Plenary sessions
Saturday, 11/14, 9:30 am - Venture Capital Award of Excellence
Entrepreneurs David J. Meyer, Paul Sagan and Dr. Adam D. Singer each received the Ernst & Young Venture Capital Award of Excellence Saturday at the Strategic Growth Forum. The award is sponsored by Square 1 Bank.
The winners were selected by an independent panel of judges from more than 50 qualified Ernst & Young Entrepreneur Of The Year 2009 regional winners. The judges focused on successful companies that have received venture capital funding using criteria including revenue growth; EBITDA margins; and the entrepreneur's story.
“The winners of this award demonstrate that venture capital continues to fuel the engine of innovation and entrepreneurial success,” Said Bryan Pearce, head of Ernst & Young's Venture Capital Advisory Group. “Venture-backed companies have become, and will continue to comprise the Russell 2000 and ultimately Fortune 500 companies of the future. We're proud to play a role in their formation, growth and success.”
Pearce presented the award along with Mark Heesen, President of the National Venture Capital Association, and Susan Casey, Founder Chief Credit Officer & Chief Operating Officer, Square 1 Bank.
According to Heesen, companies that got their start with venture capital financing today account for 12.1 million US jobs and generate revenue equivalent to 21 percent of US GDP. “Not only do these companies foster important economic growth but they innovate at a rapid pace, changing the way we all live and work for the better,” he said.
“We consider ourselves to be entrepreneurs serving entrepreneurs,” Casey said. “Because of this Square 1 Bank is particularly proud to be sponsoring this award.”
A Look at the Winners
David J. Meyer
CEO, Titan Machinery
Fargo, N.D.
Founded: 1980
Already a success story by the 1990s, David Meyer and his team at Titan Machinery recognized that dealer consolidation was vital to the company's continued growth. The opportunity was great for rapid expansion through acquisitions, and venture capital was the key to taking advantage of that opportunity.
Implementing a strategy of bringing in outside equity to acquire dealerships, the company completed a round of series A and series B preferred stock, convertible subordinated debt and, finally, a piece of mezzanine financing. Seeing the possibilities for the future, Meyer and his team began operating the company as if it were public. They put together a new board of directors and initiated reporting and other disciplines similar to that of a public company. The strategy worked, and worked well.
In December 2007, with 35 locations and annual revenues of approximately $400 million, Titan Machinery successfully completed an IPO. Today, it is one of the largest networks of full-service agricultural and construction equipment stores in North America. In just two years, those 35 stores have grown to 68, and revenues for the latest fiscal year were in excess of $690 million.
Meyer, who has spent his career turning creative ideas into successful business ventures, is far from completing the journey of the company he founded. Under his leadership, Titan Machinery has implemented strategies for continued success, including incentive programs for employees, store operating models, balance-sheet management and partnering with manufacturers to create product lines that are unique to the industry.
The company also is expanding into markets overseas by working with foreign farmers, teaching successful agricultural techniques and providing advanced equipment.
Paul Sagan
President, CEO
Akamai Technologies Inc.
Cambridge, Mass.
Founded: 1998
As anyone who remembers the foot-tapping frustrations of that time will attest, the early years of the World Wide Web were marked by congestion that resulted in a slow and inefficient process of accessing information over the internet. Two technology visionaries, Tom Leighton and Dan Lewin, successfully took on the massive challenge of creating a better information-processing method that would finally end what had come to be known as the “World Wide Wait.” Akamai Technologies was born.
The co-founders' solution, rooted in applied mathematics and algorithms, was presented at the Massachusetts Institute of Technology's 1998 $50K Entrepreneurship Competition. Their business proposition was selected as one of six finalists among 100 entries, a distinction that signaled that internet content delivery had serious market potential.
As a result of the competition, the pair won the attention of two venture groups — Battery Venture Partners and Polaris Venture Partners — through which Akamai obtained needed funding and was ready to go. And grow. Akamai obtained an exclusive license to certain intellectual property from MIT, and development efforts began.
Enter Paul Sagan, who started as a consultant for the company but was persuaded by its then-CEO to join the team as an executive in 1998. Sagan was president as the company both rode the high-tech bubble and saw it burst. He helped Akamai withstand the setbacks and oversaw pivotal improvements in services to customers, including the introduction of its EdgeSuite service in 2003. In less than a decade, Sagan and Akamai have changed the way business is done on the web, allowing both large and small companies to be more nimble and innovative.
Dr. Adam D. Singer
CEO, IPC The Hospitalist Company
North Hollywood, Calif.
Founded: 1995
Seeking to improve the quality of care delivered to hospital patients, Dr. Adam Singer was a pioneer in the creation of a new specialty: hospital medicine. Simply put, “hospitalists” are physicians who tend to the needs of patients from the time they are admitted to the hospital to the time they are discharged.
Dr. Singer developed a think tank consisting of physicians and healthcare executives to help him develop the “hospitalist” approach and to create a sound business model around the idea. InPatient Consultants Management, Inc., forerunner to IPC The Hospitalist Company, was founded in 1995.
Two years later, Dr. Singer began to raise venture capital to fund the building of a world-class national hospitalist practice. Some of the leading healthcare investors in the country invested more than $40 million to support his plans. He used this capital to build the nation's largest hospitalist group that today employs more than 1,200 people in 18 states.
The goal of the company, which went public in 2008, is to ensure that its hospitalists are given the tools they need to successfully develop their practices while they provide efficient and effective patient service.
To that end, IPC developed a leading-edge web-based system called IPC-Link, which gives the company real-time access to the activity of its hospitalists at any point in time. The system also provides each hospitalist with a “virtual office” that provides relevant information such as patient encounter activity, medical education information and quality metrics.
The IPC-Link system has enabled IPC to grow quickly, with limited increases in related overhead costs. Under Dr. Singer's leadership, IPC reported operating profits of $22.5 million in 2008.
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