The million dollar investment came during the third round of seed financing and is one of Active Capital’s largest, representing the majority of its $2.5 million. The deal was signed in mid May.
Austin-based Pingboard was founded in 2014. Its software develops customizable organizational charts for companies. Company officials said it began focused on software that developed company directories, but quickly found that customizable org charts — accessible on the web and on mobile devices — was their most requested application.
“It basically lets companies easily build an org chart which every company in the world has to do,” Pingboard co-founder Bill Boebel said.
The company has more than 1,000 paying clients, while its free version has more than twice that number. According to Boebel, they are building a tool to attract tens of thousands of customers.
“I would have never guessed that there would be this much demand or this much need in the market for org charts when we got started,” he said.
This round of funding will allow Pingboard to focus on using the product to plan a company’s expansion. That’s something that Boebel is having to deal with right now at Pingboard, as they plan to double their staff in the next year.
“We run into the same thing that some of our customers have been asking for,” Boebel said. “We have even more of a compelling reason to build it out.”
The investment reunites Active Capital general partner Pat Matthews and Boebel. The two founded the company Webmail.us, an email company that earned nearly $10 million in revenue before being sold to Rackspace in 2007.
Matthews says the history he shares with Pingboard is one reason Active Capital made the million dollar investment, describing their normal investment amount of between $100,000 to $500,000.
“I’ve been very close to Pingboard since the beginning. Personally, I was an angel investor very early. Bill and I are good friends, so we’ve always stayed in touch. So, I was very close to the evolution of it all,” he said.
The deal marks Active Capital’s tenth since last August, which may surprise people since the fund hasn’t done an organized media push. Matthews said Active Capital was more focused on making good investments and working with founders than promoting itself.
“Coming out of stealth mode has not been the highest priority,” Matthews said. “Doing 10 deals in six or seven months keeps a small team busy.”
Active Capital invests in business-facing software as a service companies that make money, and are still run by their founders.
For Matthews, founding Active Capital has been a return to what he enjoys: working with passionate company founders to grow businesses.
The deal also reunites Boebel with Rackspace co-founder Pat Condon, who is now an Active Capital partner.
“When it comes to things that companies face as they grow, he’s got a lot of experience,” Boebel said.
In a filing with the Securities Exchange Commission, the $2.5 million appears as $5 million due to convertible notes from a previous round. Boebel wrote a piece for VentureBeat explaining the difference and pushing for a new way to fund SaaS companies.
The post also explains why Pingboard decided to go with an additional seed round rather than a Series A, which would require giving away more equity to venture firms. He wrote that a seed round allows the company to focus on a smooth manageable growth trajectory, rather than growing as fast as possible to satisfy investors, burning through cash and having to raise another round.