Firm Uses E-Mail as VC for Struggling Dot-ComsE-mail marketer Opt In Inc. has started a service called venture e-mail that seeks to help failing dot-com companies get back on their feet through e-mail marketing.
Opt In Inc., Boca Raton, FL, models the VE program, as president/CEO Steve Hardigree calls it, on the traditional venture capital model. In exchange for an equity stake in the company, Opt In guarantees a certain amount of new business through e-mail marketing. It accomplishes this without pumping any capital into the failing company.
Ironically, Opt In Inc. has never accepted venture capital funds for its own business.
"Most people who threw venture capital money into the dot-com business got killed," Hardigree said. "But companies need customers. We know that e-mail equal sales."
Failing companies should view e-mail marketing - and Opt In Inc.'s VE program -- as a last resort, he said.
"Many companies have good products but don't have marketing," he said. "We go to companies and guarantee them customers. We take a percentage of the company."
Hardigree said that the equity stake varies. For example, Magazine Rewards, the company's first VE program participant, is now 70 percent owned by Opt In Inc. The company offers deep discounts on magazine subscriptions through its www.magazinerewards.com Web site.
Opt In targets companies with products that appeal to a wide variety of the public. For the VE program to be effective, Hardigree said, the company must let Opt In evaluate and overhaul the marketing program, if necessary.
"We look at one-size-fits-all companies," he said. "We tell them, 'If we bring you a certain amount of business, we want a certain amount of equity in your company.' "
Opt In has about 47 million records in its database, he said. Since the program works only with companies that can have a wide appeal, most, if not all, of the names are available to VE participants, he said.
"We primarily look for a good business model," he said. "I'm not trying to buy a dud and make a healthy company out of it. If the company has a good business model and ran out of venture capital, we want them to call us."