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Conservative, Lots of Value Add, but a Mixed Experience

Fund: Norwest Venture Partners

Posted by scottdunlap on 2011-04-23

PUBLIC:

Norwest led our Series C at NearbyNow, with Josh Goldman sitting on our board. We went through a bit of a roller-coaster through the economic downturn, and ended up being acquired in a deal that was a good fit.

Some things worth sharing about my experience:

1) Their due diligence was more complete than any VC I have ever worked with. It took a while, but when it was completed, it felt like the whole partnership knew how our business would run. I was able to call other partners and ask their advice without having to explain what we do and where we were. This is certainly not the case with other VC's.

2) Every month, we would get a call from Norwest saying they had invited the top brass from some big company (Google, eBay, Nokia, etc.) to meet their top portfolio companies. This was extremely helpful in getting on the radar of some big co's.

3) Josh Goldman was extraordinary in the first six months, getting right down to offering his feedback on Web and UI design. When the business direction was clear, he was very helpful.

4) When the shit hit the fan in the economic collapse, we had to cut back and pivot the company. It was difficult to find a new direction that leveraged what we had built serving the retail sector. Tim Chang and others were helpful in brainstorming. As one would expect, there were some difficult board meetings (and not some of my finest moments for sure). The relationship with Josh and Norwest changed significantly, and messages from the partners became inconsistent. One could argue that this is to be expected, but man, it was tough. Not all bad, but tough.

5) We ended up selling the company, much in thanks to Josh's timely suggestion, and I was happy with the fit with the acquiring firm. We didn't sell to the highest bidder since Norwest blocked that deal, but I think it ended up well. We've had some trouble with Norwest partners giving blanket negative references about the experience, which has unfortunately held back the careers of a few loyal executives who stuck by in hard times. I guess it is what it is.

If you have a late stage investment with a secure revenue base that fits their sweet spot, you should definitely speak with them. Despite a tough outcome for us, I was extremely impressed with how they acted as a "partnership", staying in the same mindset about each investment, bringing in big co's to speak with the portfolio, willing to commit to a longer lifecycle to maximize an outcome, and in general always bringing opportunities to the table.

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