From Nine Rejections to Two IPOs with Babu Sivadasan

Babu Sivadasan was rejected by nine firms before he landed his first job out of college. That single hard-won opportunity became, in his words, the best deal he ever did. It also planted a conviction that would carry him through two public company journeys. Babu is a serial entrepreneur and engineer who co-founded stamps.com and later co-founded Envestnet, two category-defining platforms in commerce and wealth management technology. Today he's building Jiffy AI, a company applying artificial intelligence to how software itself gets created and deployed.

Babu's path from a struggling first-time job seeker to a two-time public company builder is not a straight line, and he's the first to admit it. Whether you're thinking about raising capital, wondering whether you need a technical co-founder, or trying to figure out how AI fits into your business, this conversation offers a founder's-eye view of three very different eras of technology, told by someone who lived through all of them.

NINE REJECTIONS AND A CONVICTION TO CREATE JOBS, NOT TAKE THEM

Growing up in Kerala, in southern India, Babu never imagined becoming a serial entrepreneur. He was drawn to engineering as a kid, briefly considered medicine, and eventually landed on the engineering profession because he loved building things. His first deal, as he describes it, was simply getting hired. He was rejected by nine firms before his last opportunity out of college finally worked out.

That early struggle left a mark. By the time Babu actually started working, he had developed what he calls a deep conviction that he wasn't meant to just take a job. He was meant to create jobs, for himself first, and ideally for many others along the way. That conviction shaped every venture that followed.

A PATENT, A DEMO IN A SUITCASE, AND THE BIRTH OF STAMPS.COM

Around 1995 and 1996, Babu and a small team of six worked on a side project and a patent application built around a simple idea. Any piece of software could be converted into a subscription product through usage-based metering. As long as you paid, the software worked. The moment you stopped, it didn't. Looking for an application for that patent, the team landed on the idea that became stamps.com, originally named Stamp Master before the dot-com branding took over.

Fundraising was difficult. Babu admits he had never raised money before and didn't know how to talk to an investor. The company was selected to participate in a program with the U.S. Postal Service, standing out because it was the only participant with a software-based solution rather than a hardware dongle. Before one crucial demonstration, Babu bought a computer, installed the software, and packed it in his suitcase for a flight to Burbank. By the time he landed, the computer was damaged, but he managed to salvage the software and get through the demo anyway.

WHY SOFTWARE COMPANIES REJECTED THE SUBSCRIPTION MODEL

Long before recurring revenue became the default way to think about software, Babu's team pitched a subscription model to established software companies and got turned down. Their reasoning was that they were already effectively running a subscription business, charging upfront and then again for annual upgrades, and saw the metered model as investors asking them to take a cut. It's a pattern Corey has seen play out in other industries too, including health clubs in the nineties, where the shift from annual contracts to monthly recurring billing initially met resistance before proving out through improved retention.

THE FIVE PERCENT THAT MAKE IT TO IPO

Stamps.com became a public company, but Babu is careful not to overstate his own foresight. He describes it as being at the right place at the right time, while acknowledging that plenty of other companies had the same timing without the same outcome. He puts the honest odds in context. Success rates for startups reaching an IPO, he notes, are less than 5 percent. It's a reminder of just how rare the outcome he's now experienced twice actually is.

AN ACCIDENTAL PIVOT INTO WEALTH MANAGEMENT

After stamps.com, Babu and his founding team tried to apply the same subscription technology to video and audio distribution, essentially attempting a Netflix-style, on-demand streaming service years before the market or the technology was ready. The dot-com crash ended that effort before it could gain traction. Wealth management came next almost by accident, through a friend who connected Babu with a small team, including Siva Suresh, Karen McHugh, and Suresh Kulajal, who were exploring how to bring wealth management to the cloud.

THE MERGER THAT BECAME ENVESTNET

In 2004, that team merged with a competing firm founded by Jared Bergman. Babu describes the combination as one plus one equaling three, with complementary strengths on both sides: strong operating infrastructure and technology on his side, and deep relationships with advisors on the other. A Silicon Valley team called Oberon joined the mix as well. Babu credits leader Jack Perkins as a major reason the combination worked as well as it did. The merged company became Envestnet.

UNIFYING A FRAGMENTED ADVISOR TECH STACK

Babu explains Envestnet's mission in plain terms: giving financial advisors freedom. In the earliest days, he remembers visiting an advisor's office and seeing stacks of printed paper everywhere, the byproduct of disconnected desktop tools for risk profiling, asset allocation, product research, and portfolio management. Envestnet's bet was to move all of that to the cloud and deeply integrate it into a single continuum: plan, invest, manage, and report. An advisor could subscribe to one platform, connect it to a custodian, and manage a client relationship from first meeting through ongoing reporting.

TWENTY YEARS, AN IPO, AND A COMMITMENT KEPT

Babu made a personal commitment to stay in wealth management for the long haul, a deliberate contrast to how quickly stamps.com had run its course. Envestnet experienced tremendous growth between 2005 and 2009. A planned IPO in 2008 was derailed by the financial crisis, and the company ultimately went public in 2010. Babu held multiple roles over the years, including leading engineering and product, before stepping back around his 20th year anniversary, as he had originally planned.

BUILDING JIFFY AI ON A NATURAL LANGUAGE PATENT

Babu's interest in artificial intelligence dates back to a college project building a neural model for pattern recognition, including work with the Indian Space Agency on detecting circuit faults. He stayed convinced that natural language would eventually replace traditional programming as the way software gets built. By 2017, with AI technology finally mature enough for commercial use, Babu committed to it full time. Jiffy AI has since secured patents on using natural language to build and deploy software, and Babu describes the company's core focus as unifying scattered advisor data, across financial planning tools, custodians, and CRM systems, into a single source of truth that can power a better client experience. The company is Series B funded, having raised about $61 million to date.

FREEDOM AS JOB CREATION

When Corey asked Babu what freedom means to him, his answer circled back to where the conversation started. Freedom, he said, is the ability to pursue whatever gives you happiness without anything standing in the way of that opportunity. For Babu specifically, that has always meant looking at any new venture through the lens of how many jobs it creates. It's a fitting close for someone whose entire career began with the sting of nine rejections and a decision to start creating opportunities instead of waiting for one.

Babu's journey echoes themes Corey has explored with other guests. Episode 328 with Richard Manders traces a similar path from a curious, engineering-minded kid to a founder who built and scaled companies through private equity backing. Episode 370 with Gerry Hays digs into how AI and shrinking startup costs are reshaping who gets to raise capital, a theme that runs through Babu's own transition from the mainframe and cloud eras into the AI era. And Episode 350 with Tom Dillon explores when founders should look beyond venture capital entirely, a question Babu wrestled with directly in the earliest, cash-strapped days of stamps.com.

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Listen to the full episode of DealQuest with Babu Sivadasan to hear the entire conversation.

https://www.coreykupfer.com/dealquest-podcast/

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FOR MORE ON BABU SIVADASAN
https://www.jiffy.ai

FOR MORE ON COREY KUPFER
https://www.linkedin.com/in/coreykupfer/ https://www.coreykupfer.com/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

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