The Rockies Venture Club’s “Colorado IT Live”, co-sponsored by the Boulder Software Club, offered a different format than the year’s previous dinner meetings. Instead of opening to a panel discussion, the presenting software companies were the main event this month. Each of the three companies offered a presentation which was then critiqued by a separate venture capitalist.
Kicking off the night was Lorenzo Carver, CEO of Liquid Scenarios. The technology behind Liquid Scenarios is able to import financial statements – in essentially any form -into a software program without any labeling or tagging. With this data, the program is able to produce various graphs and charts and allows users to model complex scenarios within minutes. Carver demonstrated the ease with which options payouts could be evaluated under a variety of assumptions for a bank recently receiving TARP funding. The company’s initial target market is venture capitalists, of whom Liquid Scenarios already counts several as customers, but expansion potential exists to any frequent users of financial data. Liquid Scenarios, which launched its first software in 2007, has produced several robust products on just over $700K in investment, primarily financed through gross margins. Carver also noted one of the company’s new efforts – OpenTARP – which is focused on aggregating the TARP financial data and facilitating modeling. Frank Mendicino of Access Venture Partners offered comments to Carver, noting he liked the company’s efforts “to focus on a segment” (VCs) and work to “conquer that segment” while still keeping a broader market in mind.
Eric Remer of PaySimple took the stage next to present his company’s solution for payment collection, targeted at small and medium sized businesses (SMBs). The Software-as-a-Service product offers a variety of features including credit card processing, email invoicing, recurring invoicing, and e-check processing, all of which are designed to represent an “end to end payment solution” for customers. To date the company has mainly sold through direct sales but is developing an enterprise partnering strategy where its product would be offered by partners that have a broad horizontal reach into SMBs. PaySimple earns revenue both through a monthly fee (~$30-35/month) for the service as well as a transaction processing fee. Remer noted that revenues for each customer tend to increase over time with continued use, and attrition is seen mainly from low revenue customers. Founded in 2005, the company, which has 42 full time employees, expects customer numbers to more than double this year. Jim Conboy of Wolf Ventures provided the critique noting it seems that PaySimple had “cracked the model” of servicing the needs of small to midsize businesses cost-effectively.
Keith Mountain concluded the night presenting Spatial Corporation. Spatial, a company with a 23 year history, does not represent the typical pitch to a VC. The company IPO’d in 1996 was later bought by Dassault Systems of France, and under Dassault initially operated as an R&D cost center for the larger company. Yet Spatial in now profitable in its own right – boasting cash flow in the millions in 2008 – and is considering a management buy-out. The company, which recently moved its offices from Boulder to Broomfield, provides software components to application developers. Specifically, the company offers a “solid modeler” for use within design, engineering, and manufacturing software (CAD, CAM, CAE and EDA). The company receives a percentage of revenue – usually between 3-10% depending on the amount of value represented by Spatial’s components – from the application developer who sells to the end user. Mountain believes the company has recently “laid the foundations for growth,” noting the company’s adoption of an agile programming model. Within the broader market for its product, Spatial is focused on addressing the needs of high growth areas such as 3D modeling for chip development. Seth Levine of the Foundry Group provided feedback to Mountain noting the company’s “impressive revenue growth” along with a desire to see more clearly the “upside [management would bring] by running the firm on its own.”
Rockies Venture Club (RVC) was one of the first non-profit organizations in the country to help entrepreneurs launch and manage high-growth potential companies. Founded in 1985, RVC is the Rocky Mountain Region’s premier networking organization that connects entrepreneurs, service professionals, investors, venture capitalists and other funding sources. March’s event was also supported by the Boulder Software Club which provides educational and networking opportunities for software company executives and qualified service providers to the industry. The next RVC dinner meeting will be held on Wednesday, April 8 at the Denver Marriott City Center at 5 pm (Topic – TBD). The RVC is also preparing for the Colorado Capital Conference on May 12. Companies seeking to present at the conference must apply by April 7.
