SuccessFactors is a publicly traded company on the NASDAQ and started in 2001 with the assets of a company that failed during the dot com bust.  Below is part of the story from an interview conducted by Sramana Mitra with the CEO, Lars Dalgaard.

Lars Dalgaard:  At that time, in 2001, if you can remember that, I felt that most venture capitalists were just scurrying and running away from class action lawsuits and they were so afraid of getting caught; there were a LOT of class action lawsuits at the time. It was like bargain hunting time.

I didn’t have any money, so I got clever. I went to an auction in Redwood City, and they were selling these dotcoms every three minutes, and it was the greatest thing.

If I had more brain power and capacity I would have stayed around and bought more stuff. I knew I wanted to buy this one company.

What had happened was that all of these credit companies had gone and taken ownership of these broken companies; they had secured rights in the company. It is called a UCC 1 filing. When you have a UCC 1 you have the keys to the castle, you own everything; IP and the whole freaking thing. They just shot these companies down, but they wanted something in return, so they would try to sell them at these auctions.

I just went in there and made a credit bid, which means I said, “I will take on the debt for this company personally.” I don’t remember how old I was, maybe 31, and I was taking on $3.2M in debt to own this company. I figured I would do whatever I could to build it up.