Monday, March 28, 2005
Interview with Dennis Clerke, CEO of Alignent
Dennis Clerke is the CEO of Irvine-based Alignent Software (www.alignent.com), a company that recently raised $6M in funding. I caught up with Dennis to hear more about the company and its funding, and to better understand how companies are using its strategic product planning software.
BK: How long have you been looking for funding, and why did you decide to go out for a Series A?
DC: Alignent was in a fortunate position in that the business model and revenue acceleration were already occurring before the Series A, so this was not a traditional Series A round. Carl Dietz, the co-founder, and I started pursuing Venture Investors in October 2004 when we decided that the business needed funding to accelerate. Horizon Ventures signed a term sheet in December 2004 and Mission Ventures signed a term sheet in February 2005.
BK: Was it a difficult decision to go from a bootstrapped operation to VC funding?
DC: Not at all, the company was at a juncture in its life that the VC funding was the right decision in order to capitalize on the market opportunity. However, I personally like the management mindset that comes about from being bootstrapped - it gives the company a good lesson on the value of positive cash flow.
BK: What's the history of the company--I see you were founded in 1999?
DC: The company began in late 1999 by Carl Dietz and Yusuf Shirazi. They identified a real need in the market for technology roadmapping software and in 2001 introduced our product, Vision Strategist. Since the product came to market, the company has been doubling its new customer acquisition rate among that group each year since 2002 and grown to be a leader in the Enterprise-level strategic product planning and innovation management market.
BK: What are your products, and who are your customers?
DC: Vision Strategist, our flagship product, takes the informal and ad hoc methodologies that exist in companies and gives users the power to automate their strategic product planning process. Vision Strategist was spawned from many of our early customers, like Motorola, Honeywell and Corning. Each of these customers face similar challenges in that they had difficulty trying to assess market opportunity and identify breakthrough future product and service opportunities. For most companies, strategic planning involves getting a lot of smart people into a room once a year and talking about what the future holds for the company. There are a lot of ad hoc PowerPoint presentations and spreadsheets, and executive management is left with a final decision of which products or technologies to fund. Vision Strategist takes all of that information across the enterprise and puts it into a real-time Strategic Planning Repository that allows the real time gathering of product information, market opportunities and the technology capacities from all participants as they change. This gives the executive and development teams the ability to understand and respond to technology roadmaps that achieve the organizations strategic goals. Today, Alignent has a foundation of many customers with leading Global R&D 500 companies, with our completed $6M Series A funding round and a strong pipeline and revenue history, the Company is uniquely positioned to take this market by storm.
BK: How do you go to market with your products, and do you sell directly or do you go through a channel?
DC: Alignent sells our products through a direct sales force in N. America. Outside the US we have reseller partners that bring the solutions to our clients.
BK: How did you get involved with Alignent, and what's your previous experience?
DC: I met Carl Dietz, the co-founder and Chief Strategist for the company in the summer of 2004. We agreed to work together and that raising venture capital and taking advantage of the emerging market was our first priority. I have been through the venture funding process before during my tenure as President and CEO of Cardiff Software, Inc., a leading provider of content capture and process automation software. While at Cardiff, we raised $16M in venture funding while growing revenue from zero to nearly $30M in sales. In March 2004, I led Cardiff Software through a successful acquisition by Verity.
BK: How would you compare your experience so far at Alignent with Cardiff?
DC: I was a co-founder at Cardiff, so I remember the early days of a start up. I really enjoy the excitement and energy of the early days when each employee has so many things to do and a limited amount of resources. At Cardiff, we began the business with a shrink wrap product and sold by way of telesales, then grew our solution to the enterprise. At Alignent we are serving only Fortune 1000 accounts with a valuable enterprise solution. It took Cardiff quite some time to get the sort of accounts that Alignent has. Not many companies in the early stage of growth are able to cite so many Fortune 100 customers as clients.
BK: Who were the investors in this round, and how did you find them?
DC: As I noted earlier, I have been involved in the venture funding process in my past and spoke to many reputable venture firms who expressed interest in Alignent. Our ideal situation was to have two venture investors behind the company, one in Southern California to help locally and one in the Bay Area. We accomplished this objective with Mission Ventures and Horizon Ventures. These two well-established and reputable venture firms gives us a first rate investment team that will enable Alignent to utilize their experience and connections in Southern California and the Bay Area.
BK: Finally, what's Alignent's next big steps, now that you have venture funding?
DC: Our focus is on growth and leadership. We are well positioned to lead the market sector and we have aggressive sales plans, many new products on the horizon that will deliver tangible value to our clients. Our immediate plans are on hiring the best employees that enable us to meet our goals.