Funding Working Capital for Small Businesses: Kabbage CEO Marc Gorlin (Part 2)

Sramana: When you had those initial conversations, what was the consensus on identifying a company-building opportunity?

Marc Gorlin: The concept was to take a worldwide known brand, PGP, and turn it into a product that corporations could buy to protect their digitally sensitive information. It was not something that you would normally see done because we were creating a company around a brand that already existed. This was in 1996.

Sramana: What aspect of enterprise security did you want to leverage to commercialize PGP?

Marc Gorlin: Email security. Up to that point, the only people who cared about security were those who cared about security in the offline world as well. Companies like Boeing and Intel had plane and chip designs that they kept compartmentalized. We wanted to democratize this for everyone in corporations and not make it so hard to integrate into all the major email programs. The concept was to have a single click to secure your email. That made the encryption process just as simple as sending an email.

Sramana: Did you also name the company PGP?

Marc Gorlin: The brand was well known, PGP, so we maintained that as the brand.

Sramana: Did you start PGP in Atlanta or Colorado?

Marc Gorlin: We actually moved Phil out to Silicon Valley, and started it in Redwood City. It was us and a few other people in the industry who created the founding group. We brought in a CEO out of Novell to start building the company.

Sramana: It sounds like there was some money readily available in the pool. Was that from your father? Is he a VC or angel investor?

Marc Gorlin: He is not a VC, but he has done many biotech companies which required financing, so he gave me the numbers of some of the people with whom he worked. I called on those people and explained the deal that we wanted to put together. We raised an initial round of $7 million to launch PGP.

Sramana: What were some of the highlights of PGP, and what came next?

Marc Gorlin: I worked within business development and was on the board at PGP. We sold the company to Network Associates in December of 1997. By that time I had started a recruiting firm called Lanta Group, which was primarily run by my partner.

After that I founded a company called VerticalOne. We built up VerticalOne and sold it to a company in Atlanta called S1 for a pretty good sum of money. They owned it and divested that asset to Yodlee. The patents that we created at VerticalOne are the patents that Yodlee has today. I was a co-founder and executive VP at VerticalOne. We raised the initial money and took it zero to 140 people in just one year before selling to S1 Corporation for more than $150 million in 1999.

This segment is part 2 in the series : Funding Working Capital for Small Businesses: Kabbage CEO Marc Gorlin
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