If You Have Traction, You Can Get Funding in a Recession

Last fall, I worked a little bit to advise a company called UserVoice, which was (and still is) a way for companies to get direct customer input and feedback about their products.

Picture 2Last fall, I worked a little bit to advise a company called UserVoice, which was (and still is) a way for companies to get direct customer input and feedback about their products.


The founders of UserVoice are serious entrepreneurs; they all live
in one home, and work out of a co-working space in Santa Cruz, CA. When
I met the company, they already had thousands of  users, though their
product was free. The founders in the process of monetizing it.

When Marcus Nelson, one of the co-founders, asked me about expansion
capital, I was really skeptical despite my love of the UserVoice
concept. I gave him my customary advice: “don’t waste too much time
getting funding. Startup funding is hard to get.” After all, the time 
was November 2008.

Still, there were all those users…really liking the product. I made a preliminary phone call to Howard Lindzon, one of the bravest, most contrarian investors on the planet. And then I went back to tweeting Marcus every once in a while.

Then I get an email from Marcus, asking to meet last week. I refuse,
because I’m still in Phoenix. But Marcus is releasing big news on
Monday. He sends me some language: “…drawn to the UserVoice vision,
Baseline Ventures recently led a group of angel investors in an
$800,000 funding round. Baseline was joined in the round by Dave
McClure at FF Angel LLC (seed investing vehicle for Founders Fund),
Betaworks, David Shen Ventures, TAG, Vincent Worms, and Howard Lindzon.
As a group, the angels give UserVoice excellent business connections;
expertise in messaging, marketing, product design, and international

And about a new member of the Board of Advisers to the company: “as
the former vice president of communities and conversations at Dell Inc., Bob Pearson bolsters the hands-on, enterprise credibility at UserVoice. At Dell, Pearson led IdeaStorm,
developing an industry-leading approach to the use of social media that
included 25 blogs, forums and wikis in seven languages worldwide with
200 million page views of annual interaction and coordinated the
company’s approach in Twitter, Facebook and other key sites.”

Pearson likes the company even more than I did: “UserVoice is
democratizing the idea generation model, so customers can plug and play
at their convenience, gain feedback from customers, and do so without a
major investment of IT resources. It’s very complementary to the great
work of for IdeaStorm and, in many cases, will extend the reach of existing idea communities worldwide.”


And now for the real good news: It’s spring, and UserVoice has additional hundreds of paying
customers that run the gamut from technology to more traditional
organizations, including Intuit, NASA, Facebook, Xing, Nielson,
Genentech, Blackbaud, University of Wisconsin, Animoto, Seesmic, Stumbleupon and TweetDeck.

Marcus and his housemates are going to use the money to do a white
label product, so any company can communicate with its customers in the
product development cycle, and find out what’s working and not working
before it’s too late.

Whooo..hooo! I’m always so proud to be wrong.


About the author

Francine Hardaway, Ph.D is a serial entrepreneur and seasoned communications strategist. She co-founded Stealthmode Partners, an accelerator and advocate for entrepreneurs in technology and health care, in 1998