Press Releases

← Back to all Press Releases

Apr 9, 2013

With $54 Million from Goldman Sachs; Infusionsoft is on a Roll

Here I sit on a plane.

Hunched over in a seat made more for a man or woman with a banana-shaped back.

How any human can have comfort in one of these ergonomically incorrect seats is a mystery to me.

But nonetheless, it’s time to share a hero’s story with you. So I must put pen to paper and carry on.

You see, I am fresh off 5 days in the Arizona desert. Down to capture ‘the vibe’ (thanks Carmen Sognonvi) of over 2,000 entrepreneurs at an annual event called InfusionCon. Started 8 years ago with 29 entrepreneurs crammed in a small room; it is slated to welcome over 4,000 next year to the Phoenix Convention Center.

Created as a way to engage and teach it’s customers; host company Infusionsoft has Co-Founder and CEO Clate Mask at its helm.

Mask leads an army of nearly 400 ‘Infusionites’ (employees) from a new 90,000 square foot facility with a small football field in the center and Cereal Bar to the side.

And yes — to answer your question — any employee can belly up to the bar and have a bowl of cereal on the house and then work it off in a quick game of football.

With revenue just a tick under $40 million for 2012, Mask and his team have raised $71 million in capital which includes a recent infusion (no pun intended) of $54 million led by investment bank Goldman Sachs.

Serving 13,546 customers and 48,565 users, this six-time Inc. 500/5000 company operates an SaaS business model. It’s main product geared at what Mask refers to as the ‘true’ small business — over $100k in annual revenue with up to 25 employees.

At last count, there are millions of these worldwide.

As a covert spy in the shadow of Mask while he walks the floor of the event (thanks Aly Saxe), I watch as one customer shakes his hand and says “you have something really special going on here and I’m glad to be a part of it”.

And the guy is right — there is something special going on. Thus my quest to uncover it.

But in order to discover the secret sauce of Infusionsoft; we must go back to the beginning. A time of late nights, police raids and the near death of a startup.

Humble Beginnings

This story begins in 2001 with two guys writing software code and one guy trying to sell it. Shacked up in a retail strip mall in Mesa, Arizona; co-founders Scott Martineau, Eric Martineau and Mask did the typical 16 hour days you hear of most successful startups. In fact, legend has it police officers showed up late one night ready to raid their tiny office. The reason? Because of “weird smells, late hours and covered windows” the officers thought the boys were running a meth lab. Of course, turns out they were just running a startup. (Which is almost as crazy.)

More than once Mask had the discussion with his wife Charisse about throwing in the towel. On one particular occasion during the early years it became such a financial struggle that Charisse momentarily caved and told Mask to “use his M.B.A. and law degree to go get a real job”.

“The struggle of the early days will stick in my mind forever” says Mask.

Christmas of 2003 was both a low point and a turning point for Mask. Broke with 4 kids and zero hope, Charisse asked him what they should do for Christmas presents for their children. As a sign of support, she volunteered to make bracelets she could sell to earn the money they needed. With an invasion of guilt in his heart, Mask made the decision to head upstairs to their loft right then to create the first follow up sequence ever with the use of their own software.

After he’d written the copy, he pushed the button and off went his sequence to the 500 leads on the Infusionsoft list. After only a few days a sale came in from nowhere. Week two and even more automatically showed up. Mask ran immediately to his co-founders and said “I think I’ve found magic”.

What magic did Mask uncover? Automated follow up with the use of software gave him more time and brought in more sales. Coincidentally, it’s the exact same outcome small business owners desperately needed.

Now on a roll, another defining moment came when the founding team made the decision to seek capital for their own growth. But the 30 employees at the time asked Mask; “how are we going to keep the small family feeling if we get big?”

So Mask leaned heavily on the work of Jim Collins in his book Good to Great and came under the mentorship of Michael Gerber, author of the ‘E-Myth’ series of books for entrepreneurs. Number one priority from the start? “Get clear on why you’re in business” said Gerber. He hounded Mask on this.

But the dots were not connecting for Mask until one day in the gym it clicked. His trainer asked him to jump up on a BOSU ball and balance on one foot. (Not sure what a BOSU ball is? Basically take an exercise ball and cut it in half — you now have a BOSU ball.)

Mask thought his trainer was crazy — but tried it anyway. Once up on the half-ball, Mask frantically tried to keep his balance as he wobbled back and forth. His trainer simply said these three words; “tighten your core”.

Bingo. He tightened his core and stabilized himself immediately.

At this moment Mask lit up. “Yes — I need to ‘tighten our core’ at Infusionsoft”.

“Everything changed for me in 2007 with the discovery of how important your core and culture is. With the help of Michael (Gerber), and my revelation of standing on that half-ball, I knew exactly what I needed to do with our business.”

