In 1999 James Limm and John Percival were running a Visual Basic website using Infopop's UBB.classic forum software on VB Forums. As their site grew, they noticed that their software, written in Perl using a flat-file database, could not always cope with the number of users they had. In February 2000, the two decided that it would be better to write their own solution as both were unfamiliar with the software's code and thus unable to optimize it. Initially, it was designed solely as a rewrite of UBB, in PHP using MySQL, and was meant only for their own forum. Other UBB owners expressed interest in the solution, and they offered to sell it to Infopop, but their proposal was rejected. As there was still a demand for the software, Limm and Percival created Jelsoft and released their work as a paid solution, called vBulletin 1.
After subsequent minor releases of their software, the two decided to start working on a new version that would be more than a rewrite of UBB: they wanted to turn their software into a competitive solution for forums. Rewriting the entirety of the product, vBulletin 2 commenced development. Shortly thereafter, Limm became the managing director and Percival the lead developer. To help with the scale of the project, two additional developers, Freddie Bingham and Mike Sullivan were brought on to help finish vBulletin 2. Kier Darby was brought on during the vBulletin 2.0 Beta phase to further development. The release of vBulletin 2 proved to be very successful and is what made vBulletin popular.
In December 2002, vBulletin 3 was beginning development. Percival decided to step down as lead developer and product manager, turning his roles over to Kier Darby. vBulletin 3 was under development for a lengthy period of time—nearly two years—as it went from a mere improvement on vBulletin 2 to a complete rewrite. However, version 3 was finally released in March 2004. In 2005, vBulletin 3.5 was released that addressed some of the shortcomings of 3.0 (discussed later on). vBulletin 3.6 was released as a stable version on August 3, 2006.
On July 4, 2007 Jelsoft posted a topic on their support forum stating that Jelsoft had been taken over by Internet Brands Inc. Which promised significant investment in to the company so that they could continue to develop the software in the cut throat world of business.