These days, a $136 million investment in any company is big news. But a meetings and event technology software company? Even the Wall Street Journal and New York Times jumped on the story about the investment in Cvent, a meetings management technology firm, by venture capital companies New Enterprise Associates, Insight Venture Partners, and Greenspring Associates.
Reggie Aggarwal, Cvent’s founder, calls the investment “the largest in history for the meetings and event technology industry.”
Northern Virginia-based Cvent offers web-based software for meeting site selection, online event registration, event management, e-mail marketing, and web surveys and helps over 90,000 users in 40 countries manage hundreds of thousands of events, surveys, and e-mail campaigns.
The company has processed over $2 billion in online payments and has managed over 30 million event registrations and survey responses for its clients. This year, planners will book over $4 billion in meetings and events at hotels and venues using the Cvent Supplier Network, the company’s free online marketplace that connects meeting and event planners with venues. Last quarter alone, more than $1 billion in group business was sent by planners to venues through the system. Cvent’s client roster has grown to more than 7,500, including companies such as Coca-Cola, Procter & Gamble, and Wells Fargo.
The 41-year-old Aggarwal stumbled into the meetings industry from a career in law. “Although I liked being a lawyer, it wasn’t satisfying my passion,” he says. “I was one of 500 lawyers and didn’t feel like I was making an impact.”
In 1996, Aggarwal started a networking group for Indian entrepreneurs. The Indian CEO High Tech Council quickly grew to 200 members. Aggarwal expanded its focus, opened it up to others, changed its name to the Global Network of Entrepreneurs, and grew membership to 2,000 people.
“I was planning about 50 events a year,” says Aggarwal, and landing speakers like U.S. Secretary of State Hillary Rodham Clinton and Jim Gilmore, then the governor of Virginia. Plus, he was forming relationships with CEOs who eventually became Cvent investors.
Create an Aspirin
It was this networking group that gave him the confidence to start his own company. “I saw that these successful CEOs were no different than you or me,” he explains. But where to start? “To achieve success, one must find a pain point and create an aspirin. Not a vitamin but an aspirin. A vitamin is nice to have but is not necessary. An aspirin, on the other hand, is a must have.”
The pain point Aggarwal identified was the set of logistics that go into creating and executing a meeting or event. He sent out individual e-mails to members of his group and thought that there must be a way to automate the process.
“No one was doing it,” he says. “Plus, I found the meetings industry to be such a unique, massive unheard-of space.”
Aggarwal borrowed $100,000 from his parents, drained his savings, got $250,000 of credit, and launched Cvent on September 4, 1999, as the dot-com market was booming. Within months he grew the company from six employees to 125.
The Bottom Falls Out
Then, in 2001, everything changed. The dot-com bubble burst, the terrorist attacks on September 11 devastated the world, and reality hit. He had 125 employees and nothing to pay them with.
“We quickly fell from being a hot startup to being the walking dead,” he remembers.
He was living with his parents, had no income, and owed his family and friends thousands. Plus, he had to cut his staff by 80 percent to 25.
His challenges even extended to office space. He had planned for 250 employees and now the company was down to 25. He couldn’t get out of the five-year lease but negotiated a reduced rent if he personally guaranteed it.
“My management team saved us. They pulled us through,” he says. Eleven of the 12 on that team are with the company today. “We got back to basics: building a good product and servicing our customers. No secret sauce. It was just survival. I had put everything on the line.”
Aggarwal started personally making sales calls. The CFO, a Harvard Business School grad, became the bill collector. Vice presidents worked as customer service agents.
Things slowly picked up and Cvent added one employee in 2002 and three in 2003. By 2004, it was up to a staff of 50. Over the next seven years the company grew to 800 employees.
“The DNA of your company is your people,” says Aggarwal. He is so committed to this that he interviews almost every job candidate and attends college recruitment events across the country.
Three years ago, C. Maylena Burchfield, executive director of ADTRAV Travel Management, a Birmingham, AL-based travel management company was looking for a software registration company for meetings and incentives that would also help with RFPs. She was impressed with the Cvent software but does not partner with a company before thoroughly researching not only its products, but also its CEO.
“I tapped into my political as well as corporate connections and couldn’t find anyone who had a negative thing to say about Reggie,” says Burchfield.
After working together for some time, Burchfield, who chaired the legislative advisory council for the Global Business Travel Association (GBTA), appointed Aggarwal to the council.
“The more I learn about him, the more I like him,” she says. “He empowers his team. His key management has been in place since the beginning and that speaks volumes about him as a leader. Ironically, I’ve found his hotel database has information in it that not even the individual hotels have.”
Cvent plans to hire more than 200 employees over the next year, bringing its staff total to 1,000. At least half of these new hires will be engineers focused on enhancing the company’s meetings management and web survey products, particularly in the areas of social media and mobile.
“The meetings industry is evolving so rapidly and advancements in mobile and social media are really leading the way forward,” says Aggarwal. “Just like events, social media is all about networking, education, and building relationships, so it’s only natural that the meetings industry is embracing these tools.”
Being on the verge of bankruptcy is something one does not soon forget and as a result, there is no room for frivolity in Aggarwal’s company. When Aggarwal travels to trade shows and conferences, he and the rest of his staff share rooms. First-class air is not even a consideration. “The reality is I’d rather take that money and invest it in our product, in client services, or in sales and marketing,” says Aggarwal. “We’re still in a building mode, we’re still a startup, and we need to continue to invest in the future.”
It is fitting that one of the mantras Aggarwal lives by is the Chinese proverb “If you fall down seven times, get up eight times.”