relating to financial information, as they want to invest in companies that can become market leaders and highly profitable on moderate amounts of capital.
For growth-stage companies, a lot of diligence centers on your ability to scale profitably. Questions about sales cycles, retention rates and account expansion possibilities let us mentally build a growth profit and loss in our head. We look at your financial model to understand your business sense. We then use that information to build our own model to predict the company’s profits and our returns.
Q: Why won’t a big company copy that feature?
A: Questions about your startup’s features, advantages and uniqueness are asked to suss out what strategies you have in place to make your company sustainably different, lower cost or both. They are also used to probe your plan’s longevity.
And don’t get caught off guard, if VCs ask detailed, but seemingly unrelated questions regarding strategy. Some of the ones I have tossed out there include, “Where will you source your raw materials?” and “How did Company X gain advantage over Company Y back in 2005?” I am looking to assess the entrepreneurs understanding of her or his industry and strategy potential.
Also, if a VC asks why you decided to get involved in the market, it isn’t just about your passions. This question also presses on your unique insights on customer needs and market dynamics to illustrate an emerging opportunity.
Q: What storms has your team weathered together?
A: “Tell me about your team” gets asked in almost every meeting. In addition to your resumes, we want to understand your relationships: Are your people naturally complementary? Did the leader attract great talent, or have to hunt for it? How does the team deal with stress? Can your initial tight team also attract and absorb new talent? While you may be able to spew out anecdotes about how wonderful your team is, keep in mind, VCs also watch your body language. Your actions speak volumes greater than words.
Understanding how you approach opportunities, people and problems color every question. Venture capital is a long-term investment business. If we invest, we’ll be working together for years. Keep in mind, we’re watching how graciously you manage the meeting, get us on topic and react to stress: It isn’t a secret that every interaction is evaluative. The process helps you too, as you should be assessing whether the VC is the right partner for your endeavor.
It has been a great year to invest in our future at ScaleVP. Not only have we been adding a handful of exciting new deals to our portfolio, we have been active in making the most important investments that we can make – great additions to our team. We are very pleased to announce that Ariel Tseitlin has joined ScaleVP from Netflix where he was the Director of Cloud Solutions. As a Venture Partner, Ariel will join Andy Vitus in building our cloud computing portfolio which has been a focus area for ScaleVP for some time. Andy met Ariel over a ScaleVP dinner he hosted this summer at the OSCON open source conference and walked away impressed with Ariel’s depth of knowledge, which would be hard to match given his role at Netflix, and with the sense that he would be a good fit with the ScaleVP team.
Netflix is one of the industry’s pioneers in building a modern distributed service, making the bold choice to run entirely on a public cloud infrastructure. Not only have they led the industry in innovation but have done so in an open and transparent way to help others following a similar path. Ariel’s team created and released into the open source community many components of the NetflixOSS Cloud Platform that have enabled Netflix to build and operate a highly available, scalable and resilient system. Some of the more widely covered components include what is now famously known as the “Simian Army”, including the Chaos Monkey, which is technology that creates actual failures to ensure the systems running the Netflix streaming service remain resilient and reliable. Ariel speaks regularly, and will continue to, on trends and best practices within this market.
ScaleVP believes that this trend from traditional owned data centers to a shared “Infrastructure-as-a-Service” (IaaS) is a fundamental shift in computing architecture that will provide multiple investing opportunities and is still in its early phases. ScaleVP is looking to invest in more companies that are poised to take advantage of this shift and even help accelerate it. Recent cloud-related investments we have made include Boundary, PubNub and Datastax. That was the reason we focused on adding a best-in-class cloud operating executive like Ariel to our team.
Prior to Netflix, Ariel was VP of Technology and Products at Sungevity and before that was the Founder & CEO of CTOWorks, a software consultancy helping early-stage entrepreneurs deliver their first product to market. Earlier in his career, Ariel held senior management positions at Siebel Systems and Oracle. Ariel holds a bachelor’s degree in Computer Science from UC Berkeley and an MBA with honors from the Wharton School of Business at the University of Pennsylvania which he attended at on nights and weekends and where he got bit by the investing bug, making him a perfect fit for us.
