Guru founder Rick Nucci raised $2.7 million on the basis of an idea and a team. He had no product or customers to speak of.
It wasn’t always that easy for him.
No, looking for venture capital for his first startup, Boomi, was actually quite painful.
That was back in 2007. Boomi CEO Bob Moul was leading the fundraising efforts.
“We were selling a cloud solution, which back then was early,” said Nucci, now 39. “Larry Ellison [CEO of Oracle] was dismissing it as a fad.”
There was also the fact that they were in Philadelphia.
When pitching New York or Silicon Valley VCs, “it was always a question we had to answer,” Nucci said. (That has since changed, he added.)
Finally, they found New York City investors FirstMark Capital, which led Boomi’s $4 million round. Two years later, Dell bought Boomi for an undisclosed amount.
Which explains why this time around, it was much easier to land venture dollars.
Guru is Nucci’s new business, founded with Mitchell Stewart, Boomi’s first engineer. The startup closed a $2.7 million round at the end of 2013 — a few months after Nucci was appointed Philly Startup Leaders president — but hasn’t gone public about the news until now. (We reported on Guru’s first SEC filing in 2013.) The company wanted to wait until it had traction — Guru has 200 active customers, Nucci said in an interview late last month in his Old City office. Across those client companies, that adds up to 1,000 users, Nucci said.
The product is a Chrome extension that’s like a tricked-out internal wiki, offering information that staffers can use to, say, close a deal or respond to a customer complaint. It’s a response to work app overload (Slack, Google Docs, Trello, etc.). RJMetrics recently wrote a glowing blog post about how Guru helped onboard new sales reps and get reps from email to phone-call faster.
Like it did with Boomi, FirstMark Capital led the round for Guru. FirstMark’s Amish Jani, who was on the Boomi board, joined the board. Other investors include Salesforce Ventures and Michael Dell’s personal investment fund, MSD Capital, and angel investors like San Francisco-based former Salesforce exec Brett Queener and West Chester-based Michael West, the so-called “Godfather of Boomi.”
West was the first angel investor in Boomi, giving the company the cash infusion it needed to get its first paying customers, Nucci said. He also played interim CEO and CFO roles.
When it came to pitching investors, location wasn’t an issue like it was back in 2007.
“For this round, no one questioned where we were,” Nucci said.
In fact, Stewart added, it was a benefit because it meant not paying the high costs of running a business in New York or Silicon Valley.
Nucci and Stewart have worked together since they were just out of college at the Eddystone, Pa., office of a Dallas software company called EXE Technologies. Stewart left to pursue a startup that, in his words, “failed miserably,” and when he was looking for a job, the first person he called was Brian Mozdehi, the Boomi cofounder who also spent time at EXE. That was how Stewart, who was 25 at the time, came to join Boomi. By the time he left in 2013, he was running a team of roughly 30 engineers at Dell.
Stewart, now 38, said he left because he wanted to get back into the startup game.
“After working at a real large corporation for three years, it became clear that that wasn’t my cup of tea,” the Malvern resident said.
About half the 11-person team at Guru came from Boomi, including Diane Stern Ruth, who heads business development, and chief architect Peter Michel. They work out of a stylish third-floor office on Old City’s Strawberry Street, complete with exposed beams, hardwood floors and a creepy old-fashioned elevator. (It’s the building that housed the original Indy Hall location.)
Aside from the fundraising part being less painful, Nucci and Stewart say it’s much easier to be an entrepreneur now than it was a decade ago. You don’t have handcraft your own cloud, the way they did for Boomi, they can just use Amazon Web Services. You can find a dozen guides online on how to launch your product, whereas back then, there was no playbook, Nucci said.
But given their past success, the one thing that’s harder?
The pressure to do it again, coupled with the idea that you know what you’re talking about just because you had one exit.
“The harder thing, for me, is the expectation — and these are all self-driven expectations — of wanting to be able to build something cool again and not be a one-hit wonder, to use a lame term, but wanting to build another meaningful company,” Nucci said. “That’s sort of, whatever, a deficiency in Rick. I probably shouldn’t be thinking about that.”
He went on: “I think where that manifests in being harder is, it’s really important to be challenged when you’re building a product and building a company. I would never want [a situation where] I say something that I believe in and they take my word for it, like Rick’s built a company before, he knows. It’s like, no, Rick can be wrong. It’s important for people to push back on you and challenge you and criticize you. I want to be challenged and criticized.”
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