BURLINGTON, Mass. – In an effort to support the beta testing of its products, Incentive Systems recently closed a second round of venture financing at $7.3 million, just six months after landing its initial round of institutional capital.
Polaris Venture Partners led the round, which had only one new investor – Frank Ingari of Growth Ally L.L.C. Return investors were BancBoston Ventures, Thomas Herring and William Warner, said Mike Byers, the company’s chief financial officer. The first venture round had been structured to give existing investors pro rata rights in the latest round, and the group wanted the entire offering when the company began the second round, Mr. Byers said.
Incentive Systems has developed a software product that keeps track of incentive compensation packages offered by companies. Mr. Byers said larger corporations have kept these records on spreadsheets or legacy systems that can be inaccurate, are expensive to maintain and are reactive in nature.
“They essentially function as a check-cutting mechanism,” he said. Incentive’s software seeks to improve on these systems by managing the whole arena of incentive compensation.
The company plans to install its software across a number of industries that use incentives as a part of compensation, Mr. Byers said. The company’s current beta sites are a medical instrumentation company, a retailer, a telecommunications company and hardware and software companies.
“Financial services also is an area we certainly intend to target,” he added.
The company used its first-round of financing to complete the software design. Second-round proceeds are intended to carry the company through beta testing, which will be followed by a general release later this year. Mr. Byers said he does not anticipate the company requiring another private round, and there will not be another financing of any type for approximately 12 months.