Canal Partners: Private Equity For Software & Internet Tech Companies
Often in the startup world, a company will get to the point of “success” where it has a solid management team and a cash-flow positive product or service, but lacks the capital, connections or guidance to scale to its full potential. At this level, Arizona startups often face the additional challenge of trying to attract investors from the Bay Area for additional capital, unaware that there are, in fact, local investment firms as well, such as Scottsdale-based Canal Partners.
Canal Partners is a private equity firm that provides professional investor capital to software and internet technology companies that have market-proven products and services with an enterprise value of $2 to $10 million. Its managing partners, Todd Belfer and Jim Armstrong, are serial entrepreneurs who were angel investors before forming Canal Partners in 2007. When the partners invest in a company, the primary goal is to work with entrepreneurs and founders to help manage increasing scalability, financial stability and shareholder value.
Canal Partners prefers to invest in local businesses, and has done so in companies such as Web PT, NETtime Solutions and Omedix. Its latest investment, however, was in San Diego-based Deal Current Network, a leading coupon and local offer software and marketing solution for broadcast and print media publishers, direct advertising agencies, online communities, and independent business owners.
The capital from Canal Partners will help Deal Current accelerate growth by boosting sales and marketing as well as advancing its technology. As part of the funding, Todd Belfer will join Deal Current’s Board of Directors.
While Deal Current may be based in California, the effects of the investment will also be seen here in AZ, as the company already has some local media clients and affiliates. For example, Gannett will expand the reach of its own Deal Chicken daily deals to show within the Deal Current Network.
According to Todd Belfer, the future looks bright for AZ tech companies, especially in the last four years. He credits, in part, local incubators and accelerators such as Gangplank, Tallwave and (most recently) SEED SPOT. Belfer’s advice for startups looking to attract investors is to get in with an incubator or accelerator to develop a solid business plan, and focus on proving the product or service in the marketplace.
More About Canal Partners
Managing Partners: Todd Belfer, Jim Armstrong
Funding: Self-funded, profitable
Phone: (480) 264-0238
Headquarters: 7114 E. Stetson Dr. #360 • Scottsdale, AZ • 85251