Steve Wood & Gerry
Djangos Records & OVP Venture Partners
When Steve Wood bought Portland, Oregon-based Djangos Records in 1999, he envisioned a future for the store that went beyond used vinyl records and obscure indie bands. Wood, 36, wanted to turn Djangos into the industry's most successful independent retailer. But there was just one problem: He needed cash.
Meet Gerry Langeler of Kirkland, Washington-based OVP Venture Partners. Langeler had funded Wood's first venture--a software company--and liked Wood's entrepreneurial spirit. "We admire Steve's attitude and drive," says Langeler. "Steve is a scrappy competitor."
Djangos also represented an attractive opportunity for OVP. "This business will do better in a downturn because people are more price-sensitive," says Langeler. "[Djangos] is an investment that will retain value, because it has protection on the downside that we almost never see."
Thanks to lead investor OVP and a few other VC firms, Wood's company received $9 million in first-round financing last year. Djangos (named after legendary guitarist Django Reinhardt) now has 19 stores in five major metropolitan markets, a Web site that lets customers access all the stores' inventories, and projected revenue of $70 million for 2002. "What makes Djangos unique is our relationship with customers," Wood says. "They come to our store to buy and sell eclectic products that are out of print or hard to find."
Langeler's hands-off approach has worked out perfectly for Djangos. "The last thing we want to do is run the company," says Langeler, who is a Djangos board member. "We have a strong influence, not control. We're just here to write checks and pour fuel on the fire."