There can be a benefit to waiting to raise money.
Like a $1.1 million first round of venture capital when the product is right, the customers are pleased, the team is productive and the company is profitable.
That was the news at Durham-based RevBoss Thursday. Its first outside investment is being led by Durham and Silicon Valley-based Sovereign’s Capital with participation by a trio of local angel investors – Robbie Allen, who sold his startup Automated Insights earlier this year, Bruce Boehm, who invested in RevBoss founder Eric Boggs’ last startup Argyle Social, and Alston Gardner, a local partner with Atlanta-based Fulcrum Ventures.
According to Boggs, his company wasn’t a hard sell. It has 20 paying customers for a software-as-a-service product that generates viable sales leads using software, data and the remote task-oriented workforce employed by Durham startup CloudFactory, another Sovereign’s portfolio company. That’s after two years spent consulting with and understanding the needs of sales teams, and the last year building out a product around those learnings. An NC IDEA grant late last year helped fund the work.
But Boggs realized it might be time to scale faster in recent months, when one of his customers reached its 16th month using RevBoss to find and vet sales leads. After a few phone calls and in-person meetings locally, he’d closed the round.
“We were able to skip the $300-400,000 round because we built our company through customer revenue,” he says.
Echoes Henry Kaestner, a Sovereign’s Capital managing principal and co-founder of Raleigh-based Bandwidth: “While they are building a phenomenal software platform and have an unfair advantage in the way they have integrated with CloudFactory, they are going to succeed because they do a better job of understanding the customer’s issues – they look to delight the customer. It’s old fashioned, but ultimately, it’s what drew me to RevBoss and why we invested.”
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