RightNow Preps For Later IPO

Living up to its name, RightNow Technologies Inc. later this year will file an initial public offering after raising just one round of venture capital financing, said Chief Executive Greg Gianforte.

“We have been funding the business through the flow of our business operations and were looking for relationships more than capital when we raised the round,” Gianforte said. “We turned down investment banking funding and other mezzanine sources of funding because they did not come with the smarts of our venture investors.”

Greylock Management led the $16.2 million Series A round, which closed last month. Summit Partners also participated in the round. Those two firms invested in Gianforte’s first company, Brightwork Development Inc., which was acquired by Network Associates in 1994. As part of the deal, Greylock partner Roger Evans has joined RightNow’s board of directors.

Bozeman, Mont.-based RightNow develops Internet-based customer care systems for 400 customers including Nortel, VA Linux Systems and Ben & Jerry’s Homemade Ice Cream. Through an automated FAQ engine, keyword searching and a personal assistance utility, RightNow’s software minimizes response time and customer service costs for Web businesses. A recent report by Jupiter Communications shows that 42% of Internet businesses provide inadequate customer service.

Gianforte said RightNow has benefited from being based outside of Silicon Valley. The bulk of the company’s management team relocated to Bozeman, which hosts 85 technology companies in addition to The University of Montana.

“You don’t have to be in the greed capital of the West Coast to run a successful Internet start-up,” he said. “When everyone’s sense of self worth is tied into the stock price, people feel worthless when the company hits a bump in the market.”