February 19, 2014
Foundation Capital
Nearly 10 years ago, I received a call from a former colleague, Netflix CEO Reed Hastings, with exciting news. John Hennessy, now president of Stanford University, had discovered at Stanford four incredibly bright computer science students and their professor, who had invented a new way to find errors and security vulnerabilities in complex source code.
Reed made introductions, and soon I was hearing about the product – Coverity Prevent – straight from the group’s leader, Seth Hallem.
Our network of relationships further affirmed just how exciting Coverity’s work was when Aki Fujimura, another friend of Foundation Capital and early board member at Coverity, also introduced my partner Mike Schuh to the company.
It was clear early on that Seth and his team had a fantastic product – one poised to usher in a fundamentally new generation of software development technology.
In 2006, Coverity invited Foundation Capital to lead its Series A investment, and I joined the Board of Directors. Bruce Dunlevie from Benchmark Capital took an observer seat, and his insight proved invaluable in helping to scale the company. In just a few years, Coverity’s client list grew to include 7 of the top 10 aerospace and defense companies, 9 of the top 10 technology hardware companies, and hundreds of Global 2000 companies who have come to rely on the Coverity platform to protect their brands and their bottom lines from software failures.
What began in a Stanford computer lab with four college students and their professor has grown to become the trusted standard when it comes to developing a secure infrastructure for the modern global economy. And today, we are excited to announce that Coverity has been acquired by Synopsys.
This is more than a monumental day for the company and a vote of confidence in the work of CEO Anthony Bettencourt and his team – it also represents a strong statement by Synopsys. In the development testing business, Coverity is second to none. And together, the two make an extremely powerful combination.
Our relationship with Coverity has been more about an investment of time, energy, and support than actual dollars. To help Coverity commercialize and grow its client list, Foundation helped recruit the entire management team, introduced them to key strategic partners and customers, and also connected Coverity to the significant players at large financial institutions. In doing so, we leveraged longstanding relationships and institutional knowledge developed over years of helping companies go from being nascent to being dominant.
Coverity’s success is an affirmation of Foundation Capital’s commitment to seeking out the best ideas being generated at educational institutions like Stanford, and to building the lasting relationships that can turn those innovative ideas into world changing companies.
Our investment in Coverity is one in a long line of successful ventures that began in university environments – including Financial Engines, Atheros Communications, EnerNOC, and others.
Foundation’s Young Entrepreners Program, whereby graduate students think and act like VCs on campuses across America, is also in service of our commitment educational institutions. The program gives students a chance to identify promising ideas, provide analysis, pitch ventures, and develop relationships with the entrepreneurs who are dreaming up tomorrow’s game-changing technologies.
So while Coverity is unique, I strongly believe its path to success is not. In the coming years, we’re going to hear more and more success stories like theirs.
In the meantime, we at Foundation offer our heartiest congratulations to Anthony and the team at Coverity as they embark on this new chapter.