Soft-Market Retains Agent for $3M Round

Philadelphia-based Soft-Market Inc. said last week it had retained Sigmund Hartmann of Universal Microtechnology Inc. (UMI) to advise and negotiate Soft-Market’s second round of financing.

The round has a target of $3 million and will be launched later this month, said Soft-Market Chief Executive Mitch Rosenberg. The round will likely consist of common stock, although the details have not been finalized. Rosenberg expects that the round will close by the end of July.

Soft-Market specializes in software marketing over the Internet and provides a suite of services for software developers. These services are primarily Web-based and include software sales over the Internet and electronic delivery.

“For now, software sells better in brick-and-mortar stores, so we have made strategic agreements with companies that are stronger in physical distribution,” Rosenberg said.

In addition to those “shrink-wrap” agreements, the company has marketed its software search engine, which has more than 100,000 files indexed with brief descriptions of the products. Rosenberg said that, down the road, the authors might begin maintaining these files. The company also has an online sales and electronic software delivery service.

“[The service] includes a state-of-the-art fraud control,” Rosenberg said. “Our programmer thought it would be easy to build, but now 85% of our code is fraud control.”

Fraud efforts have apparently proven fruitful, as Rosenberg claims the company has kept chargebacks on sales to less than 1% for two years, while its competition sees chargebacks on 5% to 7% of sales.

The company intends to use proceeds from this offering largely for brand development as well as to launch agreements with a number of portals. That effort will cause further development costs as well as create the need for additional hires.