Gerry Dick of Inside INdiana Business invited Jay Love onto the show to talk about year one of Bloomerang and his philosophy on startup investing. You can watch a replay of the video interview here.
The co-founder of a technology startup says he has no interest in growing the company to be sold, but rather, “building it for the long term” in Indiana. Indianapolis-based Bloomerang produces donor retention software targeted at nonprofits and this month is marking its first year in business. Tech veteran Jay Love says the company has grown to 15 employees and nearly 200 customers. In a Studio(i) interview, he says a unique aspect of the venture is its focus on long-term dividends, instead of investor returns.
Love is no stranger to building and selling tech companies.
The Butler University graduate was CEO and co-founder of Indianapolis-based eTapestry and led its sale to Blackbaud Inc. in 2007.
At the time, the company had more than 10,000 non-profit customers.
Gerry: Well entrepreneur Jay Love has been in the business of creating technology companies focused on the nonprofit sector for more than three decades. His latest venture, Bloomerang, is celebrating its one-year birthday, if you will – and Jay Love – thanks for joining us here in the studio.
Jay: Thanks for having us today!
Gerry: Let’s talk about this latest venture, Bloomerang – we’ll talk about growth in a second – but give us the model here. This is a software product focused at nonprofits?
Jay: Yes, it’s a cloud-based technology play for nonprofits, and we take care of their database and communication needs. So if you’ve ever been on the receiving end of a nonprofit or a letter, we might be the driving force behind that.
Gerry: Talk about the model: this is a software that’s really focused on donor retention and donor loyalty.
Jay: When I’ve been involved with eTapestry before and we the market, and people kept saying “the market is in need of something that builds in best practices and helps people retain donors and helps them with communications best practices” – so I aligned myself with two really well-known industry experts that lent their intellectual property to help this come to life, and so far the market’s really received it very well.
Gerry: You mentioned eTapestry, a successful company from a number of years ago. You’ve been in this space for 30+ years. How has the nonprofit sector, especially as it relates to technology, changed?
Jay: I can remember back in the early 80s helping people with databases and we were taking their records from 3×5 cards in shoe boxes, to now where at least people – even if they’re small – keep their data on spreadsheets or some kind home-grown database. And they’re realizing now that they need a little bit more of a sophisticated technology so that they can build in the communications and do all that, and they’re all realizing that they can do it from the cloud now rather than their desktop.
Gerry: Let’s talk about growth. In one year now, Bloomerang has grown in terms of both customers and employees.
Jay: We are now nearing a couple hundred customers, not quite there yet, but near that number – but more importantly we now have 15 employees that are working with us. And considering that it’s not a venture capital backed company – we have some very well known angel investors from here in the community – we’re really delighted with that growth so far.
Gerry: You talk about building a company for the long term – and I know that’s a key part of this model – building Bloomerang, an Indiana-based company built for the long haul, not for a short term sale.
Jay: Right, and it was sort of interesting talking to the various investors, Gerry, because people had seen some real success stories here in the city. But a lot of times after that company has sold sometimes that landscape changes. It’s not quite the same culture, not quite the same business model for them, and we really wanted something that would build for long-term dividends rather than something that would be sold in a few years. And that’s very close to home for our employees and the nonprofit executives that I’m talking to, because they’ve been taken through a lot over the years – where they’ve bought a product, the company was purchased, and they’re told that product is no longer going to exist. That’s a hardship.
Gerry: And you feel this is a model that can work: building a company for the long-term, rather than the VC model?
Jay: I started researching this, Gerry, and you and I were talking a little bit about this before going on the air, that the average limited partner to a venture capital firm over the last 10 years, their rate of return has been just over 6%, which is actually 3 or 4% below what the stock market has paid, if you were in an index stock market fund. And I think people, especially angel investors, are looking for something better for their money.
Gerry: Final question: as you look going forward, additional opportunities for growth?
Jay: We’ll continue to grow, stay here in Indianapolis, but we’re really catching hold now because people really like to have reference accounts and know people in their community that are using the product. And now that we’ve got the product in probably about half of the states, we’ll see that momentum continue to grow.
Gerry: Alright, Bloomerang, one-year old now, another Indiana success story in the making!