Shane Young -Darren Brown, OBJ

The company, which was founded in May 2000, also received backing from new investors Venturelink and Working Ventures, as well as from existing investors Venture Coaches and Primaxis Technology Ventures. Previous to this infusion of cash, Spotwave attracted $3 million in May 2001.

Spotwave develops and sells products that increase cellular phone coverage in buildings and vehicles.

"I won't tell you it was easy,” says Spotwave's president and CEO Shane Young. "The process was long given the difficult market conditions.”

He started looking for series B financing in August 2001. Subsequently, the company closed off on a term sheet involving Newbury and VenGrowth in October; the round closed in late December. The series B round was based on a flat valuation, which satisfied Young.

The company plans to spend the money on product development as well as sales and marketing. With 31 employees, Spotwave is looking to hit 45 by the end of the year.

"I think we struck a fair deal,” says VenGrowth's Graham Matthews, who will join Spotwave's board of directors. "Both the new and existing investors were pleased with the amount, the investor group, the terms and the fact they managed to complete it in a pretty tough financing environment.”

For Newbury, Eagle One Ventures' principals Ken Wigglesworth and Conrad Lewis did the bulk of the due diligence.

Lewis already had an inside track on Spotwave because he was one of the company's original angel investors and sits on its board of directors.

"They have an extraordinarily strong technology that will sell today,” says Wigglesworth, adding that the syndicate came together without a lot of pain.

To land Newbury money was especially sweet for Young, who wanted to have at least one California-based VC on board.

"Having a lead based out of California was something we wanted to do from the outset,” he says. "We're very happy they decided to co-lead.”

Prior to May 2001, Spotwave operated under the name of DPS Wireless. Company officials said the name Spotwave better reflected the company's vision of being in all of those "spots” where cell phones don't work.