Filterworx, a Raleigh-based seller of software that blocks explicit sexual imagery and text from the Internet, expects to close a $1.5 million second round of venture capital early next month.

Filterworx Chief Executive Officer and President Bryant Walton tells LocalTechWire the company will use the money to ramp of marketing of its BAIR filtering system.

Filterworx has exclusive national marketing rights to the product, which is made by Exotrope of Elmira, NY. The BAIR stands for Basic Artificial Intelligence Routine.

Walton says the year-old company used a combination of private investment and bootstrapping to get to this point, but he is staying mum about the amount of previous investments.

Filterworx plans a national email and broadcast advertising campaign to market the product when it closes its second round, Walton says.

The company Web site lists statistics that indicate a need for the product such as:

“In a report released last summer by the University of New Hampshire’s Crimes Against Children Research Center, it was found that 19 percent of Internet users between the ages of 10-17 have received an unwanted sexual solicitation online. An additional 25 percent have received unwanted exposure to sexual content online.”

Walton says Filterworx sells the software as an application service provider for a monthly fee of $6.95. It markets primarily to home users. The software works with all Internet browsers and service providers except AOL, which offers its own parental controls but restricts the use of non-AOL products with its service.

Some overblocking occurs

In independent tests of a variety of Net filtering products, BAIR blocked more than 99 percent of sexually explicit material, more than 14 percent more than its rivals, Walton says. He notes, however, “It isn’t perfect. It has about a 3 percent overblock.”

That means it blocks some sites that are inoffensive, such as those requiring secure connections. “But you can turn it on and off,” Walton says of the password protected software.

Also, he explains, if a user thinks a site has been mistakenly blocked, he can click a link that sends it to Exotrope’s Elmira offices where someone eyeballs the site. If it’s inoffensive, it won’t be blocked again.

The company’s private investors are primarily retired “A-teamers who made a ton of money and are interested in investments that not only make good business sense but are also socially responsible,” Walton says.

A native of Augusta, Ga., Walton says funding issues led to his folding a previous company, Kidsneedus.com, based in Columbia, S.C., where he lives now. The Kidsneedus gig, a faith-based Internet service, also offered the BAIR filter. When that company folded, Walton talked with Exotrope about selling it through Filterworx.

His partner in the venture is Alexander Steele, VP of operations.

A successful strategy

One successful the strategy the company intends to continue to pursue is selling its BAIR product through affiliates, Walton says. “Affiliates can sign up in an easy ten-minute process.”

Affiliates put a link on their Web sites and receive a $1 revenue sharing fee monthly from every customer who signs up for the service through an affiliate link. Current affiliates include the Alliance for Children and Families, Networks Internet Services and Solutions, PA Powernet, Affinity Marketing Solutions, and the SC Law Enforcement Officers Association.

The company is particularly interested in affiliations with television stations, Walton says.

A nondisclosure agreement with Exotrope prevents Walton from revealing how many customers Filterworx has, but he says the eight-employee company expects to be profitable this year. It doesn’t plan any immediate move from its 4,000 square foot offices.