We are truly thrilled today to announce that Bullpen’s first investment, Assistly, has been acquired by Salesforce.com. It is a fantastic outcome for Alex Bard and his team. They put together an outstanding team, product, and business model and have been rewarded as a result. Salesforce is getting a wonderful group of people with this purchase.
The story of how Bullpen got to lead the series B in Assistly is a special story and it’s really the story of the formation of our fund. I told a bit of it on stage at our VentureShift conference in July; let me write out the whole story here.
In the summer of 2009 several friends of mine, who are super angels, asked if I might be interested in joining one of their firms. I was in the process of stepping down as CEO of Aggregate Knowledge, having hired Dave Jakubowski. As a quick FYI, AK is really kicking butt under his leadership, and its perhaps the best hire I have ever made. That would make a good post in the future …
Being flattered by the offers to get involved in funds, I asked my two closest friends about how one should select who will be the big winner. It was really just a due diligence session like I had done previously when starting companies, or selling companies, etc. Those two guys were Duncan Davidson, who I worked with at InterTrust, SkyPilot, and AK, where he was on the board; and Richard Melmon, valley legend who started Electronic Arts, wrote the Apple marketing plan as consultant, was the first employee of VisaCorp (Visical), and the list goes on.
The diligence led to a quick realization: with the explosion in quality seed stage funds there would be an increasing gap for financing between the seed stage and the new series A (or B, unclear what round it was when valuation went from $5m-pre to $50-pre!). I asked some firms for data and some meetings. Duncan and I went on a 6 month roadshow and got to see just about every firm in business: Floodgate, First Round, Javelin, Avalon, Founder Collective, Tech Stars, OATV, True, Metamorphic, SV Angel, etc. etc. I literally think we did 30 some meetings.
The meeting with True Ventures was perhaps the most important one. I told Phil Black about the gap we had identified and showed him some of our data. We role played as if we were in business, going through some of his portfolio names and figuring out if it was a match. After just a few names it was clear that we would have a unique business. Phil said that I should come in again to meet Jon Callaghan.
In that second meeting, Phil introduced to me Jon as “did you know that Rational B just walked in the door”. I had heard that phrase before but had no idea that Jon actually coined it. Jon said hello and something to the effect that he was glad that someone finally had the balls to run with his idea. His idea being: doing a smaller B round will preserve optionality for the CEO, enabling both a very lucrative sale (as in the case of Assistly) or the ability to raise the really big round afterward and play for broke.
That meeting was in the summer in 2010. Let’s fast forward. In December of 2010, Phil Black calls me and says that he has the perfect deal for us. It’s called Assistly and I need to meet Alex Bard, its CEO. I met Alex and his team, did the diligence, and immediately realized this would be an outstanding group to place money on.
There was one problem, the fund wasn’t formed, we really hadn’t pitched any limited partners yet. So the week before Christmas 2010, Duncan, Rich and I called up our closest friends and told them the story. Within 48 hours we had the money we needed. Gunderson did an outstanding job getting the docs done at Christmas on a crazy timeline. And on December 23 the fund was formed, and I believe the funds were wired to Assistly the same day.
We led the deal, and I can leave it Alex to explain why he picked us over the big names he could have worked with. It’s a real testament to the model that we were able to lead, and have both Index Ventures and eventually Salesforce follow.
So I would like to make a big personal thank you to a few people for getting us in business:
- Mike Maples for sparking my interest in the space and beginning the whole brainstorming
- Phil Black for calling our bluff and sending us this great deal
- Alex Bard for picking little Bullpen, thereby proving the model
In addition I would like to thank:
- The 30 or so funds that met with us to help us think it though
- Our limited partners who wired money basically the day before Christmas to make it happen
Now on to the next one!