Results

Self-funded internet infrastructure design company

Problem

The company has built a strong design team and a profitable business in helping design the internet infrastructure of client companies. However the more sustainable business model is to adopt a recurring-revenue based management services model vs. design services. The company needed to change its orientation in the market, re-align talented engineers toward less glamorous work, and obtain external capital to fund the model shift.

Solution

We were initially engaged to help the company raise its first equity round (the company was profitable and had been self-funded). It very quickly became obvious that, in order to obtain funding, the company needed to address multiple challenges, including changing the business model and revenue streams, marketing, people transitions and cost control. We leveraged the company’s reputation in its design prowess to sell a “smart” management process and redeveloped the marketing messaging. We worked with the management team to address engineering organization and culture shifts, conducted extensive & on-going small-group meetings in order to optimize retention and talent utilization. We implemented cost control measures to reduce burn rate, to provide the company with a longer runway for the fund raising effort.

Results

By leveraging the its existing reputation and client base, the company successfully transitioned 80% of its revenues within 15 months. In a very difficult funding environment, the company raised $5 million from a VC to complete the business transition. The company retained substantially all the engineers it wished.



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