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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Klocwork’s $10m Financing

Comments (9)

I’m an early stage investor, so it’s unusual for me to make a late stage investment.  I made one last week in Klocwork, where I led a $10 million investment with existing investors Pequot, USVP, and Cisco.

One of the areas I like to invest in is companies that build software to help companies build software (more commonly known as IT Management as an umbrella over lots of sub-segments, including ALM, IDE, SQA, and Security).  In 2001, we spent some time working with a few entrepreneurs we knew trying to put together a pre-production source code “static analysis” product.  At the time, post-production code security / SQA tools were becoming the rage (e.g. the rapid rise of Mercury Interactive), but no one was concentrating on finding the security issues pre-production (or at the source code level.)  We weren’t able to pull something together – we just couldn’t convince ourselves that we had something fundable.  Eventually, we bagged the project, which happens when you are an early stage player.

At about the same time (2001), Klocwork was spun out of Nortel by Pequot Ventures.  Four years later, they’ve made spectacular progress and are the clear leader in this segment.  As the issues around security continue to increase, Klocwork’s relevance has also increased as the root cause of many security issues are buried in millions of lines of source code.  Klocwork has a highly effective and well proven (through numerous customers) approach to this problem.

Rajeev Batra – a principal in our California office – had been following Klocwork for a while.  As the round spun up, he roped me in because of my other investments in and around the IT Management segment (including Rally, Newmerix, and StillSecure).  I felt in love with the team in our first meeting I had with them and we quickly moved to a deal. 

The deal was a competitive one, so we moved quickly once we decided to take the plunge.  It was five weeks from my first meeting to the time we closed, although Rajeev had been working on the deal for a while.  My experience with the Klocwork team during the deal process exceeded my expectations and – while there’s always a honeymoon period on new investments – I feel really good about this one (and hope they do about me.)

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