Tuesday, June 8, 2010

Foundry backs BigDoor and CEO Keith Smith offers a peek behind the curtain

It's only Tuesday but it's already been a big week here at Founders Co-op. First, the news broke about our  newest company, RevenueLoan, raising $6MM to create a new and potentially disruptive finance offering for high-tech companies. Then BigDoor Media, a Founders Co-op portfolio company, announced a $5MM venture round led by Brad Feld at Foundry Group.

There's already lots of information and commentary in circulation about these two companies and what they're up to, but if you want a peek behind the scenes to understand how they came into being, you should absolutely read this post by Keith Smith, BigDoor's CEO and co-founder.

Instead of talking about what BigDoor does, Keith's post tells the story of how his company got off the ground, what role my partner Andy Sack and other early investors played in that process, and how Brad and his partners at Foundry engaged over a period of months before coming to a decision to invest. Here are a few choice quotes to whet your appetite for the full text:

On Andy's response to BigDoor's decision to scrap their first six months of work:
"Andy listened intently, probed with questions and within 30 minutes said, 'Great, let’s do it.'... We had made commitments to Andy and our other investors, and changing direction like this meant he was willing to forget every one of those prior promises and start down a new path.  We needed more capital and more runway than initially planned, and our investors immediately got behind us."
And on Foundry's evaluation process:
"Never once did anyone at Foundry ask us for projections or historical financials.  We didn’t talk about the deal, valuation or board composition and we never talked about exit timing or how much money they needed to make.  Product, customers and philosophy – that’s where we spent our time."
 Keith is an incredibly capable and disciplined entrepreneur, and everything he's accomplished to date is a result of his total commitment to making BigDoor a success. What's most gratifying about his post is his appreciation for the role that investors can play in building a new business, and his candor about the type of investor interaction and support that "feel right" to an experienced entrepreneur. In Keith's words:
"Brad and Andy are cut from the same cloth... and are both passionate to their core about helping startups."
I'm proud of the role that Andy and Founders Co-op played in Keith's early success, and incredibly excited that Keith and his team now get to work with Brad and his partners at Foundry Group to take BigDoor to the next level.