Mayfield On Voxeo: No Regrets

Mayfield’s David Ladd, who was on Voxeo’s board when the company was struggling to survive in the wake of the dot-com bust (see my previous post on Voxeo’s recap funding), said founder and CEO Jonathan Taylor “has proven to be a true entrepreneur” and deserves all the success he gets.

But Ladd also has no regrets about cutting Mayfield’s losses and exiting the company when he did, five years ago. Mayfield turned over its interest to Taylor for $1, Ladd said, after investing, along with Crosspoint, around $38 million.

“We could have been mean VCs — we could have kept our ownership and said ‘Too bad, good luck,'” he said. “But when we decide not to support a company with new money, our responsibility is to the debtholder and the employees and the founder. We try to make them feel good about not being a big success.”

Mayfield did keep its ownership as Taylor cut Voxeo’s burn rate, laid off employees, closed the Silicon Valley office, negotiated Voxeo’s debts and moved the company to Florida. But when Taylor told Ladd that Taylor was doing all the work and wanted to take over the company, Ladd (and Shapero at Crosspoint) agreed. “We want to either support a company or get out of the way,” Ladd said. “We want to move it forward.”

Ladd also agreed with Taylor on some of Voxeo’s “classic bubble mistakes” — growing too fast for the number of customers it was getting and bringing in “big company management that didn’t know how to be scrappy.”

“We all learned from our mistakes” in the bubble, Ladd said. As for Taylor, “he didn’t look for handouts, turned the company around, cut the burn, went without salary and scrambled…I admire what he’s done.”