Forty–five member Angel-led syndicate raises $2.8M for Boston’s ViralGains

ViralGains, a company with a mission to create authentic relationships between consumers and advertisers through online video, today announced that the company has raised $2.8 million of a $3.3 million round of funding.

The round was led by Hub Angels, with participation from 45 investors, including 500 Startups’ Dave McClure ($400K), Chicago-based Pallasite Ventures, Christopher Bissonnette ($100K), Boston’s Launch Capital, 500 Startups, and local Boston-based angels Ty Danco, Joe Caruso, Jay Batson ($10K), Ralph Wagner (Walnut), Ben Littauer (Hub),  and Semyon Dukach (Techstars). Other angels include Sheryl Schultz, Will Herman, Mark Carthy, Sergey Gribov, Ed Belove, Michael Mark, and Christine Tsai. In addition, rapper Nasir “Nas” Jones ($25K) joined the investment group.

ViralGains offers a video ad platform, named Praxis, that helps advertisers find targeted audiences for YouTube video content. High profile clients of ViralGains include Exxon, Nestlé, Showtime, Lexus, and State Farm.

ViralGains has worked with 15 Fortune 500 brands to date, as well as numerous advertising agencies, SMBs, and YouTube stars. ViralGains’ inventory includes native and mobile video units placed within premium websites, influencers, social games, and social networks. The ViralGains Praxis targets by 4,000 human attributes while using a recommendation engine to find viewers who are most interested in watching the advertiser’s video.

“This round is going to allow ViralGains to scale up our advertising technology platform to bring on more advertisers who can buy video ad placements from us, and more publishers who can create revenue from those ad placements.” said ViralGains CEO Jay Singh. “Viral video is having a broad positive impact on the global culture and ViralGains is making it easy for advertisers of all sizes to drive views, shares, and conversations to their video." The company is using the funds to move into new markets, including Southern California, New York City and Chicago, and to grow the demand and supply sides of its business.

Asked how they assembled such a large investment group, Hub Angels David Verrill credits the power of syndication and "a CEO who has worked his ass off  presenting the company to potential investors."

ABOUT VIRALGAINS

ViralGains is building the first global exchange for viral video. Since 2012, ViralGains has been on a mission to create authentic relationships between advertisers and customers through online video. ViralGains works with ad agencies, brands, and YouTube stars to get their videos watched and shared by the right audiences. Praxis, ViralGains’ video ad platform, integrates targeting by thousands of human attributes, ad placements on native and social environments, and real time reporting capability to generate positive returns on marketing investment. ViralGains is headquarted in Boston, MA and is actively expanding to New York, Chicago, and Southern California. More information is available at www.ViralGains.com

Jay Singh, the founder and CEO of ViralGains, had previously, at the age of 19, founded ViralMS, with Dan Levin. Before committing to ViralGains full time, Jay went to work at Experience.com as the Demand Development Manager in order to gain valuable experience to make ViralGains a success. It was here that he met Kate Willet who would eventually join ViralGains as the VP of Business Development. After a year, Jay returned to ViralGains and brought Kate along with him. They secured office space at the Cambridge Innovation Center, giving them the structure to turn their idea into a valid business.

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Patent Trolls and the Billy Goats Gruff

Last week, the National Venture Capital Association released a study indicating one in three startups faces legal accusations of patent infringement. 

Earlier today, Mass. Attorney General Martha Coakley visited the offices of mobile payments company LevelUp, in Boston, where founder and CEO Seth Priebatsch told her that "patent troll" lawsuits are diverting capital that could be used for business growth. He said the bigger a company gets, and the more recognition they have in the press, the more trolls start to descend upon them. Unless the law changes, it’s something he will be dealing with forever. “We will win each individual case, but your expenses now become health care, salary, real estate, and dealing with patent trolls,” he said, according to the Boston Business Journal.

Coakley, who went to LevelUp’s offices to speak to employees, likened the problem with patent trolls to the children’s fairy tale about the “Billy Goats Gruff,” crossing the bridge with a troll underneath. “It’s a barrier keeping companies from going where they want to go,” she said. “The moral of the story is, trolls are bad. We shouldn’t allow them in fairy tales, and we shouldn’t allow them in real life.”

Coakely is looking at existing state laws to see how she can help businesses keep trolls at bay. She also pledged to determine whether other legal remedies are available to technology companies like LevelUp.

@LevelUp, which spun off from an earlier company, SCVNGR , is backed by Boston Angel Joe Caruso and a number of VC funds.

If you would like to join with other Angel and VC Billygoats  writing to congress about this issue, you can find a link right here. 

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Twitter Acquires Crashlytics while, at 364% IRR, Angels and VCs Sing their Glorious Strain

While the actual numbers remain a widely held secret, Gregory T. Huang of Xconomy states that Twitter just paid  over $100 million in cash and stock  for Cambridge based Crashlytics, which provides bug fixing tools for mobile developers. This appears to be Twitters largest purchase to date.

“Crashlytics  raised about $6 million from Flybridge Capital Partners, Baseline Ventures, and a lineup of angel investors who are household names in Boston tech,”  says Huang.   “I’m hearing that those angels got a higher-than-10x return on their investment, plus some of their original money back (because the company apparently didn’t spend it).” We are unsure of the actual closing dates, but seed round to exit appears to be about 16 months.

Among seed investors was the Common Angels. "We were very fortunate to back two world-class founders, Jeff Seibert and Wayne Chang,” says Managing Director Chris Sheehan.  “Jeff, Wayne and the Crashlytics team built a very successful crash reporting solution used in many of the top iOS apps today. And while the purchase price was not disclosed, this was a great outcome for the team and investors. We wish the team all the very best on the next part of their amazing journey."

Other Angels participating in Crashlytics’ funding were Joe Caruso, managing partner at Bantam Group, member of the eCoast and Common Angels; Jennifer Lum, Cofounder @Adelphic Mobile, Mentor @TechStars; Ty Danco, founder of eSecLending, member of North Country Angels and Anges Quebec; David Chang, COO of @PayPal Media Network;  Lars Albright, co-founder of Quattro, now Apple iAds; and Roy Rodenstein Co-founder & CEO, SocMetrics, Co-founder HackerAngels.

Our recent post on M&A activity said it was a tough way for an angel to make a living.  Not true with an IRR of 364%.

And what do we hear from the Angels? “As an investor, I’m thrilled with the returns from the Crashlytics acquisition,” says Lum.