How 6 Unlikely Investors Snuck into that Monster Evernote $1 Billion Round
As was reported two weeks ago Evernote has raised a whopper of a new round of financing: $70 million at a $1 billion valuation. Evernote's founder and CEO Phil Libin has never been one to maximize the valuation for the sake of bragging rights. The price was a nod to two things: Evernote has built a truly impressive business, and it was a round many investors were dying to get into.
What hasn't been reported is that amid this wildly oversubscribed round, Libin decided to carve out a $7 million allocation for a handful of mentors who helped him out when he'd just arrived in Silicon Valley and was a relative nobody.
The "CEO club," as Libin calls it, includes a mix of names you don't see everyday: Marc Benioff of Salesforce, Jerry Yang of Yahoo, Sky Dayton of Earthlink, Alexis Ohanian of Reddit, Hiroshi Mikitai of Rakuten, and Loic Le Meur of Seesmic and Le Web. "One of the things I loved most about Silicon Valley is how open and welcoming everyone was," Libin says. "I was blown away by the attention I was given by some pretty impressive people."
It's a reflection of his very personal journey to build Evernote into a billion dollar company and the advice and help he got along the way. Le Meur was one of the first friends Libin made when he moved to the Valley. Yang gave him advice on keeping a company's culture as it grew. Mikitai had one of the biggest impacts on him, inspiring Libin to try to build a company that could live for 100 years -- something many people in the valley are skeptical can even be done. "These were all people who really shaped my thinking," Libin says. "Most of the conversations were around how you scale a team without losing your culture, and how you remain innovative when you have 1,000 people."
That weighs heavily on Libin: His company has tripled in size of the last year and will triple again in the next twelve months. "These are all founder CEOs, and four of them have built multi-billion dollar public companies from nothing, and each of those companies had huge significance," he says. "When I started hanging out with them, it simultaneously made me realize how far we have to go and that their first time they hadn't done it before either. It was humbling and encouraging."
The idea of the CEO club hit Libin after a conversation with Benioff, where he asked to invest. Beset with VCs trying to get in the round, Libin was avoiding conversations like these. He's not the kind of guy who likes to tell people no when they believe in his company. He started to tell Benioff there was no room, when it struck him that relationships like these was part of what had helped build Evernote to this stage. He decided on the spot to carve out a chunk of the round for guys like Benioff instead of saying no.
Being a first time CEO myself, I can totally relate to the gratitude and sense of awe Libin is describing. I've been blown away by how many people have helped me in PandoDaily's short journey so far. And since Libin is one of the CEOs I look up to, I asked his advice for first time entrepreneurs and CEOs like me.
"Evernote is my third company, and I guess the advice I would have given myself is just only build for you," he says. "Just build the stuff you love. I'd built two other companies and sold them and done pretty well, but it never occurred to us we could be the target audience. The whole trick of Evernote is that on our third company we finally got wise to the fact that we're the customer. So I guess if I could go back and talk to me years ago, I would make Evernote my first company, not my third."