Remembering a Scrappy Little Startup Called Ebates

Posted by Paul Koontz

Foundation Capital - Paul KoontzThis week’s announcement of the acquisition of Ebates by Rakuten brings back memories for some of us at Foundation Capital. Some old memories. They start with our meeting two young former district attorneys introduced to us by a mutual friend, John Nirenstien. It was 1997 and these two guys, Alessandro Isolani and Paul Wasserman, wanted to start an Internet company. Everybody wanted to start an Internet company back then.

They had an idea and lots of piss and vinegar…but they weren’t technologists. They’d never worked in a company – their entire careers had been spent as lawyers in the San Mateo County prosecutor’s office. There was no site. No traffic. There wasn’t much to work with.

But, they were boiling with energy and they were scrappy. They would show up at our offices in an old squad car with holes in the body where the police lights had been mounted and large patches of paint missing where the decals had been stripped off. They’d bought it at an auction for less than $1,000.  As far as we knew, it was the only car between the two of them. It was a good sign.

With a very small amount of incubation capital from us, they got a site up. A modest amount of traffic developed. (The Internet was a quieter place back then and a site offering cash back for online purchases was novel.) They met a reporter for USA Today at a conference and the next day Ebates was mentioned in an article about e-commerce. More traffic, and Series A capital from us.

Soon after that, they came bursting into our offices with an urgent request. They’d pitched a local TV station a story on online security and were about to be interviewed as experts for that night’s news broadcast. They’d given the TV crew our address — they didn’t have an office yet — and needed us to quickly set something up. My partner, Mike Schuh, was traveling that day so all his photos and other personal office decor were quickly tucked away and the team of Paul and Sandro sat at Mike’s desk and shared their wisdom about online security, mentioning a small site called Ebates in nearly every sentence. Like I said, they were scrappy.

They did one thing that ensured the survival of the company. After raising a series B from August Capital, Canaan Partners and us, they got to cash flow breakeven and didn’t let go of a very important idea: as long as they weren’t burning cash, they were in control of their own destiny.  When the great Internet bubble burst in 2000, that was the difference between living and dying. For those who weren’t born back then, it was nuclear winter. The lights went out on everything Internet — unless you weren’t losing money and had cash plus the fortitude to weather the storm.

I’d have to dig through the archives, but I don’t think the company had a year in which it lost money since 2001 or 2002.  It raised one more round of capital, led by August in 2012, to fund some growth initiatives, even as it was generating roughly $15M annually.

Paul and Alesandro did one other thing that was critical. They supported the hiring of Kevin Johnson as the company’s CEO in 2008. Kevin and the team he built deserve credit for much of what Ebates has become. They’ve worked tirelessly and have done a brilliant job scaling the company that Sandro and Paul started. We all owe him huge thanks. That company, sold this week for $1B, wouldn’t have existed without the scratching and clawing Sandro and Paul did early on. They deserve to be among the exclusive club of entrepreneurs who’ve started a company that generated $1B of real value. Scrappiness is a good thing…it might even be the most important thing.


Announcing FCT3

Posted by Paul Holland

PrintIt was 30 years ago this week that I arrived in Silicon Valley to start my first job out of school. Over those years, I’ve been fortunate enough to have helped build two exciting startup companies with two great CEOs, Reed Hastings and Mark Gainey. As a VC, I’ve advised companies that started out with a simple idea, and are household names today. For example, I spent five years helping Dan Rosenweig and his team at Chegg build a company oriented to helping young people save money to pay for their education.

I meet brilliant minds at work, there’s no doubt. But the minds that truly amaze me are the ones I meet at home everyday. I have three teenage daughters, and they have a way of looking at the world that often leaves me astonished.

I expect to have a similar reaction when I listen to the teens who will be visiting our office in Menlo Park to talk about tech at our FCT3 event on October 2nd. We have invited students from several Silicon Valley high schools to talk about how they relate to tech — and its role in their future. We care about what they think — and we want to hear what they have to say.

