In January, the legendary Durham startup ReverbNation announced publicly it had spun off a 21-person division into a startup that’s already turning a profit. If that wasn’t surprising, then the nature of the company might have been—called AdWerx, its first product is an online advertising tool for real estate agents.
ReverbNation has built a global client base for its software that helps bands and musicians grow their followings, licensing revenue and album and ticket sales online. It employs 85 people (mostly) in downtown Durham, and in 2013, reported $17.5 million in annual revenue, representing 447 percent growth since 2010.
The link between the two businesses might seem murky, but if you know anything about the history of ReverbNation, and the strategy and drive of the two men behind it, then the creation and takeoff of AdWerx makes perfect sense.
It isn’t often that a startup is incubated within a startup in the Triangle. In most cases, executives leave a successful company to start a new one—Art.com execs left to start Canvas On Demand, Bronto Software leaders left to form Argyle Social (and then RevBoss). But either case is important for growing a vibrant startup community. Startups need to be successful enough to churn out capable entrepreneurs to start new companies and create new jobs.
I only recently had the chance to meet ReverbNation and AdWerx founders Mike Doernberg and Jed Carlson and hear their story. And I quickly recognized the one downside of the spinoff—they aren’t side-by-side building a company every day.
Though they met only months before ReverbNation was formed in 2006, it’s clear the men’s relationship is as much family as co-founders. Perhaps that helps to explain how they’ve successfully built and led two companies in one, and how they convinced investors to take a bet on both.
For the complete story, visit ExitEvent at: http://exitevent.com/article/how-reverbnation-built-a-startup-within-a-startup-150205
