GoodData founder Roman Stanek explains what happened when he started to seek financing on September 15, 2008, the same day Lehman Brothers collapsed.
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00:07 Roman Stanek: Everybody understood that maybe one day we will run out of money and that's gonna be it, but we didn't wanna kind of accept that defeat.
In 2007, Roman Stanek, who grew up in the Czech Republic, founded GoodData, which sells data analysis to businesses.
On September 15th, 2008, after 18 months of planning, Roman was ready to seek a first round of seed financing.
00:27 Stanek: I landed in New York. I opened a newspaper and I saw the news that Lehman Brothers failed. Initially, you assume, "Good thing, that was such a small company. How could I be affected by this? Is this something that affects big banks? But I'm gonna raise a couple of million dollars and that's one of these and I've done it before and I've done it in very difficult times before." So, I didn't expect any major change. I just noticed that, it is bad and I said, "Well, that's bad timing," and that happened to me before.
Roman met with more than 30 VCs in three months.
01:03 Stanek: So, one day, I had dinner with my friend who actually was VC. He is not VC anymore and he told me that I have no chance of raising money, that essentially VCs at that time didn't have enough money for their existing portfolios. They need to first weed out the existing product for the companies that were not gonna make it. And so my chance for actually raising money was exactly zero. And I realized that this is absolutely serious, that this is probably the most serious time of my life. I cannot just give up. I will have to fight for this. So, I left that dinner and I started to plan some sort of emergency planning. "What is it that we're gonna do as a company to extend our runway?" I looked at it and I said, "Well, this is gonna take a long time and I have to actually make some sacrifices." I liked transparency, so I went back to my people and I said, "Look, this is most serious than anybody would have ever expected." I asked everybody, "What's the minimum amount of cash they actually need that month?"
02:09 Stanek: There was always this kind of expectation that I will actually pay the rest later, but in order to cut cash, we essentially delayed most of the payments. That's how you extend your runway is that you don't pay for anything that you don't need to pay. You tell people, "Well, I'm gonna pay you in six months." And with employees, it's difficult when people have families and mortgages and so on. So, everybody had to make... I had to make some sort of special arrangement, "How much money do you need?" But the beauty of the fact that it was a global crisis, that made it very obvious for everybody that I didn't make it up, that that's not my fault. It was in newspapers everywhere. So, that's why we all approached it very differently and we said this is, "We will survive this."
GoodData managed to extend its runway four months beyond what Roman initially prepared for.
On April 1st, 2009, the company raised $7 million led by General Catalyst Partners.
03:09 Stanek: I do believe that being able to survive this kind of event makes the company stronger. If you'll get history of high tech, the best companies were always created in some sort of a crisis. They didn't start in the boom as they started in '80s. They started... At a time, Google got big in post-2000. So, it's usually, the company that survives some sort of a big crisis is actually getting some sort of head-start because there is less competition, less noise. I usually tell people that when you see me raising money, you should sell because that means that some major effect, catastrophic effect is coming, but at the end of the day, if you can get through a major crisis, then you can actually build a much stronger company.
Today, GoodData, which has since raised another $46.5 million in venture funding, has more than 6,000 clients around the world, including Pandora and Time Warner Cable.
Though he won't disclose the company's revenue, Roman says it is expected to triple this year over 2011.
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