The family of a deceased early Salesforce investor discovered they still owned the shares — and they're worth a fortune (CRM)

Marc Benioff

Pat McGovern, a tech media tycoon, was one of the earliest investors in Salesforce, backing the company when traditional venture capitalists wouldn't.
McGovern bought an undisclosed number of shares in 1999 for $1.75 apiece, as part of a $13.17 million funding round.
He never sold any of the shares, not even during Salesforce's initial public offering, years earlier. By the time McGovern died in 2014, the shares' value had grown by 3,200%.
His family reached out to Salesforce CEO Marc Benioff after McGovern — and after they found the unsold shares.

When Salesforce first launched in 1999, venture capitalists ignored the company.

They wouldn't invest, even though many of them were friends with Marc Benioff, the company's charismatic founder and CEO who had been a rising star at Oracle. But a chance meeting with a wealthy tech media pioneer changed everything for Benioff and his company.

As Benioff recounted to me when I interviewed him on stage at the company's TrailHeaDX developer's conference last week in San Francisco, he ran into Pat McGovern at the airport. McGovern was the founder of IDG, publisher of a collection of computer trade magazines, including Computerworld, PC World, and Network World, and the the owner of market research firm IDC. McGovern had been doing a lot of investing at the time, mostly in China.

The two men talked before boarding a plane. Benioff enthusiastically described his new company, as founders tend to do. McGovern liked what he heard and agreed to invest on the spot, Benioff said.

The investment ended up being a key piece of a $62 million funding round for Salesforce, all of which came from private investors.

"That kind of thing is really, I think, how we were able to make it happen," Benioff recalled. "And I think we were lucky to be able to find those people. Because the traditional funding route was not happening for us."

Patrick and Lore Harp McGovern Salesforce went public in 2004 and many of those early investors cashed out at a handsome profit. But McGovern, who died in 2014, wasn't one of them.

"The cool thing is that I heard from Pat McGovern's family that he bought the stock, and he never sold any of it, and they found it," Benioff said.

"So it was a very good return," Benioff laughed, without getting into any specific numbers.

We did some digging and although we don't know how many shares McGovern bought, according to Pitchbook, a database that tracks such info, McGovern was part of a $13.17 million round in December, 1999.

Salesforce sold just over 7.5 million shares at $1.75 a share to a handful of people in that round including Benioff's old boss, Oracle founder Larry Ellison (who sold his shares in the IPO) and another tech media pioneer, CNET founder Halsey Minor.

Doing a little back-of-envelope math, we know that in March 2014, Salesforce's shares were trading at around $57. That's about a 3,200% increase over that initial $1.75.

So if McGovern had made a modest $175,000 investment in Salesforce (100,000 shares), they would have been worth $5.7 million by then. If he made a more sizeable $1 million investment (571,428 shares), the family would have stumbled upon $32.6 million in March, 2014.

And if the family still owns them, however many they are, those shares would have doubled again in value.

A good return indeed.

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