It isn’t a contest. It isn’t the Tech Bee. It’s just a platform to share ideas, viewpoints and to talk about trends, and to imagine the future –together.

This isn’t new for us at Foundation Capital. We believe in mentoring young people. I founded the Young Entrepreneurs Program in 2010 as a way to bring young graduate students participate in the process of identifying exciting new startups. Now, we’re going a step farther. And I’m very excited about it.

Here’s the formal press release:


October event to feature students talking technology with industry leaders from Netflix and Instagram

Menlo Park, CA – September 3, 2014 – On October 2, 2014, Foundation Capital, a leading Venture Capital firm in Menlo Park, will host its second Teen Tech Talk, or FCT3. The event gathers students from Silicon Valley high schools together to talk about how they view and use technology, what trends they see fading and rising, and their own vision for the future of different industries.

At the event, students will hear from leaders at companies they admire such as Netflix and Instagram, and will have the opportunity to “pitch” their ideas to a panel of media and investors about their views on the future of technology and the innovation they hope to drive. Students can choose to discuss any trend that matters to them, whether it’s communication, entertainment, healthcare, or technology.

Foundation Capital has been investing in young startups and young leaders for more than 18 years. Its Young Entrepreneurs Program helps build relationships between graduate students and top schools and startups in order to pave the way for brilliant careers. Schools represented in the 2014 Young Entrepreneurs Program include Stanford, Harvard, MIT, University of Pennsylvania, Carnegie Mellon, Columbia, University of Chicago, Georgetown, Georgia Tech, and Berkeley.

“Foundation Capital is deeply committed and passionate about supporting education and the next generation of innovators. I founded the Young Entrepreneurs Program to bring young grad students into the venture capital process and help them to help us source new ideas.” said Paul Holland, General Partner at Foundation Capital. “As the father of teenagers, I was inspired to create an event with the primary goal of listening to what young people have to say.”


Date: Thursday Oct 2, 2014

Time: 4 p.m. – 7 p.m.

Location: Foundation Capital, 250 Middlefield Road, Menlo Park

For more information:

About Foundation Capital

Foundation Capital is dedicated to the proposition that one entrepreneur’s idea, with the right support, can become a business that changes the world. Foundation Capital has helped companies like Atheros create the mobile Internet, EnerNOC invent the energy demand response market, and Netflix revolutionize media distribution and consumption, among many others. Foundation Capital is currently invested in more than 80 high-growth ventures in the areas of consumer, information technology, software, semiconductors, and clean technology including BoardVantage, Chegg, Coverity, Lending Club, Simply Hired, Sunrun, and Venafi. Foundation Capital’s twenty-two IPOs include Control4, Envestnet, Financial Engines, Netflix, NetZero, MobileIron, TubeMogul, Responsys and Silver Spring Networks. For more information, visit

Charles Moldow on the Distruption in the Financial Services Industry

Posted by Foundation Capital

fc_news_charlesCharles Moldow, a general partner at Foundation Capital, gave a speech analyzing the financial services industry at Foundation Capital: Conversations, FinTech, in New York. He explains what’s driving the industry, and where the disruption is coming from. Watch his entire speech, or check out the highlights in the short clips, below.

Backing the Alchemist

Posted by Ashu Garg


I am excited to share that Foundation Capital has decided to back the fantastic work being done over at the Alchemist Accelerator. We share the same values around nurturing promising startups in their early stages, and look forward to being active participants in their program. Programs like the one offered at the Alchemist play a big part in encouraging innovation in the valley, and we’re happy to support them.

Below find the full press release:


Alchemist, an Accelerator Dedicated to Enterprise Startups, Welcomes Foundation Capital to its List of Investors 

San Francisco, Calif., August 25, 2014 – Foundation Capital has joined Cisco, Draper Fisher Jurvetson, Khosla Ventures,, SAP Ventures, and US Venture Partners, as a backer of the Alchemist Accelerator, it was announced today. The amount of the investment is not being disclosed.

