Pivot3 CEO Gone

Author: Carlton Purvis, Published on Apr 30, 2013

When Pivot3 previewed their company plans for 2013, it did not include major changes in leadership. However, the company has confirmed today that Pivot3 CEO Rich Bravman, has stepped down and Chief Technology Officer and founder Bill Galloway is filling the role. Pivot3 says Bravman left for "personal reasons." [UPDATED below with interview with the new CEO.]

However, our understanding from industry sources is that the change at Pivot3 comes from pressure to meet aggressive revenue goals set by its investors, especially considering its raising of $23 million for expansion last year. Pivot3 previously reported nearly doubling its revenue in 2012.

A Pivot3 engineer we spoke to this afternoon says no official notices have been sent to employees about the changes.

Last month, in an interview with IPVM, Bravman bucked rumors of restructuring and said the company projected this year’s growth to be 50 percent over 2012. The company has 90 full-time employees and was hiring to fill new positions. 

We have an interview with the company's new CEO tomorrow morning. We will update as new information becomes available.

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Comments (6)

The 'personal reasons' explanation does not fit with someone truly leaving for 'personal reasons'. When a CEO genuinely does so, they give ample time for a smooth transition, a formal press release praising him/her is sent out and a new CEO is already lined up. None of this happened here. Either Pivot3 is mishandling something quite basic or is not telling the truth.

I am not sure if they actually believe they are going to IPO or if this is some sort of smokescreen, but it is extremely unlikely they will IPO anytime soon, if ever. Even by their own optimistic projections, 2013 revenue would still be less than $50 million. And they acknowledge they are not yet profitable (though again hope to be this year). In the US market, trying to IPO with such low revenue and weak (or non-existent) profitability is a huge barrier. As the Chairman of the National Venture Capital Association said to CFO magazine, "Venture capitalists now look at $100 million as the minimum revenue threshold for an IPO."

Just got this statement from Pivot3 on revenue:

"We are not revealing specific numbers but what we can say is we are seeing significant growth in surveillance in what we call Safe City projects (transportation, municipal, government, parks and monuments). In VDI, the healthcare and education verticals are delivering numerous opportunities for growth."

Will they make it past 2013? Saying they will not grow 80% but will have some growth sounds very weak and likely a sign of worse times to come.

They got $23 million about 15 months ago. To that end, I would be surprised if they had any short term / 2013 issues. Let's see what the new CEO does ... when they find that person.

Looking at what they offer they should be poised for an explosive year. Is their problem technical? Is it lack of competent adminstration? Is it smoke and mirrors? Pricepoint too high for perceived value? The concept is there so the problem should be fixable.

I think the 'concept is there' for only a narrow slice of the market. Basically, Pivot3 has potential for the 100+ camera per site segment (otherwise lots of other cheaper / simpler storage options are viable and the redundancy benefits are not applicable). With such a niche, they might address 5 or 10% of the market. Because of that, there's a limit in how big the company can get and how fast they can grow.

Pivot3 services a niche of a niche of a niche (large scale systems within storage within surveillance). That's a tough recipe for a company with $100+ million investment.

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