Never Fail

023-C95A-P

Arthur M. Blank Center for Entrepreneurship

Printed: 3/24/99

Babson Park, MA Phone: 781-239-4420 02457-0310 Fax: 781-239-4178 URL: http://www.babson.edu/eship

Neverfail Computing

Thanksgiving Weekend, 1994 Tim Delaney, the founder and CEO of Neverfail Computing, (a provider of fault-tolerant hardware systems), was with his wife and child at home, but he was preoccupied with events across town where his CFO and partner, Ted Jones, was negotiating for venture capital. Tim asked Ted to handle the negotiations that weekend, but it was hard to stay away. At stake were the terms and covenants that would bind Neverfail to its venture partners. Sales in October and November were awful, and they needed cash soon or things could get messy. Tim Delaney Tim, the oldest of four children, was raised in a San Francisco suburb. He graduated from high school in 1980, and spent a year performing manual labor in an industrial factory before attending college. His experience with physical labor steeled his determination to go to college and get a job where he would be paid for thinking. Tim graduated in 1988 from Bessemer College in Hillsborough, California. He majored in entrepreneurship and marketing. As part of his education, Tim and a classmate, Dan Hopkins, developed a business plan in Professor Ditchin’s entrepreneurship class and submitted it to the Bessemer College Business Plan Contest. They won top honors and the $5,000 cash prize. Tim was introduced to the computer industry during a senior-year marketing class assignment, when he accompanied Bill Deane on a sales call for R&A Computing. R&A Computing, then a $50 million computer component reseller, sold physical storage for large computers. During that meeting, Bill convinced the customer to trade 64MB of IBM physical memory for 128MB of “generic” R&A Computing physical memory. Essentially, Bill bartered the R&A computer board for the IBM board. The manufacturing cost of R&A’s 128MB board was about...