Adzerk Founder and CEO James Avery is the kind of guy you just sort of immediately feel a kinship with. It’s not because he’s filthy rich, although he is, or because he’s quick to give you a sticker, he’s got tons of them, it’s the fact that he’s a straight talker who always happens to know exactly what he’s talking about.
Example: At the recent Tech Jobs Under the Big Top job fair, when a dozen RTP startups got up on stage to present to roughly 250 job seekers, Avery showed a minute or two of the Startup Guys video, which then faded to black with the caption:
“Not all startups are full of ****.”
What Did He Just Say?
Huge laugh from the crowd, but this is exactly what Avery is about. It’s a joke, right? Or is it? I dig that. Plus he hired someone from that event, so obviously at least one other person dug it as well.
I feel a kinship with Avery because we took a similar path. We both got out of the corporate technology world and started one-person consulting practices that grew over time into larger and more successful consulting practices. Neither of us were ultimately happy, no wait, neither of us were fulfilled. Something was missing.
It was the startup thing.
So while I started shifting the focus of my practice to the startup world, Avery went out and started another company.
More specifically, he bought an ad network in 2007 which was bare bones, and he replaced it and built on top of it. In the beginning, he was only using it for himself, but then he started another vertical ad network and modified the software to run both of them, The Lounge and Ruby Row.
When he tried to start a third ad network, he realized that the software itself was a more compelling play than creating and running ad networks.
Now, there’s a long history of companies in the ad-tech industry trying to run networks and sell software at the same time, and usually the software part ends up becoming the ugly stepchild. You just can’t do both and have both be successful. So in December 2010, he sold off one of the ad networks and focused on the stepchild.
The RTP Startup Playbook
An office in American Underground came first. And when the Underground announced via Twitter that Adzerk was moving in, Avery got a tweet asking if he was hiring.
Now he had space, an engineer, and a little bit of runway. So when he saw how much of an impact those dollars made, he knew he needed more.
He ran the gamut of the RTP support structure, including the aforementioned job fair, the CED Venture Conference (although he knew everyone there), TechMedia’s Internet Summit (where he met the guys from Argyle, Spring Metrics, and JobKatch), Launch Durham (although he launched at Calacanis’ LAUNCH Conference), and even though he was too far along for Startup Stampede or Launchbox, he eventually hired three former Launchboxers.
Most every ad server has two fundamental problems. It’s likely built on 90s technology and it’s probably run by a big media company.
Adzerk is independent and based on current generation technology. And they innovate. Right now they have what Avery calls an “incrementally better ad server.” It’s faster, the ads get served asynchronously, stats are real time, all cloud based, scales quickly.
Some publishers care a lot about this, others don’t. So Adzerk has carved out a market where those features are differentiators. But Avery knows that having an “incrementally better” mousetrap is not enough.
So Adzerk is going after bigger game. They’re bucking the traditional model – enterprise software, contracts, etc. Thus, the pitch becomes “let’s change the way ad-serving works.”
Eight months go by. $650K seed round.
This is where the story gets a little funny, because out of that $650K Avery finished raising this month, exactly $25,000, or just a little under 4%, came from in-state.
Avery says he was naïve as every other first-time fundraiser, figuring he’d go to the people he knew, find the right ones at the right time, and get just what he needed to get to the next level. It took about a month before he realized he needed to talk to anyone and everyone who would pick up the phone. So he did.
That says two things. But neither of them is a soap-boxy “Local investors need to invest in more local companies!”
Santa Claus. What?
I’ve got a great analogy for this. This is like asking Santa Claus to quit bringing a bunch of presents every Christmas and instead just show up with one present on the 25th of each month.
I know. That one came to me in a traffic jam.
The frustrating thing about the RTP investment region is that we’ve got a bunch of investors and a bunch of startups but 95% of the time the goals of one do not match the intentions of the other, and vice versa.
When Avery and I discussed this, the lament wasn’t “Man, it would be cool if the local VCs would start investing their big bucks in early stage companies,” it was more like “Man, it would be cool if we had some apparatus here by which several early-stage companies could raise $100K on a standard term sheet.”
That’s the first thing. The second thing is a lot more hopeful.
Startup Investing Enters the 2000s
Adzerk’s path to funding is not unique. There have been a number of investments here lately that have involved money from the west coast, New York, pretty much everywhere, and it’s getting easier. During his fundraise, Avery left the area twice, and one of those trips was to shake hands with the lead before they signed the term sheet.
It’s a good tale, a no-BS founder product company with customers and revenue operates within a robustly-evolving support system to land seed-stage money and swing for the fences
Rinse and repeat, people.
Joe Procopio heads up product engineering for sports media startup StatSheet . He also owns consulting firm Intrepid Company (http://IntrepidCompany.com) and creative network Intrepid Media and runs the startup social ExitEvent (http://ExitEvent.com). Joe can be reached via Twitter @jproco and read at joeprocopio.com.
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Tags: Adzerk, Adzerk seed round, Amercian Underground, CED Venture Conference, Durham, Internet Summit, James Avery, Joe Procopio, NC, RTP, RTP Startup Playbook, Startup Guys, Startups, Tech Jobs Under the Big Top