The biggest winner of DocuSign Inc.’s long-awaited initial public offering isn’t well-known. The venture capitalist has never appeared on a Midas List, and his firm isn’t one of the venerable investment firms on Sand Hill Road in Silicon Valley.
But 12 years ago, Pete Solvik made a bet on a startup that lets people securely sign contracts online. So sure of the idea, he kept buying shares over the years for his firms, Sigma Ventures and San Francisco-based Jackson Square Ventures, where he’s a partner. Last Thursday, DocuSign went public at $29 a share, and the stock rose 37 percent in the first day of trading on Friday. Solvik’s funds hold the biggest stake in the company, with a combined 13 percent now worth $687 million.
Solvik’s commitment to the San Francisco-based software company outlasted even co-founder Thomas Gonser, who now holds just 1.5 percent of shares. The payoff for Solvik and other investors didn’t come fast or easy. Most startups go public or get bought in about half the time. DocuSign changed strategies a few times, shifting the sales focus from small to large customers and expanding from real-estate customers to other industries. Results in those new sectors took longer than expected to materialize, said Gonser. “We expected crazy growth. It didn’t happen,” he said.
Another factor that complicated decision making was DocuSign’s unusually large board. The company had entertained acquisition discussions with IBM, Microsoft Corp., Oracle Corp and other potential suitors. But the directors, a dozen in total, frequently disagreed over the years, people familiar with the interactions have said. Gonser and early investors would push for a sale, while later investors advocated for an IPO. This dynamic intensified during the company’s fraught search for a chief executive officer—a 15-month process completed last year with the hiring of Dan Springer. Solvik, who had known Springer since 2004, led the CEO search.
Solvik, 59, has quietly worked his way around the Valley for decades. He worked at Apple Inc. in the early 1980s and Cisco Systems Inc. in the 1990s, where he rose to chief information officer. He left Cisco in 2002 to become a VC. Solvik joined Sigma Partners, based in Campbell, California, on the outskirts of San Jose. (Whether the location classifies as Silicon Valley would be a matter of some debate.)
Before DocuSign, Solvik had few deals of note. His most successful investment was in a data company called Topio, which NetApp Inc. acquired in 2006 for $160 million. To accumulate a 13 percent DocuSign stake for his funds, Solvik spent $17.5 million. He declined to comment, citing legal restrictions ahead of his company’s debut.
DocuSign counts some of the technology industry’s more recognizable names among its backers, but their wins won’t be substantial. Kleiner Perkins Caufield & Byers and Alphabet Inc.’s GV each invested later in DocuSign’s life and own less than 5 percent.
Gonser, the last of the three founders to leave, has been reducing his DocuSign holdings for years. He still owns $82 million of stock but relinquished an operational role at the company more than two years ago to do venture investing and is now a partner at Seven Peaks Ventures in Oregon. He had been selling shares for years to the company. The most recent transaction was in 2016, when Gonser sold $3.3 million in stock at half the current price.
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