Yesterday, I wrote a high level summary of this year’s Venture Capital in the Rockies conference. I thought I’d give the local press one more day to see if anyone was going to write something substantive about some of the companies presenting. I haven’t seen anything, so here are my thoughts on the companies I saw.
24 companies presented in two tracks so the most I could see was 12. I had a couple of conference calls during the day so I only managed to see 7 of them: Collective Intellect, Confio Software, HomeSphere, Solidware Technologies, iPosi, CreekPath Systems, and XAware. The only company on this list that I directly have an investment in is Collective Intellect, although I have indirect investments (through VC funds that I’m an LP in) in XAware as well as Collective Intellect. I’ve listed the companies in rank order starting with the one that I thought was most interesting / did the best job.
Collective Intellect: I backed the founders – Don Springer and Tim Wolters – in their previous company (Dante Group – acquired in 2003 by WebMethods.) Don and Tim are super second time entrepreneurs, and the way they’ve started up Collective Intellect shows. Their tag line is “filtering new media for the securities industry” – they are using a bunch of hard core computer science to analyze new media content (blogs, chat rooms, discussion forums) for public market fund traders, analysts, portfolio managers, and quants (i.e. the dudes at hedge funds.) The intersection of new media, heavy computer science, and the massive hedge fund dollars sounds like a good place to hunt. Don did a great presentation and announced their round of funding led by Appian Ventures.
Confio Software: I met the CEO and primary backer of Confio – Charlie Sanders – about 18 months ago when he first got involved with Confio and its cofounder Matt Larson. Charlie’s an impressive guy having been a senior exec at Seagate (and previously Conner Peripherals.) It sounds like 2005 was a very good year for them as they landed 40 new customers, although reading between the lines it appeared that one or two customers accounted for about 50% of their revenue. Confio’s market – IT performance management – is a crowded one, but they appear to be doing some unique stuff around digging into the Oracle database layer to look for root cause defects (ah – “root cause” – the holy grail of all APM companies.) Charlie a super salesman and is determined to scale the business up nicely on modest capital. He’s off to a good start.
XAware: Tim Harvey, the new CEO of XAware, did a super job of presenting after a mere three weeks on the job. I generally like XAware – it’s in a market segment (SOA middleware) that I like, understand, and have made some money in. However, I don’t understand their approach to the business. While they generated a respectable $3m of revenue last year, it appears that most of it came from financial services customers. Consequently, I don’t understand why they present themselves as a horizontal SOA middleware provider when they could be kicking ass in the deep pocketed financial services vertical.
HomeSphere: I’ve got to hand it to James Waldrop and his team – they raised money in 2000/2001, survived their market falling apart, focused on growing slower but getting profitable, and have accomplished that. They now have a respectable $10m business that sells two things: (1) manufacturer incentive and rebate service for through group buying (80%) and (2) construction management software (20%). While #1 is a solid growth business (and HomeSphere has likely gotten to an interesting critical mass), #2 looks like a flat to declining business. As a result, HomeSphere is looking to raise $10m to roll out three new lines of business (none of which I can remember a few days later.) I don’t understand why they’d do this – if I was on their board I’d say “no more money – stay profitable – grow aggressively in segment #1.”
Solidware Technologies: Sue Kunz, the CEO of Solidware, is a firecracker. I’ve known her and her gang for about a year and watched them do unnatural acts (ah – the joys of entrepreneurship) to get their “Splat Software” up and running. Splat is an SQA product (software quality assurance) that helps identify software defects through visual analysis of the source code. I declined to invest last year as I’ve already got an investment in a somewhat competitive company (Klocwork), but I’ve tried to be helpful and encouraging to Sue and her team because I like their style. I only caught the tail end of Sue’s presentation so I don’t know how she did, but she handled the Q&A nicely.
iPosi: I don’t get iPosi. They presented a vision for a set of E911 products based on GSM-based location combined with IP geolocation (they are talking to one of my companies – Quova – about working together.) I listened to the presentation and really didn’t understand either (a) what exactly they were going to do or (b) how they were going to do it. My brain was working hard when I saw their revenue slide – immediately afterwards my nose started bleeding and I started fantasizing about steep upward sloping exponential curves. I know – and like – a few of the people involved – I’m sure I’m missing something obvious.
CreekPath Systems: I remember looking at Creekpath in 2000 when it was originally spun off from Exabyte. I was pretty excited about funding it until one of my partners vomited all over the floor after meeting with the team. As a result I passed – am I’m glad I did. They’ve been through a lot of ups and downs and retooled their leadership team – again – last year. Creekpath is a good example of the endlessly elusive storage success animal (hardware or software) that tantalizes, but eludes, the Colorado VC. Maybe this will be the one, but as many have gone before them, they have a long road ahead of them. I keep hearing that none of the storage vendors have this, but then I think about EMC’s software group and just shake my head.
Oh, and Seth and Chris assured me that the skiing on Wednesday was outstanding and the skiing on Friday was social (e.g. not much fresh powder, but lots of friends hanging around, blue skies, and 60 degrees.)