Serial Entrepreneur: Manoj Saxena (Part 2)

In our second part of the interview we delve into Exterprise, the first business venture by Manoj.

SM: What was your first company?
MS: It was basically a business collaboration platform, a company called Exterprise. We started that in June of 1998 and we sold it in March of 2001. We grew pretty rapidly from our five employees initially to over 240 people within 18 months. We sold it for $114 million to Commerce One. We had raised about $28 million in cash from very good VC funds like Morgan Stanley, Dell and Austin Ventures.

SM: Did you know these people from before, how did those connections happen?

MS: Well I didn’t know them and I didn’t know anyone in Austin when I left to start Exterprise. When I first started, I was told was that I had to have very good lawyers and accountants. So I went to the best legal forum in Austin, Wilson Sonsini. I talked to their lawyers and basically told them that I could not pay them their $400-$500 an hour bill; but, what I could do is buy them lunch at any place of their choice and get advice over lunch, and eventually, if I get funded they would become my lawyers. I didn’t want to spend the $200k credit card capital on $400 an hour lawyer fees. Through them I got introductions into people within town.

SM: Why did you pick Austin?
MS: I moved down from 3M for a business unit, 3M telecom here in Austin.

SM: So you had already moved to Austin. Austin was already your home base by then.
MS: Out of the eight years I was with 3M I was five years in St Paul. Then they moved me down in 1995 to run a portion of the telecom business.

SM: So Wilson in Austin put you in contact with some of their VC contacts.
MS: Right. Another executive from Synoptics, Shelby Carter, I got to know him and he wanted to get on board. At that time Shelby had a choice of going and running the campaign finance for President Bush, or to come be the non-executive chairman for my company. He was convinced and impressed enough to come in and join us as an investor.

SM: So that was your angel investment, from Shelby. And how much was that?
MS: About $200,000.

SM: And how far did that take you?
MS: If I remember right we raised our first venture funding in February of 1999, so seven months.

SM: And that got you to a protoptype, customers?
MS: Yeah, it got me the first couple of customers and it also got us to another version of the first prototype.

SM: And then you got your first funding? Any other highlights during that period of building Exterprise?
MS: Yeah, some of the things that stand out is the quality of customers we were able to get. It was 1998 when we started and 1999 when this whole thing started picking up. We had apretty impressive customer list: Bell Canada, John Deere, Dell and companies like that. One of the highlights was when Michael Dell stood up in a conference and demonstrated the Exterprise product as a way Dell was going to do e-commerce in the future. I look back at that as something significant. Then again, growing from 5 people to 240 in 18 months, that was quite a rush. Also, opening our offices in the UK and Southeast Asia. I think those were all some pretty good memories.

SM: How did you get into Dell?
MS: Dell again was one of the first things we had done. Michael Dell had his own personal investment arm called MSD Capital. They had looked into funding us and then they asked for some terms. I walked away from them because they wanted some terms that didn’t work. About eight months after turning that money down, Dell Ventures came to us. They had heard of Exterprise from other people as a high growth company and they came into talk to us and they invested in us. Following that we took that opportunity to go and sell our product to Dell.

[Part 7]
[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 2 in the series : Serial Entrepreneur: Manoj Saxena
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