I recently got some excellent feedback from an entrepreneur that I have worked with in the past and he told me that many of the venture blog posts are full of buzz words and high level strategy and one of the things he was interested in learning more about is how and why I make the investments that I do. Great subject. The company announced the funding round today. For GuideSpark, the decision was simply (1) revenue momentum and (2) an outstanding team.
GuideSpark is a digital video employee communications company with a SaaS solution that transforms how companies engage and inform their workforce about key topics such as healthcare reform and company benefits. The company was founded in 2008 and today has about 50 employees. I met the team on Valentine’s Day and we closed the investment on April 23rd. Several other venture firms passed. Though I know it felt like an eternity for the team, it was a relatively quick first meeting to close in just over 60 days.
The team at GuideSpark is impressive. I obviously got to know the executive team the best but have had the chance to meet just about everyone and it’s just an impressive group all around. These are people I want to work with and would work for if I had some skill that was still useful in an operating capacity. Just one example, the CEO and founder Keith Kitani is an impressive individual. He struggled with the business for several years before finally figuring out the product market fit that really worked to accelerate the business. Success so far hasn’t come easy for him and his other co-founders but they have persevered and iterated on the product making progress (in terms of revenue and customers) with each turn of the offering. The two other founders – John Wolff (Channels) and Joe Larocque (Customer Success) also deserve a lot of credit for supporting the company through some challenging times and also welcoming an organization around them in more senior positions. They are focused on GuideSpark being successful. I like a team that thinks that way. Many say it, but far fewer are able to act on it.
One of the things that has impressed me the most so far is Keith’s ability to hire a great team. Only really in the last 12 months has the business started to grow fast enough that he could rationalize other executive hires – and convince and recruit them to join. The executive team includes now Bob Benedict (CTO), Shep Maher (VP of Sales), Jennifer Turcotte (VP of Marketing), and Stephanie Copeland Weber (VP of Customer Success). It’s unusual for me to invest in a company with such a high caliber team at the start because usually the companies are earlier in their development. Just after I invested, we recruited Chris Krook as the VP of Finance who I think will also make a huge impact on the company’s success.
The second reason was customer and revenue momentum. The company has more than 100 customers today including names like 7-Eleven, Adobe, SurveyMonkey, DPR Construction, Leap Frog Enterprises and Infoblox. The number of customers has more than doubled since my first meeting in February. MRR has grown almost as fast – just under 100% growth over the same period of time – roughly 6 months. The numbers are still small but I saw clear momentum with customers and revenue. I am not a benefits expert. I am still educating myself about the market. The sales team at GuideSpark has a good time poking fun at me because I haven’t been able to close a customer for them (yet). I just don’t know F500 HR departments well – which is the general buyer. It’s a long way of saying – while I don’t know the specific HR market as well as I know other markets, I know SaaS and I believe the customer growth was a good proxy for everything else.