 Foundation Capital is an investment firm that builds great companies. It invests in startups in their early stages with a very hands-on approach, much like Alchemist does. We like that the program is structured around customer development, sales, and fundraising. These pillars form a good foundation for building successful businesses, and that’s what ultimately makes a company more appealing when we look to invest,says Ashu Garg,  General Partner at Foundation Capital. Alchemist not only finds exciting ideas, but also great teams to go along with them. 

The Alchemist Accelerator is a six-month program, accepting 13 companies every four months. On average, the companies that are accepted receive $28,000 in seed funding. As part of the program, Alchemist founders are mentored by a large network of high caliber experts and coaches. Gary Swart, former CEO of oDesk, and Mike Olsen, CEO of Cloudera were recently added to this group. 

More than half of Alchemist companies go on to raise institutional funds from some of the top venture capital firms in the valley. The list now includes Foundation Capital, in addition to Andreessen Horowitz, Draper Fisher Jurvetson, Founders Fund, Greylock Ventures, Khosla Ventures, Redpoint Ventures, Storm Ventures, and True Ventures.  

Foundation Capital is more than just a venture capital firm,says Ravi Belani, Managing Director of Alchemist. All of Foundations partners have been entrepreneurs, which brings a refreshing dose of perspective to the table when they work with our founders. We are happy to have them on our side.

On September 25, 2014, Alchemist will host their Class Seven Demo Day at Citrix in Santa Clara, where over 200 customers, partners, and investors will join to see what new ideas are coming out of the accelerator.

Learn More: Anyone interested in getting involved as a mentor, investor or customer or members of the press, should fill out this form:

For more information on the accelerator, please visit the website:

Congratulations, PrivateCore!

Posted by Steve Vassallo


A day after PrivateCore announced its acquisition by Facebook it has been nothing short of awesome to see the reaction to this news. Having watched Oded Horovitz and Steve Weis build PrivateCore from concept to company — starting in our office only 2.5 years ago — I would have expected nothing less for them and the team. Oded and Steve are brilliant technologists and consummate entrepreneurs, and I’m thrilled that their vision for securing servers will be realized at massive scale inside of Facebook.

Congratulations and Thank You to the PrivateCore team!

PrivateCore announcement:

We have some big news: PrivateCore will be joining Facebook. What makes this development so exciting for us is that Facebook and PrivateCore have an aligned mission. Facebook has done more than any company to connect the world, and we want to use our secure server technology to help make the world’s connections more secure. 

Since the beginning, we have worked tirelessly on our technology to protect servers from malware threats, unauthorized physical access, and malicious hardware devices. Working together with Facebook, there is a huge opportunity to pursue our joint vision at scale with incredible impact. Over time, Facebook plans to deploy our technology into the Facebook stack to help protect the people who use Facebook. We know we will learn and grow as we continue developing our technology and making it stronger.

The PrivateCore team wouldn’t be where we are without our investors who believed in us, and we want to thank everyone who has been a part of this journey with us. The work is just beginning and we can’t wait to get started.

Congratulations, TubeMogul!

Posted by Ashu Garg

TubeMogul IPOEvery now and then, there comes a moment when you feel really good about a risk you took, about something you believed in and took a chance on. That’s how I’m feeling this morning about backing TubeMogul, which went public on the NASDAQ earlier today.

I remember being fascinated by the company when a close friend told me about it. That was back in early 2009 when we were in the process of investing in FreeWheel. I vividly remember the moment – my wife was due to deliver a baby any day, and we were moving houses the next day. I was supposed to be packing stuff for the move, and yet I was on the phone with my friend, Ajay Chopra, exchanging notes on how the video ecosystem would evolve, and the role that both companies could play in it. TubeMogul and FreeWheel seemed to be very complementary, and I remember asking Ajay to promise me that he would introduce me to Brett Wilson at TubeMogul well in advance of any future financing.

