|Nathan Latka, a 2008 graduate of Loudoun County High School founded startup Heyo in his dorm room at Virginia Tech. -Courtesy/Heyo|
It was on the bottom of bunk beds in his Virginia Tech dorm room that Nathan Latka, a 2008 Loudoun County High School graduate, began a company that took in $400,000 in its first year.
Heyo, a company which helps business owners produce custom Facebook fan pages for their products or services closed $2 million of Series A funding from Radford-based Valleys Ventures last week.
The 24-year-old Leesburg native got the idea to start the company midway through his junior year.
Latka had heard that one of his fifth year peers was having trouble procuring a job after graduation, which Latka says motivated him to make his own way.
He began by cold-calling businesses and offering them Facebook marketing services for $700.
Even though he had no coding experience, Latka made the calls, because he didn't want to teach himself to code until he sold tabs and could make a business case.
Eventually, Carrie Wilkerson, the author of the Barefoot Executive, said she was willing to take a chance on him.
Latka made a few sales, convinced himself he could make money on the idea and started watching dozens of YouTube tutorials to learn a special coding language for Facebook.
Within six months of starting the company Heyo, Latka had closed 100 deals, clearing $70,000 for the third- year student.
Latka decided to forgo his last bit of college and dive head first into the business.
The company expanded from Latka's dorm room with a space above a bar in Blacksburg where Latka began hiring engineers.
The company is now in a downtown Blacksburg building fit to feel like a tech company.
Heyo currently has 10 full-time employees and five part-timers.
The software makes the process of creating a Facebook Fan page with tabs and an online retail component easier and more intuitive.
The aspirations Latka has for Heyo are big. He speaks about the future in terms of billions of dollars, not millions.
Since Facebook went public in May 2012 it has been somewhat beholden to making marketing and advertising easier on the platform.
Sales of these services are what butters Facebook's bread.
Latka mentions that he has a great relationship with the folks at Facebook and believes his company can growth with the social networking Goliath by creating valuable resources that advertisers and marketers need.
Heyo is currently running a seven-day free trial for users, because Latka wants people to get in, like the service and eventually pay for a subscription.
The entrepreneur hopes to eventually monetize the service by using a $30 per month subscription model, where clients bill services and pay for Heyo to host the Facebook tabs they create.
In October, Latka decided to rename and update the software from Lujure to Heyo.
He calls the company a "multi-billion dollar opportunity."
Soon after he updated the name and software, some time in November, Latka called Rob Patzig, the senior managing director and chief investment officer at Third Securities, which manages the Valleys' Ventures venture capital fund and asked for lunch.
The two had met previously through a mutual friend and had kept in touch.
At the lunch in November, Nathan without intending to, convinced Patzig and the team at Valleys' Ventures that his company was a worthy investment.
Patzig liked that Heyo focuses on the Roanoke and Blacksburg area.
"We like the local connection," said Patzig. "We’re located in Radford."
What else won the investors over?
Patzig says that Latka has already demonstrated he can build a business with hundreds of thousands of dollars in revenue.
Latka also understands what a windfall like this can mean for a young company.
"This funding will allow us to get this product to market more quickly. It will allow us to hire engineers," said Latka.
He's looking to hire engineers all over the state.
Historically the fund has been a health and biotech investor, but recently investors decided to start a regional Venture Capital fund of $15 million just to capture the Roanoke and Blacksburg area regionally.
The region has untapped potential according to Patzig, because many venture capitals are not located in the area, and are not as likely to journey outside of their immediate area to find investment opportunities.
Patzig said Valleys' Ventures has additional capital, so hopefully if everything goes well they will be able to make a strategic exit and sell to a larger firm at a profit, which as Patzig says is generally the strategy when investing in start-ups.
Heyo is the company’s first investment as part of its NewVa initiative.
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