Monday, November 28, 2011

Atlas Venture-backed FlashNotes relocating to Cambridge

By Kyle Alspach, Boston Business Journal

FlashNotes, an online marketplace for college students to buy and sell their course notes, is moving from Ohio to Cambridge as it finalizes its first major funding round, led by Atlas Venture.

The startup is based in Cleveland and expects to relocate to the Atlas offices in the next two weeks, said co-founder and chief operating officer Dave Petruziello.

Along with the Atlas backing, Boston’s density of colleges is a big draw, he said. “We were at Fenway for college day, and we signed up over 2,000 students from universities in Greater Boston,” Petruziello said.

The funding round should close within the week and will consist of convertible debt, he said. Petruziello wouldn’t disclose the size of the funding but said it’s just for starters — the company expects to raise a Series A equity round of $5 million to $10 million within the next year.

FlashNotes works by allowing students to upload their notes, often in PDF format, and set their own prices. The company keeps 20 percent of the sale price and the student takes the rest.

FlashNotes launched this past spring and initially focused on four universities, but students from another 40 colleges have started using the marketplace since then, Petruziello said.

The startup is expecting to make its first few hires, for its web team, after finishing the move to Cambridge. Right now, the only people working full-time on FlashNotes are Petruziello and co-founder Mike Matousek, who’s the CEO.

FlashNotes expects to stay at the Atlas office for about three months before finding its own office in the Boston area, Petruziello said. The startup considered San Francisco, but the startup scene there is “really saturated,” he said.

Atlas hasn’t committed to leading the planned Series A round a year from now, though Petruziello said he thinks there’s a good chance of that happening. The startup has also been in talks with other local VCs about participating, including Waltham’s Longworth Venture Partners, he said.