Doug Knopper wasn’t excited about looking for venture capital this year. San Mateo, Calif.-based FreeWheel, the internet advertising technology company Knopper co-founded in 2007, had raised only enough money in a previous venture fundraising round to make it through 2009. And with VC investments looking sluggish, he wasn’t feeling optimistic about his prospects. Rather than risk running low on capital, Knopper and FreeWheel’s co-founders Jon Heller and Diane Yu decided to start fundraising again in late 2008.
As it turned out, the process went fairly quickly. After meeting with nearly 30 different VC firms, the company completed a $12 million Series C funding round in March. The major funder was new investor Foundation Capital in Menlo Park, Calif., with participation from previous investor Battery Ventures. In addition to providing funding, Foundation will also offer hands-on expertise, as general partner Ashmeet Sidana joined FreeWheel’s board of directors.
The company initially connected with Foundation when FreeWheel’s CFO, Bud Austin, wrote to a Foundation general partner he knew, letting him know FreeWheel was seeking venture capital. That partner turned out to be on sabbatical, but FreeWheel got a meeting with Sidana instead. “It was probably one of the more advanced conversations I’ve ever had with a VC in the very first meeting,” Knopper says. “He had one of the things we were looking for: a partner who understands our space.”
For his part, Sidana was impressed with FreeWheel’s leadership and its proprietary technology. The company addresses a market need: how to place and track ads targeted for specific audiences within TV shows and other content that’s re-aired online. “We continue to look for great teams and great opportunities with companies that are going after large markets with unique technologies,” Sidana says. “FreeWheel had all those criteria.”
—C.T.
Advice for Chaotic Times
"You need to develop an early warning system to detect turbulence before it hits you. Having one Plan B doesn’t work anymore; you need to plan for many different scenarios. Shorten your strategic planning and execution cycles; you can’t just do it once a year. Then, build new behaviors. Increase communications; you need to keep more fingers on the pulse of what’s happening, because it’s changing more quickly. Don’t cut marketing or training costs, or travel for salespeople. You need them out there, talking to customers. At the first sign of turbulence, increase your cash reserves. Engage in aggressive cost cutting: cancel projects and research, and outsource noncore activities. Now is not the time for companies to have a wait-and-see attitude."
—John Caslione, co-author of Chaotics: The Business of Managing and Marketing in The Age of Turbulence
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