Jul 9, 2015 · 5 minutes

New Hampshire-based Adored uses beacon technology as a way for retailers to enact loyalty rewards programs. The company, founded by Cory von Wallenstein, just announced a seed round of $2.3 million.

Adored uses iBeacons -- low energy proximity sensors powered by Bluetooth -- to create noninvasive and individualized experiences for consumers without alienating them. As Eric Hjerpe of Kepha Partners told me, loyalty rewards are a big area of interest right now. Referencing the success rate of companies innovating in the space, Hjerpe said, “Loyalty rewards has become jacks or better.”  

Adored's iBeacon technology collects, separates, and analyzes customer behavior, resulting in very personalized VIP shopping experiences for consumers. Think the punch-card at your local coffee store, but on your iPhone -- and without the hassle of forgetting said card and missing out on your free latte.

For von Wallenstein, the iBeacon space is one that is prime for innovation. He can even remember the date when he had the realization that there could be a market for a product like Adored.

“It was July 3, and an investor buddy of mine made an offhand remark that some of the most impactful companies are made because there is a technology out in the wild but people haven’t figured out what to do with it yet, von Wallenstein said. “That comment really stuck with me, and right after that I stumbled across iBeacon. And when I realized that, even if you force quit an app or restart a phone, that app will still wake up from the background when it comes within 200 feet of that iBeacon signal again, that’s when I realized, holy shit, this is the holy grail of indoor location.”

For his part, von Wallenstein readily acknowledges the major problem with beacon technology.

“It comes with huge, huge privacy concerns,” he said. “Beacons are being deployed as a marketer’s dream and a consumer’s nightmare.” But with Adored’s anonymous individualization, von Wallenstein says that the consumer’s privacy rights are protected, and they can still get a delightful loyalty rewards experience.

There are certainly a lot of people who believe in both the product and von Wallenstein. Among the investment group are lead investor Kepha Partners, as well as Boston Seed Capital, Matrix Partners, and Borealis Ventures. Additionally, Kayak co-founder Paul English, Wayne Chang of Twitter and Crashlytics, well-known Boston angel Joe Caruso, and many other prominent local angels and entrepreneurs are involved. Also notable is that five members of Dyn’s past and present leadership team, where von Wallenstein was formerly the CTO, joined the funding round, including CEO Jeremy Hitchcock. 

Probably the most interesting name on the list of backers is Michael Skok, who is investing as an individual. His brother David Skok also happens to be the lead for Matrix in the deal. Michael Skok departed North Bridge Venture Partners in the fall after a 12 year run at the firm, and has been quiet up until now. Word is that he has been working on a new project out of the offices of open-source content platform Acquia. What exactly Skok is building is still a mystery -- although, while it may be some sort of investment vehicle, I believe he has a non-compete with North Bridge that would prevent that from happening anytime soon.

Beyond the mysterious nature of Michael Skok’s investment, the excessive amount of investors -- 13 angels and four institutional investors -- is something that has been the focus on numerous national media outlets this week. On Monday, The New York Times’ Mike Isaac covered the trend of massive angel “party” rounds for early stage companies, while yesterday Dan Primack gave his own take on the matter for Fortune.

For Isaac, the vogue for angel accumulation boils down to a big game hunt.

“For entrepreneurs, nabbing numerous angels — and prominent ones to boot — has become a kind of trophy collecting, a chase that comes with some risk for their companies,” he wrote. The danger, according to Isaac is that many angels lack the experience, wherewithal, and even the actual interest to help a startup out -- which is supposed to be part of the deal -- when the shit hits the fan for early stage companies. For Primack, the issue is one of communication between founders and the massive number of angel investors they often collect. 

As a quick aside, Isaac’s balm for the problem, Sam Altman and Y-Combinator’s class for angel investors, might be one of the most laughable and absurd solutions to the issue at hand. I may be mistaken, but Y-Combinator might be the single institution that is most responsible for creating a climate where early stage companies have over-stuffed term sheets and indifferent investors at their annual demo day. But I digress. 

In terms of Adored’s large number of investors, von Wallenstein believes that everyone involved brings some value and expertise that can help the company grow.

“They each bring something to the table,” said von Wallenstein. “It wasn’t really their cash I was interested in, it was having them rooting for the success of Adored and being part of it.”

But the amount of interest was a bit shocking to some involved, including Kepha’s Hjerpe.

“Frankly, I was surprised,” Hjerpe said. “A lot of people who don’t normally do seeds were in on this, so it was an unusual experience.”

For von Wallenstein, the startup investment process requires a lot of leaps of faith: some may work and some won’t, but that is just the nature of the beast.

“When you do seed investing,” von Wallenstein said, “the only thing you can go on is the people. You are going to hire that person across the table from you to make you money, so that’s all you’ve got. The product ideas are probably going to change, the market ideas are probably going to change, customers are probably going to change, but if you have really solid people across the table, that’s what you bet on,”  

“And that’s what these people are betting on, we have a really great team,” he added.