Some of the world’s biggest companies and notable entrepreneurs trust us to help.
One of the biggest questions entrepreneurs ask is, “What can you do for me?” In a world of multiple venture firms all making great claims, it is hard to sort out how a VC sets itself apart from all the noise in our respective industries. At Pelion, we bring seasoned expertise, a dogged work ethic, and a sense of humor to the working relationship. We prefer to work this way and our clients do as well…
Read further or select a company and hear the honest story from a handful of CEOs.
We Started With The Grand Expectation Of Getting School Credit.
Who Knew It Would Turn Into Cloudflare?
Matthew Prince is the CEO and Co-founder of Cloudflare, a company that delivers two pretty impressive things: A significant improvement in website performance and a decrease in spam and other attacks. When asked why he was drawn to Pelion, it became clear that he had some pretty strong opinions. Not to mention a pretty good story about one heck of a life-changing school assignment. Here’s the whole story in his own words:
MATTHEW PRINCE: In the early days, Cloudflare was not the kind of investment that would normally attract Pelion’s attention. In fact, back in 2009, the investment landscape was anything but welcoming to early seed stage investments.
I began working on it at Harvard as a school project. And eventually, my partners and I won the HBS business plan competition. We didn’t have any plans to start a company, we just thought we were getting school credit. The next thing we knew, venture capitalists were actively seeking us out. It was then that Ben Dahl, a former classmate of Matthew’s, introduced us to Carl. He was sort of challenging, but in a friendly way. And he was gruff, but probing. All while being encouraging and helpful. Despite all the enthusiasm, though, it was pretty clear the timing just wasn’t right.
But looking back now, it’s pretty clear that evaluating potential is one of Pelion’s greatest strengths. They have an innate ability to recognize and accept what makes sense moving forward. What might not be an ideal investment at the present time, might very well prove to be ideal down the road.
Pelion’s ability to anticipate the future, though, is just a small part of their appeal. In fact, what struck a particular cord with us at Cloudflare was their obvious technical know-how. They’re geeks at heart. And it showed. Carl got excited about the same exact stuff we got excited about, which was terrific.
That’s why we considered their counsel so valuable. Unlike some of the other investors we were interviewing at the time, Pelion’s advice rang particularly true. And their honesty was refreshing.
“Carl got excited about the same exact stuff we got excited about, which was terrific.”
Matthew Prince, CEO , Cloudflare.
Again, the investment landscape back in 2009 wasn’t particularly receptive to early seed stage investments. Even those with really good ideas. But Pelion, consistent with their promise “to not lead anyone along,” kept in touch. And eventually, along with another vetted investment group, they came to recognize us as a good investment. Not just for 2009, but for the future as well. Which is how Cloudflare came to be.
At every stage of our partnership, we found that the folks at Pelion were extremely well-regarded by other venture capitalists. And by fellow entrepreneurs. They were also mercifully quick with their decision-making. But here’s the part we loved best: Technology came first, financial folks second. Which, as a point of view, remains downright unique.
When all is said and done, though, it’s pretty clear that their overriding strategy is to be easy to work with. They literally find their way into deals by being something totally unconventional: Good guys who do what they say they will.
Which kind of explains their success. Who, other than Pelion, would ever think of something so counterintuitive…? But hey, don’t take our word for it. Ask around. Ask them directly, and while you’re at it, ask them about the deals that they passed on (those stories coming soon).
Bigfoot. The Easter Bunny. A Decisive Venture Capitalist.
Turns Out One Of These Actually Exists.
Mark Lewis is the CEO and Co-founder of Formation Data Systems (FDS), which is the first converged data platform for enterprise computing. (Actually, it’s the only enterprise data storage solution designed from the ground-up for next-generation applications and cloud data centers.) And like so many entrepreneurs before him, Mark knows all too well that finding a worthy venture capitalist is anything but easy. Here’s why Pelion made the cut:
MARK LEWIS: Pelion was referred to us by one of our incumbent investors. And, thanks to Managing Director Carl Ledbetter, they immediately set themselves apart.
While most venture capitalist firms insist upon meeting with their technical consultants to seek validation of a given technology, Carl did nothing of the kind. Instead, he told me he understood what we were trying to do. And that he wanted to, quote, “Do it.” Even more surprising – when we pressed him on whether or not we had to present our idea to anyone else – he said the unthinkable: “No. I’m the guy.” This happened at the first meeting. Which definitely got my attention.
