Startup Gains $2.5M Backup

"Online backup provider Carbonite said on Thursday it has secured $2.5 million in the first round of funding from two angel investors and a venture capital firm to extend its reach in the retail market.

The Boston-based startup, which was started by serial entrepreneurs David Friend and Jeff Flowers, is expanding its presence in the consumer space, a channel that Boston-based VCs tend to avoid, according to Mr. Friend.

“Unfortunately there aren’t a lot of VCs experienced in consumer products,” he said. “They are generally knee-deep in business-to-business and enterprise products.”

Mr. Friend, who has co-founded four other companies—three of which were sold to larger entities and a fourth that is still private—said he had a difficult time attracting VCs in the Boston area. He turned to angel investors Common Angels and Keiretsu Forum, both of which invested in Carbonite.

“We found that the terms being offered by VCs were terrible,” he said. “And we are a management team with a very good track record. I financed the company exclusively through angels and then the VCs came calling.”

The company added 3i, a VC with some experience in the consumer channel. Carbonite named Mikko Suonenlahti, a partner at 3i, to its board of directors. "

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