Please join us in welcoming Ariel to the ScaleVP team!
One of the least intuitive aspects of a startup is knowing when and how to spend money in the pursuit of success. The answer is nuanced.
The first mistake startups often make is “premature scaling” meaning spending money before a company can use it productively. This was documented with some academic research by the Startup Genome, which should be required reading for any entrepreneur. Companies that spend money before being ready to scale will likely waste that money.
Read more of Kate’s thoughts on to when to scale at The Accelerators, a WSJ blog of startup mentors discussing strategies and challenges of creating a new business.
If you’re involved in enterprise IT you’ve undoubtedly seen one of Gartner’s “Magic Quadrant” charts. They cover everything from security software, to business intelligence, to data center networking. In every Magic Quadrant, you find the most attractive companies—the visionaries and market disruptors—in the top right hand corner. Vendors refer to these charts to explain their market opportunity; prospective buyers use them to select vendors. Gartner does not decide the future of technology, but the firm certainly documents it. The significance of Gartner’s work is why the recent Gartner Magic Quadrant chart on Infrastructure as a Service (Iaas) market should terrify the shareholders of companies such as HP, IBM, and Microsoft:
I believe this chart is the most important chart in enterprise IT. It covers the new trend of IaaS, where instead of buying storage, operating systems, deployed applications, and other infrastructure, enterprises rent these products from vendors in a low risk pay-as-you-go system. It is a new way of doing enterprise computing.
There’s Only One Winner
Two things make this chart important. The first is the sheer size of the market. We are not talking about a specific vertical or a single technical use case. We’re talking about “where and how enterprise computing is done.” Computing infrastructure is the $150B a year “Big Kahuna”, where all the money changes hands, and where companies from Microsoft, to IBM to HP make all their profits.
What makes this chart scary is the second key takeaway: if IaaS becomes the dominant computing model, Amazon Web Services is the only possible winner. It cannot be emphasized enough how stark this chart is. As an IT investor, I have seen myriads of these charts over the past twenty years. The usual format is to show ten companies, give or take, tightly clustered in the upper right quadrant and across the other three quadrants, with highly nuanced relative positions. Since Microsoft dominated the operating systems market, I cannot recollect seeing such a stark and clear Magic Quadrant for a market already worth an estimated $4B and growing extremely rapidly.
Will IaaS happen for the enterprise?
What is still not clear is how much market share IaaS will take in the enterprise? Will it be 5%, 20% or even 80%? That is not yet clear and all caveats apply: infrastructure investments might not occur this way, enterprises may be slow to adopt IaaS, and the cloud could prove to have too many security issues. Even if IaaS does happen, established vendors already offer private cloud offerings and managed hosting products that replicate some of the IaaS advantages, but with a more controlled, enterprise friendly face. If all else fails, it’s possible that the cash-rich IBMs, Microsofts and SAPs will acquire companies and catch up to the market disruptors.
Even in light of these possibilities, it feels like we’re in the middle chapters of a classic Innovators Dilemma story. AWS is cheap, flexible and evolving fast, with no ties to an installed base. In every platform shift, there are valid reasons why the incumbents should survive but, over time, the power of cheap, the power of flexible, and the power of new, sucks up all the profit dollars. I don’t envy the incumbents here. My gut tells me we are looking at the NCR, Bull, and DEC of tomorrow— great companies living off a residual of the past that got left behind in a platform shift.
Scale Ventures Partners’ Role
As VCs, we are in the revolution financing business, so revolutions are good for business. Right now we are looking for more companies that are poised to take advantage of this shift and even help accelerate it. Recent investments like Boundary, and PubNub assume a cloud based infrastructure and are working to improve it. Companies like Datastax build big data clusters that implicitly assume hundreds of additional servers can be spun up in the public cloud if required. Investments we have pending and the deals that we are evaluating today are all about taking AWS and adding the services that will make it enterprise grade. As we build our team, we are looking to add people who understand where the world is going and how starts up will profit from this shift from on-premise resources—and major capital investments—to a more flexible, incremental investment model.