A year later, I got a chance to meet Brett, John, Jason, Adam, and the rest of the team. It was love at first sight! Brett and John had incubated TubeMogul at UC Berkeley, and they exemplified — and still do — everything I love about Berkeley: the exuberance, the determination, and the earnestness. Brett had pulled together a really smart and scrappy team, had launched their publisher analytics product, and had a handful of passionate customers. Most importantly, he had a grand vision to transform video advertising.

There were a few minor questions – they had yet to build the advertising platform, the team was learning about the advertising market as they went along; and the analytics product, which was most of the business at the time, had no future.

Given investments in Netflix, Freewheel and Conviva, we had a ringside seat in the online video ecosystem. We were seeing the explosive growth of Netflix’s streaming business at close quarters, and I was increasingly convinced that linear TV would eventually die, and all premium video content would be viewed on-demand over the internet. If I was right, TubeMogul had the opportunity to dominate in what could be a $ 200 B+ market over time. Very quickly, it was clear that Brett and I shared a common vision around the opportunity to transform advertising by moving brand-centric ad dollars online, and enabling media buyers to buy brand advertising through automated exchanges instead of over cocktails. I still remember sitting in Vogue (one of our Foundation Capital conference rooms) and saying, “If this works, it could be the Google of Brand Advertising!”

And so began my journey with TubeMogul. At the time, the whole company could fit into a conference room, and all they had was their Berkeley spirit, boundless enthusiasm and some naiveté. Right from the beginning, regardless of what they did or didn’t know about the ad industry, they were clear they wanted to build a self-service platform and not become just another ad network. And four years later, despite many obstacles, they have succeeded. Brett has built an exceptional culture focused on “follow through” and a high “do-to-say ratio”. I remember that when they once had a serious bug in the software, Brett rented out a handful of hotel rooms and the entire company worked around the clock for two days until the issue was resolved. Today, the company is 20 times larger, but I have confidence that they would do the same thing if such an issue arose again.

The IPO process has been a roller coaster ride, and it had its scary moments. I am proud of how everyone stepped up to the challenge, and put the company ahead of everything else. I am thrilled that we are a public company, but this is just another small step towards transforming an industry.

My conviction that linear TV will die and that all brand advertising will be bought and sold via exchanges has only gotten stronger, given the events of the last four years. It will take time, but it will happen. My belief in TubeMogul has been — and continues to be – unwavering. We are putting our money where our mouth is, and buying more stock in the IPO. This company is going to revolutionize video advertising, and we are still in the early innings of that game.

Tubemogulers – Congratulations! Let’s celebrate this today and get back to the hard work of building a great company on Monday.

Lending Club: A Billion-Dollar Quarter

Posted by Charles Moldow


Lending Club hit an important benchmark today: in one quarter, they have processed a billion dollars in loans. To put this into perspective, it took seven years to hit their first $4 billion.

But what does it mean to process $5 billion in loans? It’s a good question, and one whose answer reflects the variety of uses that people have found for Lending Club. Nearly 6,500 small businesses looked to Lending Club to help them expand, buy equipment, renovate offices or storefronts, or purchase inventory. Over 2,300 couples found financial options for their weddings; 3,700 got help with medical expenses; and almost 32,000 found help for big ticket purchases. Perhaps tellingly, over 288,000 loans were facilitated to help refinance credit cards or a loan – and they are paying an estimated average of 29% lower than they were previously paying.

There is still a tremendous opportunity for growth, which is of course an exciting prospect for us here at Foundation Capital. The team at Lending Club has created a great infographic that shows these opportunities as well as takes a deeper look at the impact that Lending Club has had on how people look at marketplace lending. You can view that at their site here.

For more info on marketplace lending, check out “A Trillion Dollar Market By the People, For the People.”

