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Local Software Development Company SuperSolutions Makes an $11.4 Million Step Toward Greater Success; Is Milestone Growth Fund’s Second Biggest Deal MINNEAPOLIS, MN (March 5, 2004)— Milestone Growth Fund, the nonprofit venture capital fund created to facilitate and accelerate the formation of capital in ethnic minority businesses throughout Minnesota, recognized SuperSolutions Corporation (SSC) as a successful “milestone” when SSC founder and CEO Darshan Karki first approached the fund for financing. In the end, both SSC and Milestone faired very well—$11.4 million and growth potential for SSC and about a 40% ROI for Milestone. When SSC was acquired by the international technology company i-flex in January, it had already tapped into a growing niche created by consumer lending firms moving from point product software applications to more universal lending platforms. Developed to manage the lending process from origination through servicing and collections, SSC’s Daybreak Lending Suite is a universal lending platform that not only improves productivity but saves clients money. Top tier clients such as Harley Davidson Financial Services, Inc., Mitsubishi Motors Credit, Hyundai Motor Finance, U. S. Small Business Administration, Onyx Acceptance Corporation, and Crescent Bank & Trust already use Daybreak. But SSC didn’t reach success overnight and the journey wasn’t always easy. Karki started his company in 1989 after he and three colleagues developed a revolutionary UNIX-based Oracle system for client/server computing. Such ingenuity led to SSC’s ability to deliver enterprise-wide software applications and the eventual creation of Daybreak. Early in 2000, SSC’s outlook was incredibly positive.
Daybreak was a new product and SSC had a dozen new clients,
a beefed-up sales force, two newly-hired professional executives,
and sales of about $5 million. With the fast success, SSC
wanted to attract significant amounts of venture capital
to Impressed with Karki’s commitment, technical staff, and excellent clients, Milestone extended a $1 million long-term loan with warrants to SSC. “When we first learned about SuperSolutions, we knew it would one day be a ‘milestone.’ They have a good product—perhaps the best in the market—with a strong niche and excellent clients,” said Guerrero-Anderson. Karki then became Chairman of the SSC Board and let his experienced executives run the company. With Milestone’s help, SSC attracted an impressive board of directors to help Karki attract the venture capital he sought. Unfortunately in 2001, 9/11 rocked the nation and SSC’s clients. Some went out of business. Sales declined and SSC faced huge losses. With the borrowed money nearly gone in 2002, Karki decided to save his company by reducing expenses, cutting staff, and assuming the role of CEO and sales person. According to Guerrero-Anderson, “Darshan has been and continues to be a very committed owner, willing to make sacrifices for the success of his company. For many months he drew no salary and he’s a good leader. Even when SSC was going through its worst time, staff was committed to the company.” By 2003 revenue had grown significantly—almost to $6 million—and Karki was ready to find a partner; a major IT firm in its industry. Enter i-flex and an acquisition that greatly enhances the growth prospects for SSC, which is now a 100%-owned subsidiary of i-flex. The existing SSC management team continues to run the business. Upon the sale of SSC to i-flex, Milestone received about 40% return on investment including its principal, interest and 1.3 times the principal. “We are very pleased with SuperSolution’s success and Karki’s ability to stay focused during even the most difficult times for the company,” commented Guerrero-Anderson. Closing the SSC deal is the second biggest deal in Milestone’s history, the first being in 1998 when client Z-Spanish Radio Network, a California-based, Spanish radio network merged with another company to become Entravision and went public. Milestone was one of the original investors and made more than 40% ROI. In addition to the initial financing Milestone was there to help SSC with additional funding and access to legal counsel when the company was facing difficult times. Milestone also assisted in positioning the company as SSC began looking for a partner including introducing Karki to experienced, influential professionals in the financing services industry, attracting two national venture capital funds to make additional investments in SSC (Milestone secured $1.5 million) if needed, expanding Karki’s network, talking with angel investors, and showing its 100% support of the company when potential customers became concerned about SSC’s financial situation. About Milestone Growth Fund About SuperSolutions Corporation About i-flex The company has a strong global reach, with sales, marketing and support presence covering over 20 locations including three subsidiaries (US, Netherlands, and Singapore). In addition, i-flex is represented in over 55 countries through more than 34 corporate business partners. i-flex also has strong alliance and implementation relationships with industry leaders Hewlett Packard, IBM, Intel, Microsoft, Oracle, and Sun Microsystems. Website: www.iflexsolutions.com For more information, please contact:
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