We are huge believers in the nail it before you scale it doctrine, expounded most cogently by Steve Blank. We also believe that once you nail it, you have to scale it and scale it quickly; that is where we come in. We like to invest in innovative technology companies, after product market fit has been established, a go-to-market channel has been solidified and early customers are happy. By that point, a company is ready to scale. On average our companies have grown revenues 92% in the year after our investment.
We have learned that there is no magic moment when the answer to “can you scale?” is obvious. Instead we have seen that, just as establishing product market fit is a process of discovery, so too is scaling. The scaling plan at $1M can be adding two telesales reps, at $10M adding field sales and at $100M, adding international and getting channel leverage. In every case what we are looking to understand is a roughly predictable relationship between adding sales and marketing expenses and seeing revenues grow– usually with some lag. As long as that relationship is understood, it pays to invest aggressively to build winners.
We have been fortunate to be involved with some great companies. We aim to provide a consistent perspective on growth that can help them scale but are more than mindful that the real work is being done by the teams making it happen every day.
Check out this Infographic to see if ScaleVP is the right investment partner for you.
Never underestimate the power of a great collaboration!
At ScaleVP one of the things we care most about is collaborating with entrepreneurs about how to successfully scale their businesses to become the dominant providers in their sectors. When it comes to finding and helping the best companies grow, experienced hands are incredibly valuable. When that comes in the form of a technology leader we know well and enjoy collaborating with, it is even better.
We are thrilled to announce that one of our favorite collaborators, Zack Urlocker, has returned to ScaleVP as an Executive-in-Residence (EIR). Zack is helping us evaluate new investments and is also working one-on-one with a number of ScaleVP’s entrepreneurs on how and when to scale their commercial efforts. We met Zack at MySQL where he ran marketing, engineering and product before the company was sold to Sun. Zack joined us as an EIR in 2011 and focused on evaluating the early applications for Big Data and the development of NoSQL databases that eventually led to our recent investments in Datastax and Datasift. Zack subsequently joined Zendesk as Chief Operating Officer where he grew the customer base 6 fold and the user base 9 fold – to over 200 million users. Zack returns to ScaleVP with significant hands on experience transitioning companies from product introduction to market leadership. It’s a perfect match for our investing focus and a great addition to the conversation around the ScaleVP table. As he shared last week at RedMonk’s Monktoberfest conference for entrepreneurs, “scaling is an art not a science …but it can be mastered if treated like a discipline.”
I am also pleased to share that we have added a new Associate, Gregory Silva, to our investment team. Gregory was most recently an analyst with Piper Jaffrey & Co, helping evaluate the technology landscape and strategic alternatives for growth technology companies. Given his strength in following tech trends, he has hit the ground running. Gregory is busy evaluating a number of new companies and sectors within our focus areas and is a great addition to our team.
Welcome Zack and Gregory to the ScaleVP team…great people times two!
RingCentral marked a significant milestone today with an initial public offering.
When Vlad Shmunis chose Scale Venture Partners to invest in the company, RingCentral had cracked the code on delivering a seamless state-of-the-art phone system for the modern, mobile workforce. But more importantly, they were at the intersection of three rising mega-trends that were transforming how business was being conducted – Cloud Computing in the enterprise, Software-as-a-Service across all business functions and ubiquitous, consumer-driven Mobile computing and telephony.
Businesses had new demands on their phone systems, demands that met the evolving needs of its users lifestyles. A similar transformation had happened a decade earlier with the wifi-revolution where corporate IT departments were inundated with employees demanding the same wireless internet access throughout the office as they had at home. RingCentral saw a similar opportunity to replace the dated, legacy telephony systems and provide businesses with the same reliability of said systems but with the flexibility and ease of any device, any where.
But the transformation of the workplace is ongoing, with the workplace itself is becoming more virtual — held together with software, internet communications, and the latest mobile devices. From the smallest business to the most entrenched enterprise, great innovations in productivity and communications continue and RingCentral will be there, innovating alongside its customers and working to keep them connected no matter how far they go.
Today we congratulate Vlad on reaching another remarkable milestone among so many great accomplishments he and his team have made. We’re honored to have been a part of some of RingCentral’s most crucial chapters and can’t wait to see more of their story unfold.