Osage Partners, Philadelphia; Greycroft Partners, Los Angeles; and MissionOG, Devon, say they have invested a total of $3.2 million in Center City-based PeopleLinx. The firm, founded three years ago by Nathan Egan and Patrick Baynes (both veterans of the career-oriented LinkedIn social media service) helps companies including FMC Corp., Firstrust Bank and Prudential use LinkedIn and other social-media accounts to boost data collection and sales.
PeopleLinx will use the money to hire more staff. The firm now employs about 13 fulltime and 25 contractors. "By the end of the year we'll probably put on 20" more, says cofounder Nathan Egan. "We are expanding aggressively."
Egan, a goateed father of three, Cornell grad, ex-chemical salesman, joined LinkedIn in 2008 after his Villanova MBA studies turned his career toward software. He and Baynes set up PeopleLinx a year later. They'd seen big companies improvise LinkedIn ground rules for employees, and sensed an opportunity to get rich like earlier consultants who helped corporate America adopt email and search.
"We want to make these people look good, because they are good, and to make sure their employees know how to use these tools," intensively, but also selectively -- for example by not adding everyone who wants into your network, Egan added. LinkedIn and other social media are replacing trade shows and business events; companies struggle to make consistent social-media policies and exploit the massive information that workers, clients and potential customers have been voluntarily posting on LinkedIn.
"LinkedIn has gone through a big evolution," Egan told me. The company at first resisted consultants. "But now they take a view that we're out there promoting LinkedIn" -- and have lately opened their API (application-programming interface, or "software DNA") to license and attract an "ecosystem" of small firms promoting common products -- as Google, Salesforce and Facebook have in the past, Egan told me. (LinkedIn didn't immediately return calls seeking comment.)
Greycroft founder Ian Sigalow, in a statement, said his firm is backing PeopleLinx becaue it has the potential to do "what we saw Buddy Media do in the early days of Facebook." Buddy, a brand consultant to corporate Facebook users, was bought by Salesforce.com, from Greycroft and other investors, for $736 million last summer.
Local PeopleLinx backers include the group of successful suburban Philadelphia company-founders who operate Devon-based investment fund MissionOG (geek/hiphop alert: OG stands for Operators Group; also, jokingly, for Original Gangsters). MissionOG includes folks like George Krautzel, who with a partner sold his self-funded info tech research firm, ITtoolbox, to Corporate Executive Board, Washington, D.C., for $58 million in 2007; and Andy Newcomb and his partners from eCount, a Conshohocken debit-card program developer purchased by Citigroup for around $220 milllion in 2008.
"There's a whole ecosystem of companies being created from these tools," exulted Krautzel. "I don't see firms like PeopleLinx providing just a one-time fix. It's evolving. Businesses and their employees now have thousands of [social media, employee-built Web pages]. These guys offer them a dashboard where they can structure their employees' activities on platforms that keep evolving." They use their training, he added, to "help with onboarding employees" onto the service-as-a-software (SaaS) platform, which "just keeps getting better and more intutive." PeopleLinx "is taking the fear factor out for users."
Krautzel, another Villanova grad, says MissionOG tries to combine the hands-on approach of local "angel" investors, the financial discipline of venture capitalists and the move-in-and-help ethos of the kind of private equity firms that grow small tech businesses into big ones.
Other MissionOG-backed firms include Brendan McCorkle's back-end mobile enterprise software developer CloudMine and Khushboo Shah's third-party server software developer and consultant Cloudamize, both of which are graduates of the Philadelphia-based DreamIt early-stage company competition.
(The good folks at DreamIt, who we've been writing about almost since their beginning, don't like my pop-culture comparison -- American Idol for tech start-ups -- they write that "DreamIt does not run competitions, we facilitate deep entrepreneurial bootcamps for selected companies to get an immersive education and exposure to the entrepreneurial communities where we run accelerators."-- Just so that's clear.)