Network Hopes To Draw $5M

Proving that even technology companies that cater to non-tech savvy customers can capture the venture capital community’s attention in these lean times, international new media provider Network expects to rake in about $5 million when it closes the second tranche of its Series B round of financing within the next few weeks.

Canadian investment firm Tullaree Capital committed $200,000 in the deal’s first tranche, which closed last week. Part two includes several undisclosed institutional and individual investors, said Mike Wiebe, director of marketing and communications with Chalk.

Interestingly, the announcement about the deal’s first closing came from Tullaree, not Chalk. In fact, Wiebe admitted during an interview that he wasn’t aware of the VC firm’s intent to send out a news release prior to seeing the announcement, which appeared on an industry newswire early last week. He also said that the company planned to issue its own statement once the entire deal had officially closed.

Technology in Laymen’s Terms

Based in San Francisco, Chalk provides computer and technology-related content for the Internet, television, print, in-flight airline entertainment and radio. Its specialty is teaching people how to improve their professional productivity and personal lives through technology. Its content is designed primarily for those who are intimidated by computers – or tend not to use them – and helps them learn about technology in a non-technical way, Wiebe said.

Currently, the four-year-old company’s bread and butter is its namesake’s syndicated television program, “Dave Chalk’s Computer Show,” which reaches more than 70 million households worldwide. It also launched a new show called “Dave Chalk: Computer Life” last month.

The syndicate even caught Tullaree Chief Executive Joseph Van Bastelaar’s attention, eventually leading his firm to pursue Chalk as a viable investment.

“I had seen David [Chalk’s] show long before I had ever heard of the company as an investment opportunity,” Van Bastelaar said. “It appeals to the non-technical person, and I’m a non-technical guy. I always liked the simple way the shows explained things.”

Since its content is geared to people just like him, Van Bastelaar quickly saw the tremendous potential of Chalk’s business model.

“I believe they’re going to make good money, and after all, that’s every venture capitalist’s dream isn’t it?” he noted. “We all hope to make our money back a few times over.”

High-Flying Content Play

Besides its broadcast programs, the company has a booming in-flight entertainment business that caters mostly to business travelers. Over 279 million passengers a year view Chalk’s customized programming aboard domestic and international flights.

Recently, it also established an interactive arm that is working with some of the Web’s leading e-commerce sites to change the way consumers shop online. One of its biggest Internet customers is Yahoo!’s shopping and computer division.

Indeed, Chalk plans to use a large chunk of the capital it collects from this latest round of financing to ramp up development of the interactive camp, as well as to expand its content development and marketing efforts.

According to Wiebe, the company’s brand awareness has been a boon for its revenues, which are “on a steep upward curve.”

And despite the dotcom in its name, it refuses to identify itself with that much-maligned sector.

“We don’t consider ourselves a dotcom,” he noted. “We have a distinct advantage in that we don’t have to spend a lot of money to generate awareness the way other companies did when they were coming out of the gates.”

While Chalk has yet to post a profit, Wiebe said it’s consciously reining in costs to keep the business lean and mean, so much so that he anticipates the company will be self-sustaining by sometime next year.

Should it choose to build on its already successful international operations in London and the Scandinavian region, however, it may seek an additional round of private financing to expand its presence in other overseas markets.

An IPO may also be a possibility if and when market conditions improve, Wiebe said.

Chalk’s last visit to the private equity market was about six months ago, when it raised $3.75 million in a Series A round funded by CML Global Capital, I-Spire and The Walker Group. Chalk Chief Executive Elizabeth Collet also participated, along with a few other individual investors.