Venture-Backed Companies May Be OK?ö?ç?Âfor Now
Joe Davis, president and CEO of
Coremetrics, a venture-backed, 300-employee company that provides hosted
marketing optimization software to large enterprises, isn't seeing a direct
impact from the Wall Street crisis in his domain. Yet.
"Frankly, the biggest concern I see right now is a personal concern about my own portfolio," Davis said. "We just closed a $60 million round of financing, we just looked at the markets, and didn't see an IPO happening for at least a year or more. To fund-raise at that size is almost like a private IPO. We made sure that we had enough money in the bank to make sure we didn't have to worry about cash for awhile."
Davis said with a laugh, "It seemed smart at the time, it seems incredibly brilliant now. Especially when I look at how difficult it's going to be in the short term for people to raise money from a debt or equity position."
Even with that bankroll, however, Davis said he's thinking differently about how the company spends its money now than he did a month ago.
"We're going to see some distasteful times for a little while," Davis said. "We will continue to be prudent in how we operate our business, no question about that."
About 50 percent of Coremetrics' business is online retail, Davis said. "We have most of the big online retailers as customers, and while some of them are flat in in-store sales, their online sales are growing really rapidly," he said.
One of his biggest customers, Davis said, has seen its in-store sales drop 10 to 15 percent in the last year, while its online sales have improved by 35 percent.
"Our [sales] growth is tied to page views and online sales, so our income is doing okay. Tomorrow [Sept. 30] is the last day of the quarter, and we're on track to book our biggest bookings quarter ever. At this point in time, we feel good-I'd love to say great-but I'm a fairly cautious person," Davis said.