Even as the venture capital space tightens, there’s money to be had for savvy entrepreneurs who can sell investors on efficiency.
Greg Dolan, CEO of Durham-based Keen Decisions Systems, is a testament to that, as his company closed a $7 million equity round July 12, according to securities filings. But the round, led by Tampa-based Ballast Point Ventures, didn’t come easily.
Dolan said the fundraising process was long – a year and a half, as the firm looked for the right partner.
“During that time the market started to correct,” he said. “We started to see valuations come down, a lot more scrutiny around the business.”
Keen describes itself as a company that helps Fortune 500 firms make “data-driven decisions that build winning brands.” It was founded in 2010 and shifted to a Software-as-a-Service model in 2015.
Dolan, whose firm closed a nearly $6.7 million round in 2020, said venture capitalists seemed more discerning than ever this time around.
“They are making sure the investments that they’re making are going to mitigate some of the risk they’re seeing in the marketplace,” he said.
Dolan has advice for others trying to raise capital amid the crunch.
“Focus on your key metrics and be capital efficient,” he said, noting venture capitalists told Keen they wanted to see growth, but they also wanted to see that their money would be “spent in a way that is going to provide a payback.”
Keen, with technology that helps brands such as Campbell Soup Company (NYSE: CPB) and Nathan’s Famous Inc. (Nasdaq: NATH) make marketing decisions, has some big advantages in a downturn – primarily pricing.
Unlike some of its competitors, it hasn’t had to raise its prices amid economic uncertainty.
“One of the things that we’re able to do because of the efficiency of our software is be a lot more aggressive in terms of price,” Dolan said. “It’s allowed us to not only drive more business for the bigger companies, but also get down market as well.”
The plan is to ride that demand and invest in growth – albeit conservatively. While Keen may not be as “aggressive” as it was in the past, it’s still planning on hiring, particularly in marketing and sales positions.
Right now the team is at 50, with plans to grow – but probably by just a few roles for now amid economic uncertainty. Keen has a history of growth, evidenced by the fact that it made last year’s Inc. 5000 rankings, which recognize the fastest-growing private companies in the nation.
The firm ranked 1,601 on the list, with a reported growth rate of 291 percent.
