Earlier in the month, Duane Jackson, CEO KashFlow posted his experience in raising a new round of finance. It had not gone well. At the time I decided I would not comment since we had an upcoming meeting scheduled. It was clear the experience had left Duane tired to the point of exhaustion. At the time, I said the best thing would be to go away, forget about it and the right answer would emerge. That answer – or rather an intriguing tidbit of an answer - turned up in a Tweet message from Duane:
My chairman/business partner/co-shareholder/mentor, Lord Young, has just agreed to provide the capital for my aggressive expansion plan! : )
The company is keeping the details under wraps for the time being but I expressed my view that this is a sensible move. It keeps the business under the control of the founders so their equity is not diluted as a group, demonstrates faith in the business by Lord Young while allowing Duane the flexibility he needs to take KashFlow to the next stage.It also removes uncertainty in the market that could be used as a piece of FUD by competitors.
The company is not saying much about what happens next but it is my understanding that it is looking for rock star senior management in a number of areas. This will remove the day to day pressure from the CEO having to wear many hats. Again, the right thing to do.
We’ll see in the coming days just how much capital the company has raised, at which point it will be possible to say more about what this means for the market as a whole. In the meantime, I imagine that Duane will sleep a lot easier than of late.
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Dennis,
Good of you to focus on this — large companies in the IT industry talk small to death these days, in part as a strategy and in part to gain as much CI as possible, and almost always on the dime of the small company. I’ve been so engaged myself (again) trying to form industry partnerships, and even with thousands of customers showing interest in such a partnership, long-term friendships, and lots of overlapping relationships, to include their biggest customers, partners, and investors, the big company seems unmotivated to do anything but benefit from our R&D.
One industry legend just confirmed again today what we both agree on, and he was co-founder and board member of one of the giants– most of the innovation comes from small companies, but large companies prefer to work with each other, and don’t know how to work with small companies. So they take all they can get on the dime of small companies as career enhancers. I’ve said the same thing many times, confirmed often. It’s shameful but the norm, and getting worse — circling of wagons since the financial crisis has been most aggressive I’ve seen in 30 years of business.
The only part of our economy that is even more broken than enterprise software and related is finance, particularly start-ups, and most especially in flyover regions of the world that lacks a guild of say SV or Frankfurt. Some exceptions still get through on occasion, however, despite seemingly every attempt to kill them off.
Best of luck to KashFlow — give me shout sometime Duane — Mark Montgomery, Kyield