Innovacorp and GrowthWorks Atlantic are leading a $1.1 million first round of funding of 2nd Act Innovations, which will help the Halifax company develop a product for midsized customers.

The company, which has developed an advanced document-organization system called Oris4 Enterprise Content Manager, or ECM, has doubled its customer base since I last reported on the company in October, and CEO Andrew Doyle said 2^nd Act  next year aims to raise about $5 million to $7 million.

Innovacorp, Nova Scotia’s innovation agency, and GrowthWorks, the venture capital fund, are each investing $250,000 into 2^nd Act, and a selection of angel investors from the region are putting in almost as much. The Atlantic Canada Opportunities Agency is also issuing a repayable loan of $150,000 to 2^nd Act.

Precipice Capital, a Halifax investment boutique led by Chris Dobbin, advised 2nd Act on the financing.

“We are ecstatic to have the seed round complete and be able to focus on executing our business plan,” said Doyle. “Our early success has come from a focus on adding new customers, expanding into new markets and developing reseller agreements to sell our groundbreaking ECM product, Oris4.”

The company’s software allows organizations to quickly and easily organize, store and find their documents, and it now has about 50 clients, roughly one-third of them in the United States. So far, the clientele has comprised companies requiring more than 150 positions, each requiring direct sales.

In January, 2^nd Act hired Frank McKinnon, a former associate partner at Barrington Consulting Group, and an authority on programming with start-ups in the US and IT consulting. MacKinnon’s first job was to help the company convert trial customers into paying customers, but he is also working on a second revenue stream that will offer document sorting to small medium-sized businesses, those with 5 to 150 positions.

The clients would use a ``lower-touch model’’ which they would access online with some support, but would not require the massive sales effort of the larger clients, said Doyle.

Doyle, a former President at the Halifax marketing firm Extreme Group, said the company now has enough cash to last 12 to 18 months, and its next round will probably be in the $5 million to $7 million range. If successful, it will be among the larger VC fundings ever in the region.

Doyle and President and CIO Peter Hickey have not had to raise money before partly because of the unconventional way the company was started. They were leading a team that had a contract to develop document organization for a client in Hong Kong. After an investment of $2 million over two years, the client ran into financial problems and the Halifax team was allowed to buy the IP to the software for $1.

Asked what the company has learned in rolling out Oris4 to 50 companies, Doyle replied, “Simple is always better. The biggest thing we ask ourselves after we sit down with a client is, `What can we take away and still let people use it?’”