Back to the Present

As part of my detective work, some of my peers and I are given the grand tour of Infusionsoft’s new facility. As we pass through the facility; we notice their Mission, Core Values and Purpose are boldly painted on the wall for all to see. No doubt a result of the work with Gerber earlier and now considered a main fixture in setting the culture of who they are as a company.

But while my peers sit through a presentation of the new software release from Infusionsoft, I sneak out of the room in search of random employees to kidnap and interview. There I run into several.

First, Preston Smith, Organic Marketing Manager says this to me; “I had always wanted to work for Infusionsoft because I saw how happy everyone was. It seemed like a big family who really cared about each other.”

Next, Donavon Roberson, who holds the official title of ‘Dream Manager’ and moved over from Zappos to join Infusionsoft last year, tells me; “They (Infusionsoft) really care about customers and employees here and are very family oriented. It’s a great culture and this is why I left Zappos to come here.”

I also speak with Cindy Eagar, Director of Partner Programs, who believes the partners feel like family as well. “We are on a mission together because it takes a village to build this ecosystem. Since 50% of Infusionsoft’s new revenue comes from partner relationships, we have a pretty important role to play and I love my job.”

Later I grab new team members Zach Mangum and Kevin Kirkland for a sit down chat. Infusionsoft acquired their Utah based startup GroSocial in January and my mission is to discover why they made their deal with Mask at Infusionsoft and not some other suitor.

Mangum puts it like this “What really sold us was when Clate (Mask) put himself in our shoes during negotiations to sell our company. We had a real sticking point to the deal and he basically backed off the term because he saw it through our eyes. This showed me he was a genuinely good guy.”

Kirkland adds; “It was not just about the money for us. Because Clate tells everyone ‘you are a co-founder of the next iteration of Infusionsoft’; it makes everyone feel like an owner. We wanted to be part of that.”

And finally, my chat with John McDowell, Account Manager, reveals his true love for the company; ‘We have great leaders here who have made a deep impact on me and my family. I am forever grateful to them.”

Focused on the Future

Combine these feel-good stories from inside with the recent investment from Goldman Sachs, and it seems Mask has all the stars aligned for Infusionsoft. In fact, the very presence of Goldman as an investor is a minor miracle in itself. It seems one week before Mask and the Board of Directors were about to close a deal with another unnamed investor, Olga Lozovskaya of Goldman Sachs made a call out of the blue to talk to Mask. “If you are a day away from signing; then good luck. But if you are a week away from signing; we’d like to talk to you.”

In January, Mask and the Board of Infusionsoft announced their deal with Goldman Sachs. The amazing part? Goldman wasn’t even in the picture prior to the call from Lozovskaya.

But because Goldman has an initiative called ‘10,000 Small Businesses’, they are serious about the true small business space. And this aligns perfectly with the target audience of Infusionsoft.

“We believe Infusionsoft is the market leader in delivering an all-in-one sales and marketing software solution for true small businesses,” says Raheel Zia, managing director for Goldman Sachs Group. “Infusionsoft is a proven partner in working with small businesses and Goldman Sachs is pleased to be an investor in this highly innovative and unique company in the software as a service industry.”

Even with all the success to date, Mask is still a very humble man. Charisse tells me the story of how Mask wakes up everyday and makes all the lunch sandwiches for the family so she can have her morning private time. Sixteen slices of bread and eight sandwiches in all, she jokes he “goes through a loaf of bread almost every morning and never complains”.

And the chances Mask will lead Infusionsoft to the promised land? CRM Analyst Paul Greenberg has been following them since 2004. When I ask him what he thinks about their future, he tells me he firmly believes they will reach their stated goal of 100,000 customers.

In addition, Scott Petty, Infusionsoft Board Member and Managing Director of Signal Peak Ventures (one of the first investors in Infusionsoft), says this; “Clate is a very unique CEO. He doesn’t lose touch with the customer or the staff and because they (Infusionsoft) have a very sticky solution; we have high hopes for the future.”

Petty also uses words like ‘visionary’, ‘entrepreneurial’, and ‘charismatic’ when describing Mask. He says they are very happy with his leadership and will support him as he leads the company toward a hopeful future IPO.

In my final quest to unearth the secrets of Mask and Infusionsoft; I have one last opportunity to sit down with him in a quiet room away from all the bustle of the conference.

When I ask Mask to tell me the real reason he is doing all this, he looks me square in the eyes and says;

“Eric — I just have a real passion to help true small businesses. It is a cause and I believe I am called by my faith to be a good steward of all that has been given to me. So my intent is to stand up for the small business owners and entrepreneurs out there who need real help and encouragement.”

Well, I for one am a believer. There is no doubt with Clate Mask what you see is what you get. He is not in it for himself and firmly believes he is called by a higher power to stand up for the little guy. Who doesn’t love a hero like that?

Eric T. Wagner, Contributor

http://www.forbes.com/sites/ericwagner/2013/04/09/with-54-million-from-goldman-sachs-infusionsoft-is-on-a-roll/