Spokane Journal of Business

Ex-Spokane venture now worth nearly $1 billion

Docent Inc.’s founder still lives here, is mulling next move, might launch fund

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Docent Inc., a Silicon Valley company that cut some of its teeth while based in Spokane as Stanford Testing Systems Inc., has grown to a market capitalization fluctuating around $1 billion following a highly successful initial public offering in late September.

Docent, which produces software that enables its large corporate clients to train their workers using online technology, was founded by Pardner Wynn as Stanford Testing in the late 1980s, and moved to Spokane in 1994. Here, it fine-tuned its collection of software aimed at helping high-school students prepare for college-prep tests, and began developing a software engine that would enable corporations to offer training to their employees online.

In 1997, with that training software getting closer to being ready for prime time, Wynn spun off the college-prep software and the Stanford Testing name, and secured venture capital to focus on the corporate-training market under the name Docent. The venture capitalists, however, required that Wynn move his venture back to the Silicon Valley, where they said it would be able to attract the kind of talent needed to make Docent a national company.

The company since has been able to take that software to market, and has landed such customers as Andersen Consulting, Lucent Technologies, Pitney Bowes, and Nike. Wynn, 43, stepped down as an officer of the company in 1998, but served as chairman until early this year and remains on the board.

Though Docents sales only this year began to grow, it posted revenue of $5.2 million for the nine months ended Sept. 30, compared with $382,000 in the year-earlier period. Docent expects fourth-quarter revenue of $4.6 million. Like many young tech companies, however, Docent isnt profitable; it posted a third-quarter net loss of $25 million, or 89 cents per diluted share. The company now employs about 200 people and is located in Mountain View, Calif., near San Jose.

Docent went public on Sept. 29, raising net proceeds of $81 million, and its shares since have shot up from the original offering price of $11 a share to over $27 before falling back to about $22 earlier this week. Its market capitalization has fluctuated in recent weeks between about $850 million to over $1 billion.

The companies shares are traded on the Nasdaq quotation system.

Wynn is the single largest non-institutional shareholder, controlling about 2.2 million shares of common stock, or about 5.6 percent of outstanding shares. At current market prices, his stake in the company is worth about $50 million.

Wynn, who lives just north of Spokane, says he now is mulling his next move.

He says that likely will involve either starting another company or investing in other startup ventures here.

He says he also will spend some of his time trying to boost Spokanes relatively small technology sector by preaching the virtues of investing in and cultivating startups with the expectation that maybe three or four out of two dozen will survive and succeed here.

We dont need to be trying to start Microsofts or Ciscos. You need to hit base hits before you go after home runs, he says.

To make the model work in Spokane, Wynn says, a venture capital poolperhaps about $10 million to startneeds to be established that would be willing to invest in about 20 startups. He says hes ready to help launch the fund and be a substantial contributor in it.

Spokane, he predicts, will continue to have difficulty attracting tech companies and talent, as evidenced by the demand by Docents original venture-capital backers to move that company back to Silicon Valley. But hes convinced Spokanes tech sector can eventually flourish by funding and encouraging entrepreneurial activity.

Wynn also was to hold a press conference this week to launch a self-funded, $8 million foundation called Nates Promise that would seek reforms in child custody laws in Washington. Wynn is just completing a lengthy divorce proceeding.

  • Paul Read

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