ForgeRock: Reshaping a Market

Posted by Warren Weiss


When I first met the ForgeRock team last year, I thought it was an answer to the prayers of many CIOs I know. It was in the midst of its Series B at the time. I invested in it.

A year later, I’m even more excited about the opportunities and potential at ForgeRock. I just participated in its Series C round of funding. ForgeRock raised $30 million this time around, bringing its total funding to $52 million. CEO Mike Ellis plans to use this money to develop new products and to expand ForgeRock’s international reach.

This nimble four-year-old company provides identity relationship management solutions tailored for today’s digital market.  It has built out Sun Microsystem’s open source identity projects to work with any device or thing, as a multi tenant platform in the cloud or on site. ForgeRock has moved beyond traditional, employee-centric identity management software, and that’s a good thing. Given that we have more people using more devices and things to access more content than ever before, we need to ensure that the age-old concept of “who has access to what” keeps up. Ellis and his team are developing dynamic identity solutions designed for businesses that want to roll-out new customer-centric solutions that scale to support hundreds of millions of users and can move at the pace and speed of the Internet.

They already have customers in 30 countries. It’s an impressive list with companies like Salesforce, Toyota, Thomson Reuters, GEICO and BNP Paribas Investment Partners, and government agencies in Norway, Canada and the Vatican, among many others. Over a period of four years, they’ve built up a base of end users that’s in the hundreds of millions. And that number is only going to grow.

I like ForgeRock’s platform and believe this company can re-shape the identity relationship management market. Its leaders have the experience and knowledge to do it. They come from innovative backgrounds at SAP, Oracle, Apple, and Sun. They have a world class team that has proven they can build a global high growth business for the Cloud or On Premise market.

I’m so pleased to support ForgeRock. Congratulations!

MobileIron is Poised to Lead the Way to Mobile First

Posted by Paul Holland


If there’s one thing better than being in the right place at the right time, it’s having great relationships with entrepreneurs who always seem to be in the right market at the right time.

That has defined our relationship with MobileIron, which has just announced its IPO.

Four years ago, I got a call from John Donnelly – a friend and former colleague who has worked closely with me on several startups. John had just joined MobileIron as VP of sales, and he was getting ready to take their mobile IT platform to market in a serious way. “You’ve got to find a way to get involved in this company,” he said.

I quickly got in touch with CEO Bob Tinker and the founding team. Within a few weeks, Foundation had successfully pitched an offer to lead MobileIron’s Series C round.

In just a few years, MobileIron has grown faster than any other enterprise company I’ve worked with. Today, they have more than 6,000 enterprise accounts – including more than 350 of the global 2,000.

There are many factors behind this growth.  First and foremost is MobileIron’s world-class talent – from the founding team to the executive team, to the outstanding sales team John leads today.  I particularly enjoyed working with the board, which included representatives from Sequoia Capital, NorWest Venture Partners, Storm Ventures, and Institutional Venture Partners.

In addition, MobileIron has been perfectly aligned with the right market from the very beginning. The company first launched their mobile security and IT management platform at the same time as the iPhone and Android devices were beginning break BlackBerry’s virtual monopoly on enterprise users. As users increasingly brought their own devices to work, MobileIron was perfectly positioned to take advantage.

At Foundation Capital, we couldn’t be more proud of MobileIron’s impressive growth.

For my part, I’ve been happy to be a part of their journey and to help in ways I could.  In the early days of our relationship, we made sales calls on behalf of John and his team, helped recruit key executives and partners, and helped scout three important acquisitions – including the acquisition of another Foundation Capital company.

In the process, MobileIron has grown to become one of the strongest companies in the space.

As more and more companies embrace mobility as a primary computing platform and transform the way they do business, MobileIron is becoming more and more indispensable to them – and to the future of mobile work.

At Foundation Capital, we pride ourselves on helping build great, market-shifting companies. MobileIron has already proved it is both of those things, and that their IPO begins an even more exciting chapter in their remarkable story.

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