Sharing the Keys to the Marketing Kingdom
To our Valued Investors:
As we continue our long and prosperous journey through the pre-IPO universe, certain words and phrases tend to come about with a higher frequency than others. Naturally, we see way too many of the snazzy “buzzwords” like “disruptive”, “game-changing”, and “ecosystem”, and many others that have come to induce more eyerolls than excitement. Still, some of the words that keep popping up, while admittedly a bit buzzy, promote a subtler (and somehow more reassuring) aura of promising innovation. One of those words is “democratization” (or any of its forms). SoFi and Robinhood have democratized investing by allowing amateur traders to buy much smaller amounts of high-priced stocks through fractionalized shares. AirBnB democratizes the hospitality industry by permitting just about any homeowner to become a hotelier. Even we have been known to break out the term ourselves from time to time. The “About” section of our website proclaims that “Iron Edge VC has democratized the process of pre-IPO investments while providing much-needed liquidity for the original holders of preferred insider shares”. In other words, we allow individual investors to participate in the often vast benefits formerly reserved for large, deep-pocketed venture capital outfits.
The democratization component is one of the many things that has attracted us to an investment in San Francisco’s NextRoll, Inc. Founded in 2006 by Aaron Bell and Jared Kopf, NextRoll develops marketing and data technology software that is effective in accelerating growth for companies. Through an easy-to-use platform, NextRoll lets brands of all sizes create personalized advertising campaigns based on their own website data. This, in turn, enables NextRoll clients’ marketing departments to ensure maximum return on their online advertising campaigns. Employing advanced Artificial Intelligence (AI) coding, NextRoll maximizes the efficiency and effectiveness of its clients’ marketing efforts. First, the benefit of more than a decade of accumulated data is put to work and the focus is centered upon the kinds of techniques that have a track record of effectiveness. Then, campaigns are customized for individual clients. As NextRoll’s programs deploy promotional material for client companies within a wide range of outlets across the internet, they go to school on how a targeted audience reacts to the advertisements. The number of clicks on each ad is recorded, as is other useful information like duration of site visits, subsequent clicks, and, most importantly, which virtual pitches inspire the public to hit the “buy now” button. The more successful campaigns are pushed toward the front of the line and given more exposure, while the duds are retired. The mechanism is illustrated in graphic detail for the advertiser on an easy-to-understand dashboard, with charts and graphs that spell out the browsing behavior of every demographic whose patronage is being pursued.
NextRoll operates on two primary levels. AdRoll is the Business-to-Consumer (B2C) platform, the tool for merchants who wish to pull in public consumers. NextRoll’s Business-to-Business (B2B) offering is called RollWorks, and it turbocharges the sales departments for vendors who aim to supply other businesses with what they need. For instance, a company that prepares ready-to-eat prepackaged meals might have a business model that’s not geared toward selling to individual consumers, but RollWorks can handily put them on the radar of airlines, commuter stations, and any other enterprise that needs to provide grab-and-go sustenance for its own customers.
NextRoll’s product is nothing less than the lifeblood of any business that needs to raise brand awareness in order to survive. The level of sophistication that defines NextRoll campaigns was once reserved for the mega corporations that had the resources to pay for top-notch marketing departments. Mom-and-pop operations were left out in the cold, and an unfortunate “only the strong survive” environment came into play. With the affordable and user-friendly AdRoll and RollWorks, the power of state-of-the-art promotion is in the reach of millions of smaller businesses around the world. The playing field has been leveled, and NextRoll’s democratization gives a huge boost to wide-scale capitalism on all levels while bolstering its own bottom line. Here, it is instructive to think about the “thousand little Mike Tysons” analogy. While there’s big money in running the marketing for retail giants, the collective spending power of so many smaller businesses is a much larger cumulative target from which to extract income. NextRoll has been generating revenue since 2012, and they brought in $175M in 2020. They are projecting record EBITDA into the eight figures, growing more than 400 percent year-over-year. Numbers like these have a high likelihood of seizing the attention of any investor, large or small, who conducts thorough due diligence. This one would be a prime candidate for grabbing shares on a “democratized” SoFi or Robinhood account. Unfortunately (for most) though, that simply cannot be done at the moment. NextRoll is a privately held company, and as such its shares cannot be bought on any public stock exchange. Iron Edge VC can, nonetheless, provide you with pre-IPO access to our Fund that has ownership interests in this company that applies cutting-edge AI to the very business of creating commerce. If you would like to learn more, or if you know anybody else who would, please don’t hesitate to contact us by clicking “Get in Touch” below.
If you have enjoyed this article, visit the Iron Edge Blog for past updates on other pre-IPO investment opportunities.
As always, shares are available on a first come, first served basis.
Paul Maguire, Managing Partner and The Iron Edge Team