IncWell, the Birmingham, MI-based venture capital fund led by former auto executive Tom LaSorda, said today that it has invested in Inside Social, a Seattle-based startup that has built software to help companies measure how social media engagement translates to actual business results. The terms of the deal were not disclosed.
Evonna Karchon, IncWell’s director of operations, says she and LaSorda went to the SXSW conference in March and were impressed by Inside Social, which participated in an accelerator event. Inside Social, which is a graduate of the Techstars Seattle accelerator, tracks how sharing on social media leads to engagement, clicks, transactions, or other conversions, and Karchon believes the company’s patent-pending technology is transformative.
“Inside Social is really shedding light on digital marketing,” Karchon says, describing traditional methods of tracking social media’s effectiveness as “a black hole.” She says Inside Social, on the other hand, is able to identify who the influencers are on social media and provide insights on how digital marketing can be maximized.
Inside Social, a member of Techstars Seattle’s 2013 class, got off to a fast start. Last August, the startup announced it had raised $405,000 in a convertible debt round from 12 investors. The company lists Bruce Jaffe, the former head of M&A at Microsoft, as a director.
Brewster Stanislaw, Inside Social’s CEO and co-founder, says his company is devoted to conceptualizing social advertising in ways that haven’t been done before. “Word-of-mouth is the most powerful marketing channel in existence, so our mission is to help social media become the most powerful marketing tool in existence,” he says.
¶Stanislaw says IncWell appealed to Inside Social partly because of LaSorda, who served as CEO of Chrysler after a long career in the automotive industry: “The auto industry is a place where we think we can add a ton of value. We can show how social media is affecting sales. We’re building a platform that understands and optimizes what’s working.”
¶IncWell, which got started in May 2013, has 11 companies in its portfolio. Karchon says the firm will probably announce one more investment before it closes its first fund, valued at $2 million, and begins raising money for a new fund. She says IncWell differentiates itself with the amount of “big business” expertise it brings to the table. In addition to LaSorda, IncWell’s limited partners include Roger Penske, owner of the Penske Corporation; Stephen Polk, former CEO of R.L. Polk & Co.; and Wayne Sales, former CEO of Canadian Tire.
Karchon says that despite the partners’ deep roots in manufacturing and hardware, most of the technology that IncWell has supported has been software-related, though the firm would like to explore more industrial technology in the future. “In the next month or two, there will be a lot of activity here at IncWell that we’re all excited about,” she adds. “There’s a major announcement coming for our company. It’s more proof that we’re continuing to grow.”
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