Welcome back to our deep-dive series on building fundamentally strong companies. In our last session, we talked with Nick Mehta of Gainsight about when a growth company needs to slow down to create both time and profits to fund the next s-curve of growth. In this session, we’re going to talk about the opposite—when to forward-invest in growth, even in a recession. When you’re on the steep part of the s-curve and customers are still buying, how do you accelerate through the uncertainty of 2022 and beyond?
Our guest is the perfect person to talk through that exact scenario. Scott Dorsey is the co-founder of ExactTarget and current co-founder and managing partner at High Alpha. Scott grew ExactTarget to ~$50M ARR and profitability, with less than $6M in primary capital. Then, in 2009, in the heart of the global financial crisis, ExactTarget engaged in an aggressive investment and scaling effort. They took margins negative and raised $200M+ in funding to reach $400M in ARR and category leadership.
ExactTarget was my first lead investment at my previous firm, and I was fortunate to sit on Scott’s board as we accelerated aggressively through the 2009 global financial crisis. We ultimately took ExactTarget public—the biggest SaaS IPO then—and later sold it to Salesforce.com in the largest acquisition they had made up to that point. Over that period, we scaled to close to half a billion in ARR, and we’ve heard that ExactTarget is still growing strong, reaching $2B+ ARR inside of Salesforce.
As I look back, I'm not sure if I realized at the time quite how remarkable what we did with ExactTarget was—both the decision to forward-invest in growth while the sky was falling and the precise execution of the team. Two and a half recessions later, the story stands out to me even more.
We hope you enjoy this conversation with Scott as much as I did.
About Tidemark
Tidemark is a venture capital firm, foundation, and community built to serve category-leading technology companies as they scale. Tidemark was founded in 2021 by David Yuan, who has been investing, advising, and building technology companies for over 20 years. Learn more at www.tidemarkcap.com.