Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – Some advice to venture capitalists seeking good investments: When you find one, act fast.
In the case of Raleigh-based Southern Capitol Ventures, quick reaction to a term sheet landed the early-stage focused firm a possibly very profitable investment in Maryland-based WeddingWire.
So says Joe Holland, chief financial officer at the startup.
“While we spoke with other firms, SCV moved with such speed that we focused exclusively on SCV,” Holland told WRAL Tech Wire.
“From first call to signing, it took three weeks.”
In the venture world where quibbling over dots on “I”s can scuttle deals, the SCV-WeddingWire deal announced last week counts as a whirlwind courtship.
But this deal required more than quick reaction. As Jason Caplain of SCV spelled out in detail on Monday, the investors and the target company’s principals had grown to know each other over several years.
“The founders of WeddingWire met Jason five years ago when the company was just starting out,” Holland explained. “Jason and SCV have been great friends of WeddingWire since then, offering guidance and introductions as the business has grown.”
Did you read that, VCs?
Did you catch that, entrepreneurs?
The wining and dining, meetings and conference calls that lead to deals often come after courtships that start through references or mutual contacts. But in the case of WeddingWire, its founder attended an event put on by SCV designed specifically to produce this end result: a deal. SCV hosted a “meet and greet,” the entrepreneur carved time out of his schedule to attend, and a relationship was born.
But SCV offered more than money, including free advice and counsel. That attitude certainly influenced WeddingWire.
“We like to say that given its size, SCV punches above its weight in its ability to help entrepreneurs,” Holland said.
And the result?
“When it came time to raise capital, SCV was our first call.”
WeddingWire had decided to make an acquisition and needed funding, Holland explained. The company had grown quickly organically but needed more cash.
Now, with SVC on board, WeddingWire is stepping up growth with plans to increase its staff by a third to 150 over the next year. They will be hiring in sales, marketing and product development, Holland said.
“WeddingWire is a marketplace that connects local merchants with engaged couples,” he explained. “We have focused on providing value for both sides in this marketplace.
“For merchants, we’ve created the ability to reach couples and increase bookings, network with other merchants, and utilize tools to increase their online presence.
“For couples, we’ve created an easy way to find and vet merchants (with the largest repository of local reviews in this market) and plan their weddings (with a leading suite of online planning tools like checklists, budget tools, etc.).
“As we’ve built the business, we remind ourselves that we are a small business helping other small businesses succeed.”
Helping them meet those goals is their venture partner.
(Note: Capitol Broadcasting, parent company of WRAL Tech Wire, is an investor in Southern Capitol Ventures.)
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