Monday, September 20, 2010
Interview with Eric M. Jackson, CapLinked
Story by Benjamin F. Kuo
Today's interview is with Eric M. Jackson, CEO and co-founder of CapLinked (www.caplinked.com), which is developing tools to help entrepreneurs and investors connect. Eric is an experienced entrepreneur, and was a very, very early employee at PayPal, where he was recruited by Peter Thiel. Eric is also author of the book The PayPal Wars: Battles With Ebay, the Media, the Mafia, And the Rest of Planet Earth, where he documented that experience. He also gave us some of his thoughts on why the "Paypal Mafia"--former PayPal employees--have gotten so much success from their startups.
Eric, what's the story behind CapLinked?
Eric M. Jackson: The story behind the company, is we're trying to solve a real world problem. My cofounder and I know how hard it is to get a company up and running, and funded, to keep your investors in the loop. Having both done it before, we thought we could build a company that could help entrepreneurs raise money, and keep them updated on the company.
How do you do that?
Eric M. Jackson: CapLinked is actually a collaborative platform, a social platform that connects entrepreneurs and investors. It allows you to share private and confidential information about your company, and have a dialog with your investors, within a walled garden where you can put the documents you need for diligence. It connects companies with investors, allows investors to forward on referrals to other investors, and once an investment has been made, allows a company to post updates to the site. For investors, it gives them a dash board of key metrics, and ensures those investors stay in the loop.
Who would find this most useful?
Eric M. Jackson: It's actually two audiences, both the entrepreneur and investor. For entrepreneurs raising capital, the tool makes it easier to be transparent and share information. That makes it easier to get money in the door, and keep investors happy for follow on investments. For investors, it's like Schwab -- you can track you investments in one place, and have an idea of what is going on with your companies. It's like a Schwab for private companies, your whole portfolio is in one place, all of the documents, and records of what is going on with your portfolio of companies.
Let's talk about your experience at PayPal, as one of the first employees--for folks who haven't read your book?
Eric M. Jackson: I was the first Senior Director of Marketing at PayPal. I joined in 1999, and Peter Thiel had recruited me--before I even knew for what job. The company was about to close their Series B funding, and the company had just launched the website. This was back when you had to do a couple of rounds of funding to just get your product out of the door. I lived through an amazing experience over the next four years. At one point, we had to turn around our model, when our number one customer--eBay--became our biggest competitor. I wrote the book because I thought the story needed to be told.
So how'd you end up here in Southern California?
Eric M. Jackson: I was originally from Southern California, and just took a ten year journey to the Bay Area. I went to Stanford, where I met Peter Thiel, and stayed there through PayPal, and then decided to come back down here.
So back to the company--is the product live yet?
Eric M. Jackson: We currently have some beta users, and the product is up and running. We have around 150 people on the site testing it out, and we're just preparing to send out more beta invites now. We're building out the capital raising tools to help people raise money, and we want to make sure to get the word out about it to people interested in using it. The last batch of betas are going out in a week or so, and we'll look to open to the public later in the fall.
What's the business model behind the site?
Eric M. Jackson: It's free, for now. At some point, after the beta period, we may have some nominal fees for using the service. The goal for this is for this to be a collaborative network for entrepreneurs and investors, so it's never going to be expensive. And, to be clear, this is not a pay-to-play service, like the other services who do charge entrepreneurs to put their business plans out there. What we're doing, is letting entrepreneurs to access the social graph. It will always be free for entrepreneurs to raise capital, that functionality will always be free.
What's your opinion of the term "PayPal Mafia"?
Eric M. Jackson: I think it really tells you about the high quality of the people who were recruited there. The management team had committed to bringing in excellent people, who could thrive in extreme turmoil, and move really quickly. We went from losing $10 million a month in 2000, to the first Dot-Com to reach an IPO after 9/11. We went IPO in February of 2002, which was a pretty dramatic accomplishment. That really speaks to the incredible people we had, how well we had staffed the company, and how we learned the skills that were necessary to be a good entrepreneur. There's nothing like learning on the job, being in that kind of environment. Excellence was encouraged, and the management team there--Peter Thiel, Max Levchin, and David Sacks--created a nurturing environment for becoming an entrepreneur. We've had a class of people who have gone on to start fantastic companies, such as LinkedIn, YouTube, Yelp, and Yammer. they are some truly remarkable people, creating remarkable companies.
Finally, for CapLinked, how has the firm been funded?
Eric M. Jackson: We did some seed financing, via a friends and family earlier this year. We actually used our own product with those family and friends, so they could try the product themselves. I'm a big believer in eating your own dog food. We'll be looking to do another round of funding later this year.
Thanks, and good luck!