On Tuesday, SendGrid announced that they have raised a $21 million growth round of capital led by Bessemer Venture Partners. Having led the seed round of funding for SendGrid, this was obviously gratifying for us here at Highway 12 Ventures and was another in a long list of validation points that SendGrid is on its way to fulfilling their vision of become the premier email infrastructure company in the world. However, as I perused all the press stories and social media comments over the last couple of days, I realized that lost amid the hoopla was the story of one man’s vision of making email a better tool for all of us.
In early June of 2009 my partner George and I spent a day in the TechStars bunker, meeting with all the founder teams who were embarking on the 12-week gauntlet that would be the 2009 Boulder TechStars class. It was one a hell of a group of entrepreneurs (as evidenced by their continued success – nine of ten of those seed stage companies are still in business 2 1/2 years later and they’ve collectively raised close to $50 million in financing among them). Important companies like Next Big Sound, Graphic.ly, Everlater and more were part of that tremendous class.
When George and I left that evening, I remember sitting over a beer with him and discussing the great teams we met that day. While we were genuinely impressed with so many of the founders (we issued 3 terms sheets to graduates from that class and also invested in Everlater), we were both very moved that day by our meeting with SendGrid, particularly the vision of a young man that I’ve grown very fond of, Isaac Saldana. At that time, there were many pundits (and still are) saying that because of its limitations and inefficiencies, email would be usurped as our primary communications platform. Isaac was resolute that email was not only here to stay, but that it was going to become an even bigger part of our lives. He articulated a vision to us of how to make that a better experience for everyone.
We met with Isaac and his co-founders Tim and Jose a number of times that summer and were impressed with the product advancement and early-customer adoption. We issued a term-sheet to the team shortly after Demo Day in August and led a $750,000 seed round of financing which included a number of prominent angel investors, most notably David Cohen, co-founder and CEO of TechStars.
My memory of the early days at Sendgrid is filled with lots of conversations between Isaac, David and I (the only board members at the time). I look back on it as one of the most gratifying chapters in my career as an investor. The three of us talked often about the myriad challenges that all startups faced. Isaac was a sponge and did a fantastic job of handling difficult situations that he had never encountered before. David and I were candid with Isaac about our feeling that at some point it probably made sense to recruit an experienced CEO so Isaac could focus all of his energy on the product and his vision. Isaac agreed with us but felt strongly that he needed to lead the company until he felt it was right time. David and I would regularly check in with Isaac to see how he was handling the mounting workload and he was honest with his feedback. Looking back, it was perhaps the healthiest ongoing dialogue I’ve been involved in surrounding such a sensitive subject.
Unless you’re involved in very early-stage startups, you don’t know that behind the scenes every day is a flying fire-drill and SendGrid was no exception. One thing was never affected though and that was sales. From the day we invested until today, SendGrid has grown at a double-digit pace, every single month. With massive growth like that comes huge pressure on a small team; customer support, engineering and product advancement, contracts, office space, corporate partner & investor interest and a hundred other things. All of that ultimately falls on the shoulders of the CEO and by late 2010 Isaac acknowledged that he was ready to bring in help. After we turned down an early acquisition offer and brought on a fantastic investment partner in Foundry Group (when Ryan McIntyre joined our board), we ran a very thorough process and were lucky enough to land someone as amazing as Jim Franklin as our CEO.
The rest as they say, is history. SendGrid continues its meteoric rise and Jim & Isaac spend their time leading the company towards Isaac’s vision. They have the best CEO-Founder relationship I’ve ever seen and the company’s fantastic culture is a direct result of that very healthy relationship. After being pursued by the most notable venture firms in the country , we choose Bessemer Venture Partners as our growth capital partner and are excited to have Byron Deeter join our board. While SendGrid is now a large and very important company, this week’s news has spurred me to reflect fondly on its humble beginnings and give credit to Isaac Saldana for leading us all to this point.