“Carl said to us, “I got it, I get it, I understand and, I want to do it,” at which we replied okay, do you have any people that we need to brief, expecting rounds of discussions with their technical consultants. he said the unthinkable: “No. I’m the guy.” This happened at the first meeting.”
Mark Lewis, CEO, Formation Data.
The big difference, of course, is that Carl is an operations guy. He’s a PhD. He knows technology and he’s had numerous successes. With big companies as well as start-ups. In other words, he’s not only been in the trenches, he’s set up housekeeping there. On numerous occasions. Ditto for the technical team. Not only did they take the time to understand our idea, they recognized it for the breakthrough it’s proven to be.
While other VC firms wanted to talk about what was trending and what was cool, Pelion was totally comfortable with our desire to go off the reservation. We were talking about doing something completely different and radical. Something that wasn’t on anyone’s radar. Or in Business Week. Which meant we needed a firm willing to put their ass on the line right next to ours. And despite any of the inherent risks, bet on us. That was Pelion.
For us, it’s all about getting the religion – believing in our mission and our cause. Everything else is secondary. Pelion understood that. It’s the difference between having an investor with a corporate development or finance background. And having one who also has a background in operations.
During our discovery phase, it became readily apparent that most VCs – at least the ones we met with (from big and small firms alike) – just weren’t comfortable making decisions. We’d ask, “Is there a person we can talk to who can make a decision? Or is there one huge committee we can appeal to?” Which would, unfortunately, lead to numerous – and highly technical – follow-up meetings.
At Pelion, however, we found individuals who could make decisions, who understood our products and who got it the first time. Not only were they engaging, they gave us relevant, timely feedback. They liked what they heard and they wanted to move forward. We didn’t have to go through the motions of two or three follow-up meetings to bring everyone up to speed. It was done after one briefing. Which, needless to say, is a very good thing. And increasingly hard to find.
They’re Not Afraid To Tell Us We Suck.
And We Find That Absolutely Irresistible.
Tom Lounibos is the CEO and Co-founder of SOASTA, a company that offers what was once unthinkable: Browser-based website testing that simulates thousands of visitors at once. And you know what Tom’s first words to Pelion’s managing director Blake Modersitzki were? “You’re late.” He wasn’t looking at his watch, either. They already had two term sheets in hand from some pretty well-known Silicon Valley firms, and Pelion, a late-to-the-game unknown, had a lot of catching up to do. Here, in Tom’s own words, is how Pelion got it done:
TOM LOUNIBOS: In order to level the playing field, Pelion had to pull off some pretty big miracles: Turn a term sheet in less than 10 days and get a nod-in from existing investors who were already in play. Both pretty lofty goals, to say the least.
But, as it turned out, Pelion was full of surprises. Starting with their ability to instantly evaluate our situation. Not only was their assessment stunningly quick. It was stunningly accurate. Almost immediately, they understood – and could intelligently articulate – the kinds of problems Soasta was solving in web and mobile testing environments. Normally, it’s a struggle to get investors to learn what you do. But Pelion got it. Which, I guess, shouldn’t be surprising when you consider the backstory.
Despite never having met, Blake said that he had been hearing my pitch for two years. From none other than Carl. Who, evidently, had been preaching the need for a company that uses cloud computing to test web and mobile applications. According to him, testing was the perfect application for using multiple servers to simulate traffic hitting a website or mobile platform. He said it would be a perfect company. Which, of course, turned out to be downright prescient.
Other firms that had put together term sheets didn’t quite “get” us the same way that Pelion did. And that became clear in about an hour. But when your VC understands your problems with an almost instant awareness, the way Carl and Blake do at Pelion, it’s a game changer. You’re no longer tasked with educating them. They’re already there – if not way ahead of you. And that’s the crux.
“When your VC understands your problems with an almost instant awareness, the way Carl and Blake do at Pelion, it’s a game changer.”
Tom Lounibos, CEO, Soasta.
Another Pelion strong suit is communication. I want someone who’s as comfortable communicating bad news as they are communicating good news. In other words: If it sucks, I want to know what we do to fix it. And I know Pelion will tell me.
All companies experience bumps in the road. Some more frequently than others. But Pelion has the ability to remain focused on the horizon. And they know how to get you where you’re going in the smoothest, most effective way possible. When’s the last time you felt comfortable describing a VC the same way…?