ANATOMY OF A DEAL
Within nine months of opening its doors, in July 1992, OpenVision Technologies Corp. had revenues of $12 million, 100 employees, a Fortune 1,000 client list, and offices in seven cities on two continents. Its $25 million in start-up capital represents the largest software-industry investment on record from a single venture-capital firm. Here's a snapshot of the deal:
COMPANY: OpenVision Technologies, in Pleasanton, Calif.
BUSINESS: designs network-management software for client-server networks.
STRATEGY: to acquire small niche software companies, creating a more effective distribution channel to large corporations.
FOUNDER: Michael S. Fields, 48, formerly president of Oracle USA, a $500-million division of database giant Oracle Corp.
PUBLISHED ESTIMATE OF 1993 REVENUES: $35 million.
ESTIMATED SIZE OF CLIENT-SERVER NETWORK MARKET BY 1995: $4.6 billion, according to the Gartner Group, in Stamford, Conn.
THE DEAL: Warburg, Pincus Ventures put in $25 million initially, with $10 million more in the third quarter of 1993 for two more acquisitions. In return it got voting control and a seat on the board. Warburg now owns 70%, and OpenVision employees, including Fields, own 30%.
HOW IT HAPPENED: OpenVision was the result of informal "industry discussions" Fields and Warburg, Pincus's William Janeway held for two years, says Fields. "Bill and I continued to see companies having difficulties deploying critical applications in client-server environments. Bill said, 'Let's put $25 million in and go!' Warburg made the investment before we even had a business plan."
-- Alessandra Bianchi* * *