As most people who subscribe to this blog know, blist raised $6.5M from Frazier Technology Ventures and Morgenthaler Ventures earlier this year. While raising money does tend to be picked up and reported on by journalists, it really is a non-event. What matters is what you do with the capital you’ve raised. After all, the existing shareholders wouldn’t accept ownership dilution unless they felt enterprise value would increase over the long term by exchanging some ownership for some working capital.

The most important activity a startup can do with more capital is hire great people who can help accelerate the pace. We’ve maintained a really high hiring bar. I’m thrilled that we’ve kept the bar high but have been able to hire some really key contributors. I mentioned that our first director of user experience joined us a couple of weeks ago. Today marks the start of three back-to-back-to-back weeks of new hires joining us from Amazon. Two of them are mid-career software engineers and the third is a technical program manager who’s also been a software engineer at Amazon. In a couple of weeks we’ll also add our summer first intern - a graduate computer science student from the University of Washington.

As a team, all of us at blist work hard to continue to hire exceptional people. I’m thrilled with the team we’ve assembled and look forward to an incredibly productive summer and remainder of 2008.

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I’m thrilled to announce that blist has completed its first venture financing. Seattle based Frazier Technology Ventures and Morgenthaler Ventures of Menlo Park split the $6.5M round. Joining blist’s board of directors are Ken Gullicksen of Morgenthaler and Scott Darling of Frazier. Both bring significant and relevant operational and industry experience and I’ve been enjoying and benefiting from their involvement already.

Frazier had all along been the Seattle firm I most wanted to back blist. Their operational experience is deep and their reputation among entrepreneurs is excellent. Gary Morgenthaler was co-founder and CEO of Ingres and Illustra and knows the database market and industry well. blist is building the world’s easiest database and the first online social database. The entire Morgenthaler firm passionately supports our vision.

With the investment we’ll be able to accelerate our growth plans, including growing the team. blist is hiring mid-career to senior software engineers, marketers and product managers. If you’re passionate about data and democratizing the organization of data, consider joining us.

The official press release is below.

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blist Secures $6.5 Million to Accelerate the Mass Adoption of Consumer Friendly Online Social Database Service

Seattle, WA, February 20, 2008 – blist, the company that is redefining the database market, today announced a $6.5 million Series A investment from Frazier Technology Ventures and Morgenthaler Ventures. blist will use the additional funding to accelerate the development and marketing of its new online social database service that allies the simplicity of a spreadsheet with the power of a fully featured relational database. In connection with the Series A financing, Scott Darling, general partner at Frazier Technology Ventures, and Ken Gullicksen, partner at Morgenthaler Ventures, have been added to blist’s board of directors.

”There’s a tremendous opportunity to help both consumers and small businesses democratize the function of organizing data online, but it requires going well beyond the capabilities of today’s databases and spreadsheets,” said Scott Darling, general partner at Frazier Technology Ventures. “blist’s meticulous vision and history of building world-class products uniquely positions them to drive the evolution of the database landscape for mainstream users.”

blist: Advancing the Database Market

Designed in the 1980’s and without significant recent innovations, traditional database products from companies like Oracle and IBM are costly and complicated to use. Due to their inherent complexity, these products typically require a database administrator, are not viable for non-technical people, and are too expensive for small organizations. As a result, consumers and small businesses have been forced to organize information in non-database applications like Excel or in complicated databases that require knowledge of SQL.

“blist delivers the biggest advancement for consumers and small businesses in the database market since Microsoft launched Access in the early ‘90s,” said Gary Morgenthaler, partner at Morgenthaler Ventures and former founder and CEO of Ingres Corporation and Illustra Information Technologies. “As the first and only online social database service in the market, blist is poised to address the rising demand for user-friendly databases, and we are excited to be an investor in this company.”

Ken Gullicksen, partner at Morgenthaler Ventures adds, “With a solid track record of business plan execution, blist makes a compelling investment story.”

Unlike traditional databases and spreadsheets, blist provides everyday mainstream users with a strikingly intuitive and flexible way to design simple or sophisticated databases that meet their specific needs without requiring users to have experience with programming or databases. Using blist, mainstream users can structure and catalog all types of information and then create communities around the data they share. blist is an ideal solution for creating anything from party or wedding guest lists, fantasy football statistics, and personal finances to professional information such as sales contacts, project milestones, campaign tracking, status reports, and more.

“It’s extremely satisfying to have two prestigious investment partners believe in blist’s mission of building the world’s easiest database and who see the enormous opportunity to breathe new life and innovation into the database market,” said Kevin Merritt, CEO and founder of blist.

Since launching at DEMO 08 on January 29, 2008, thousands of consumers have requested an invitation to join blist’s private beta at www.blist.com. The company has also received positive accolades from industry experts at Techrunch, Webware/CNET, ZDNet, Mashable, PC World, and more.

About blist

blist is revolutionizing how consumers create, share, and utilize the information that’s important to them with the industry’s first online social database service for consumers and small businesses. blist delivers unprecedented ease of use through a new visual and intuitive user interface that outshines others in the database market. Only blist makes it easy for anyone to create private or collaborative databases for anything ranging from the personal to the professional. For more information, visit www.blist.com.

About Morgenthaler Ventures

Founded in 1968, Morgenthaler is a leading, national venture capital and buyout firm with offices in Menlo Park, CA (headquarters); Boston, MA; Cleveland, OH; Boulder, CO; and Princeton, NJ; and has an investment focus on information technology and life sciences. Morgenthaler’s Internet and software investments, past and present, include such industry-leading companies as NexTag, imeem, Netli, Ingres Corporation, Illustra Information Technologies, TimesTen, and Synopsys. Morgenthaler has a total of $2.5 billion under management. Its most recent fund, capitalized at $450 million, was raised in 2005. The firm (www.morgenthaler.com) has funded approximately 300 companies over its 39-year history.

About Frazier Technology Ventures

Frazier Technology Ventures (FTV) is a Seattle-based, early-stage venture capital firm focused on investments in wireless, internet service, and next generation enterprise companies. The partnership helps entrepreneurs build category defining companies by applying their executive operating backgrounds from companies like C-Cube, EdMark, Intel, LSILogic, Metapath, Microsoft, RealNetworks, and Visio. For more information, visit www.fraziertechnology.com.

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capitalization | 2 Comments »

Between 1996 and 2002 I took a 6-year hiatus from the commercial software industry to try my hand as CIO of an investment bank. Specifically we did mergers and acquisitions - M&A. We represented the owners of mid-sized, privately held companies. Interestingly we didn’t represent ourselves when we were acquired by Smith Barney in 2001, but that’s a different story for a different day.

Anyone can sell their own business. Many do. One of the value adds that we offered our clients was the ability to line up multiple potential buyers in parallel. We justified our handsome commission in part because we could create a competition among buyers for the company we represented. Our goal was to present the seller with three or four letters of intent (LOI) simultaneously. The simplest principle of economics is that supply and demand greatly influences price. So if you have three buyers and one seller, demand exceeds supply, so theoretically the price is higher or the terms are better.

Without a pool of potential buyers, the one buyer negotiates against YOU instead of against the other potential buyers. The point here is that if you are an entrepreneur and you think it’s time to sell your company or time to raise capital (which is really just a partial sale), then you’d do well to heed the cry of the CEO of our M&A unit - “One Buyer is No Buyer!”

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