and complex. Others said the idea and the market were too small. “Raising capital is a most painful process. You’re begging for money,” says Coleman.
He narrowed his search for financing to venture capitalists who understood the problem of information technology management and had serious questions for him about solving those challenges. Still, if Coleman were to get his venture off the ground, he needed those venture capitalists to say yes.
First-round funding eventually came from Technology Partners, a Palo Alto, California-based venture firm that manages more than $400 million in capital. Its Technology Fund VII, L.P. anted up $3 million. Coleman and his team were able to raise the capital in less than 90 days–something unheard of at a time when the industry was taking a beating. “They [critics] told us it couldn’t be done,” Coleman muses. “They said we were crazy, that nobody was getting funded during that time.”
Like Gibbons, Darryl Wash, managing partner of Ascend Venture Group L.L.C., an African American-owned venture capital firm in New York, agreed that ITM was fundable, largely due to Coleman. In fact, Ascend wanted to be part of the first round of investments in ITM but had to be content with waiting until round two. “This is a significant market opportunity that is geographically boundless,” says Wash of the information technology management space. “[ITM] has an experienced management team and a business model that we think will be
able to scale and generate financial profitability in a relatively short time.”
Despite the Coleman name, Wash says the fund looked for specifics about the company’s marketing strategy, customer service apparatus, and competitive advantage before making a capital commitment. Says Wash, “When they pitched me over two years ago, this solution was needed because technology was under pressure. So many things were bought and cobbled together. People didn’t know what they had or how to get their hands around the challenges of information technology management. This has become even more difficult now that we’ve gone through the accounting and corporate scandals. When I became aware of ITM, we hadn’t yet had an Enron or Worldcom.”
Besides a tough tech climate and naysayers, Coleman admits that he had his moments of doubt. He consulted his mentor Price Cobb, author of Cracking the Corporate Code (Executive Leadership Council; $17.99) and mentor to numerous black executives. “I used to talk to Price all the time and say, ‘Should I do this?'” says Coleman. “I’d never raised money before and I wondered, ‘Would venture capitalists give money to an old black guy to sell a product that’s never been sold before?’ [But] Price kept pushing me. He said, ‘Why would you second-guess yourself? You have a track record; you have experience; you have good ideas.'”
At the end of the day, Coleman realized that he had nothing to prove, and as a high-profile corporate executive, he had nowhere to hide: “I hadn’t burned any bridges and I knew what I was doing. [This venture] reinforces to me every day that you plant