By Tom Ballard, Chief Alliance Officer, PYA
“We decided nearly two years ago to throw gas on the fire and go out and raise money,” Chris Van Beke, Co-Founder and Chief Executive Officer (CEO) of Vendor Registry, told us in a recent interview.
Fast forward to the end of 2016, and the Knoxville-based company has successfully closed on an oversubscribed seed stage round of $1.8 million.
“We secured our first money in March of 2016 and finished at the end of 2016,” Van Beke says. The new funding will allow the company that links local governments and vendors with a streamlined purchasing process to accelerate its growth.
Founded in 2012, the company now serves more than 200 local governments in 20 states and has more than 25,000 vendors in its database. Van Beke says there are about 100 governmental clients in Tennessee with the largest being the City of Knoxville.
“This seed round allows us to scale, mostly for sales, marketing and software development,” the CEO says, adding that Vendor Registry is actively seeking applicants for those slots.
Van Beke is particularly proud of the company that, like any start-up, has faced some ups and downs in its first five years.
“We have a great team that has done an amazing job with limited resources,” he says. Now, instead of the linear growth which it has experienced, Van Beke hopes the new investments will allow it to scale faster.
The company had a record-breaking December. “Every month, we’re continuing to break new records,” he says.
The seed round came from individual investors and five funds, two of which are East Tennessee-based. They are The Lighthouse Fund and the Chattanooga Renaissance Fund. The others are Venture South out of Greenville, SC; Allos Alpha from Cincinnati; and Cantos Ventures based in San Francisco.
“We’re really excited to have institutional investors on board,” Van Beke said. “The caliber of investors like these gets others to feel comfortable in making investments. It’s the snowball effect.”
Vendor Registry was a participant in the inaugural cohort of Launch Tennessee’s “The TENN” master accelerator and placed first in the finale as noted in this teknovation.biz article.
“We initially started thinking about fundraising in 2014 during ‘The TENN’ program,” Van Beke said. One of the key components of the months-long activity is a series of trips to California and New York City to meet venture capitalists.
With a successful seed stage round under his belt, we asked Van Beke for lessons that he learned and was willing to share with others.
“It’s going to take you longer than you think,” he said. Vendor Registry secured its first million in about six months, and it took another six months to close the round.
Van Beke also noted the importance of asking a start-up’s investors to make introductions to other angels or funds. He recalls asking an angel for the names of other investors he would like to see Vendor Registry secure before that angel invested. The individual named three and introduced Van Beke to two. In the end, Vendor Registry secured investments from all three.
“Create a sense of urgency, setting deadlines to secure decisions,” Van Beke also advised in relation to a start-up’s funding targets. “Most importantly, never stop filling your pipeline. You’re never there until the last check is cashed. It takes discipline to keep at it.”
Looking to the future, Van Beke is very optimistic about the sector where Vendor Registry is focused.
“Local government budgets are improving with more dollars being invested in IT systems and software,” he says. “The space is becoming more attractive.”
To illustrate the latter point, Van Beke cited the August 2016 “ELGL Choice Awards” that ranked Vendor Registry fourth among the top 50 companies serving local governments.
“We’re getting a lot of interest from non-coastal venture capitalists,” he says. That will prove very beneficial when the company goes for a Series A round.