NeoScale Systems has gotten a money-fueled makeover: The storage security startup announced today that it has closed a $12 million second round of funding and hired a new president and CEO (see NeoScale Reels In $12M, CEO).
The round, which brings NeoScale's total funding to $25.5 million, was led by newcomer Sevin Rosen Funds. Also participating were previous investors Bay Partners and Lightspeed Venture Partners. NeoScale, founded in June 2000, is based in Milpitas, Calif. [Disclosure: Lightspeed Venture Partners is an investor in Light Reading Inc., which publishes Byte and Switch.]
In addition to its funding, NeoScale said that cofounder Aseem Vaid has vacated his CEO spot and moved to the position of chief technology officer. Taking over the management of the company is former Nishan Systems Inc. CEO John McGraw, who has been appointed president, CEO, and chairman. McGraw will remain on Nishan's board of directors.
Strategic Research Corp. analyst Michael Peterson says NeoScale's management changes make sense. "NeoScale is rounding out its management team with someone who has more experience," he says. "This is what most early-stage technology companies do. The founders move over."
While founders often bring cutting-edge technology to the table, they don't always have the business know-how or reputation to gain funding and keep the business afloat, Peterson says. "Funding is all about people. That's what you need for validation and credibility in the market now."