By Todd Cohen
EDENTON, N.C. — A three-year-old Edenton financial-services firm that handles insured deposits for government, nonprofits, corporations and institutional customers is changing its name, completing a new round of venture-capital funding, expanding nationally and moving its headquarters to Raleigh.
A spinoff of Broad Street Software Group, a venture-technology firm that was founded in Raleigh in 1995 and now is based in Edenton, Finistar Inc. was launched in February 2003 with $5 million in venture financing.
Now, with 10 employees and $80 million in assets under management, the firm is changing its name to Anova Financial Corp. and expects to complete a $10 million round of financing by September 30, says CEO Kim Winslow, a founder of Finistar and Broad Street.
Finistar aggregates deposits from customers and, through its secure software, allocates those deposits to a network of participating banks in increments entirely insured by the Federal Deposit Insurance Corp.
FDIC will insure deposits up to $100,000 for most customers, including nonprofits, and up to $250,000 for qualified retirement plans.
Depositors can withdraw any or all of their funds on a daily basis, and yields are based on a fixed rate set monthly that Winslow says are favorable to those of the highest-yielding certificates of deposits and money-market funds.
The expansion will begin in the fourth quarter of this year, adding sales representatives in Chicago, Houston, San Francisco, South Florida and Washington, D.C., to the current sales staff in Atlanta, Boston and Edenton.
For the expansion, the firm is targeting the nonprofit market, which now accounts for 10 percent of assets under the firm’s management, Winslow says.
The goal is to increase to 30 percent nonprofits’ share of the firm’s assets under management, he says.
County, municipal and state governments account for 75 percent of current assets under management, and institutional depositors like corporations account for 15 percent.
Finistar, which also is pursuing pension funds and insurance companies, will move its headquarters to Raleigh in the fourth quarter and have over 20 employees by the end of this year and roughly 50 by the end of 2007, Winslow says.
Finistar investors include Broad Street Software Group and roughly 50 individuals or angel investment entities in Eastern North Carolina, Florida, Georgia and Texas.
Investors in Broad Street, the majority investor in Finistar, include individuals secured by the Foundation of Renewal for Eastern North Carolina, a nonprofit “merchant bank” in Greenville that aims to spur economic and entrepreneurial growth in the region.
“There is a coterie of investors in Eastern North Carolina who are looking for good investments here,” says J. Frank Dooley, the foundation’s director of communications. “Historically, there have been all-too-few opportunities for a diverse range of investments in the region.”
Finistar also has developed a strategic partnership with a new firm in Eastern North Carolina that is developing a clearinghouse that will handle the electronic transfer and collection of charitable contributions and can be integrated with electronic banking, stock and point-of-purchase transactions.
The two firms will share revenue generated through deposits by customers the new firm steers to Finistar, Winslow says.