Rights Tracker - Managing Digital Rights

Rights Tracker was founded in 2003 by Ross Bentley (CEO) and Richard Warr (CTO) to develop and sell software for rights management. The team developed the product based on many years experience in media organisations such as Granada Television. It is delivered over the web as Software as a Service (SAAS).

 

As media is distributed in an increasing number of ways such as film, TV, radio, web and ringtones, both licensing and the collection of royalties becomes a more complex problem. In addition, media publishers are increasingly under pressure to maximise revenues from as many sources as possible. Managing rights with a pen and paper or excel is no longer an option, and with many of the older systems not being able to cope with the range of media available today, there is a resulting opportunity for new rights management software.

 

Rights Tracker software has been developed since 2004 in conjunction with industry partners to provide a flexible solution to meet the expansion in media channels. Rights Tracker addresses the vital need to capture, comprehend, manage and most importantly monetise the universe of rights across ever-expanding channels and platforms. Rights Tracker enables their customers to maximise sales, reduce costs and ensure proper stewardship of company assets.

 

The Company now has sixteen clients as part of establishing themselves as the UK’s leading product for the Broadcast Industry. There is a market demand for the product not just in the UK, but overseas.

 

 

The Investment Journey

 

g2i came into contact with Rights Tracker in September 2007 when Paul Cook (CFO) attended an introductory seminar looking for assistance in getting equity investment. At this point the Company had a working product and early sales and was looking for equity investment to grow the business. Rights Tracker needed the money for further product enhancements and to boost the sales and marketing activities. As well as money the Company also needed structure, credibility and experience and was therefore looking to increase the number of Non Executive Directors on the Board particularly with someone to get the Company into new markets.

 

Ross and Paul attended a g2i workshop in October 2007 which covered a number of investment topics and both of them were keen to understand how to value an early stage company. At the end of the session they left with the understanding that there was no maths involved just a matter of opinion particularly based on the management team. As a result of some pitching events after the workshop they attracted the attention of a number of potential investors. This then started a long journey – 357 days to be precise – to close out one of the offers. It took some time to make the right decision as each investor made a different offer and had different views on the strategy for the business.

 

In October 2008 the Company closed a round of investment from the Capital Fund, Creative Capital Fund and a Business Angel. There was no particular delays or disputes over the valuation or in the due diligence process. It just took a long time to assess the offers, make the right decision and go through the due diligence process. During this time the Company realised that finding investment is a real commitment in terms of effort and time, it is not something to be entered into lightly. The undertaking of securing investment absolutely diverts your resources away from the day to day running of the Company. This period of courtship and engagement between the Company and the funder requires commitment from both sides and is key to success post investment.

Role of g2i 

Ross believes the g2i Programme gives companies a structure around which they can plan their funding campaign and it also provides a quick route to getting introduced to the funding community. Each of the g2i workshops are designed round 15 companies and although each company may operate in a different sector, there was the benefit of the shared experience; it’s not like competing against each other.

 

During and after the workshop the Company were given external views on their investment potential which helped the Company to define more clearly what they did, and where they wanted to go.  The programme helped the Company to focus on where their value lay.  This had less to do with the software itself or indeed the Company history, but more to do with the market potential and the team. In short investment is not just all about current valuation but building for the future.

 

Follow-up sessions took place with the Company to help develop an Opportunity Note (2 page investment summary), and to review funding strategy. Both Ross and Paul commented that once you have got through the workshops, presenting to potential funders is much less stressful!

 

Impact of the investment on their business

 

One of the key aspects of the investment as been a stronger board. A chairman (Iolo Jones) has been recruited who has added a more strategic view at Board level. The Investor Director from the Capital Fund also has technical skills and provides an additional level of management skills. It only took a few months for the relations and trust of the expanded board to solidify. Ross comments that this has been the biggest impact of the whole investment process and has resulted in more focused board meetings and a new energy within the Company.

 

In terms of the day to day business the investment has forced the Company to review their staffing levels. New products are now under development and the Company has decided that outsourcing doesn’t work for them.

 

Opportunities, challenges, market conditions;

 

Since receiving the investment the credit crunch has kicked in and the post investment milestones were agreed before the economic downturn started. This change has not had a major impact on the Company but has forced a change in the business model to move away from capital sales toward monthly payment model. This has obviously had an effect on the Company’s cash flow but they are still on target to meet the milestones set by the investors. The credit crunch has stimulated media owners to look at maximising their revenues which has opened up opportunities for Rights Tracker with their new pay as you go business model.

 

Advice that they would give to companies seeking investment 

 

During the overall process the Company found that investors were:

1. More interested in the management team than the software

2. More interested in trade marking than copyright protection

3. Focused on detailed due diligence and will find you out if you have been economical with the truth.

4. Interested in a scalable business model – so be prepared for Blue Sky Questions!

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