Faith,
Sacrifice Bbring Reward
Basement company gets big
investment
In Christine Springer's mind, the timing couldn't
have been worseHer husband, Don, wanted to start a software company in the worst
market in years, and she was two months' pregnant with their second child,
Charlie.
"I get a rush of excitement for him," said Springer. "But it's like: 'Oh, yeah, great. Oh, God."'
She knew what was coming. Months without income. Piles of debt on credit cards. Stress.
Her husband gave her a deadline of five months. If it wasn't working by then, he would quit.
He didn't quit. Now, two years later, three local venture capital firms - Mobius Ventures, Sequel Ventures and Vista Ventures - have invested $4 million in Springer's firm, called Dante Group.
The company has customers, a product and the financing needed to grow. The sacrifice to get there helped win the hearts of investors.
"They did whatever it took," said Kirk Holland, general partner at Vista Ventures.
"We're back to the days of real entrepreneurs," he said. "Those are the companies getting funded. They're the ones making the kind of sacrifice - personal and financial - to take companies further down the road."
For the first few weeks, Don Springer and his partner Tim Wolters cranked out computer code in the basement of Wolters' Rock Creek home.
Their software uses artificial intelligence to spot and monitor problems in any number of corporate business systems - from discovering a slowdown in shipping to failures in e-commerce systems.
The duo first realized the need for such software while running Ccgenesis, a Boulder firm that designs e-commerce software. Their client companies didn't know that their websites had glitches until it was too late and customers complained. Artificial intelligence could nab those problems before the customers knew about them.
The two hashed out plans on handcrafted white boards made with Mylar bought from Home Depot. They used home computers and borrowed equipment.
Wolters - who has a wife and a 4-year-old daughter - took out a home-equity line of credit to pay his mortgage. The Springers borrowed money from their parents.
"We laid it all on the line," said Wolters. "We were living off of whatever money we had saved up."
Each of them put $50,000 into the firm - money cashed out of the stock market and borrowed from friends and family.
Six weeks after their start, Dante Group convinced Raindance Communications, a Boulder Web conferencing firm, to try out the software. And eventually, Raindance let Dante Group share its office space and even loaned the firm computers and servers.
Yet getting investors and more customers on board wasn't easy.
"It was a double-edge sword," said Don Springer. "Investors wanted to see customers. But customers were saying, 'Do I bet on a company with two months of cash left?' You had to convince people with our passion and our drive."
The company's 10 employees were forced to go without pay periodically for months at a time.
"They only lost one employee through this whole cycle," said Vista Ventures' Holland.
In May 2002, the company signed a CEO, Pat Maley, 55, who has two decades in high-tech.
Last summer, the company inked a partnership with WebMethods to resell its software. A few months later, Dante had a similar agreement with Denver computer consultant Statera.
By last fall, Dante had nabbed $400,000 in financing from private investors and sealed a $200,000 customer contract with Corporate Express.
"We knew we had bought ourselves six or seven months," said Springer. "Every week we would look at the progress. We had this joke where I would say to Tim, 'We cannot die."'
Even $4 million from venture capitalists doesn't assure Dante of anything. It will allow the firm to hire 10 people and focus aggressively on marketing and sales.
"People used to think that raising a venture round meant success," said Holland. "But that's a milestone success, a short-term success, not a long-term success. We've got a long way to go."
Springer realizes that, too. And so does his wife, Christine.
"You just had to survive," he said. "She shared the same belief that things would work out eventually."