VC NEWS DAILY: The social media world seems pretty crowded. What motivated you to start Fantourage?
FANTOURAGE: Well, John Davies, our majority owner, owns a parent company called Dining Alliance, and it's the largest group purchasing organization in the country. I work with him there, and we serve over 11,000 restaurants nationally.

John had recognized there was a loyalty issue in social media. There are these celebrities, bands, retailers, but they didn't have a loyal following on social media. It was more a dump of social information. Facebook and Twitter, they have a "like" and a "follow," but there's really no engagement.

John said to me, "Why don't we do something?" He'd just registered the name [Fantourage], and wanted to figure out what to do with it. He recognized there are all these bands, celebrities on Facebook who don't have an indication of who their loyal fans are.

John and I are partners in the other company, so we branched off, brought in a great IT developer, and he started to develop the site as a Facebook game - which evolved into what it is today. It's a social game that allows bands, brands and celebrities to recognize and reward their most loyal fans.

VC NEWS DAILY: Who are your ideal celebrity users?
FANTOURAGE: We find the most successful users are emerging bands that want to promote an upcoming album, tour, etc. We've just launched the Facebook app within the past few months. We did that with a band called Deer Hunter...they're an up-and-coming band. We wanted to test their app out, and within two or three days, we had an amazing response. We had 250, 350 fans eligible for "meet-and-greets." What we were providing was the chance to recognize their top fans, who are creating content and making comments about their albums.

We had a situation develop with Taylor Hicks (a singer who won the American Idol competition in 2006.) I didn't even know who Taylor Hicks was until I saw him streaming up and he was one of our top celebrities... but he had these loyal fans, and they rallied on Fantourage behind him. And there was a point contest, and they made him one of the top celebrities in points. So they created a conversation for him, and it motivated them to put him at the top level.

And Taylor Hicks recognized Fantourage. His publicist set up a couple of meet-and-greets with his top fans he met with Fantourage. The thing is, we didn't approach him. His publicist found us, and he discovered his fans through Fantourage.

VC NEWS DAILY: What makes it all work?
FANTOURAGE: We have a sophisticated point system with every activity they do that allows us to indicate the fan's level of influence - every post they put up on Facebook gives them a point, the number of comments or feedback they get from their post - so they're heavily incentivized to create good content, and bands are able to truly recognize and reward their most loyal fans. Celebrities provide rewards like meet and greets, backstage passes, and signed memorabilia. The first reward was from MGM, for the "Hot Tub Time Machine" movie, they gave away a free hot tub... we've done a free meet-and-greet with Donald Trump at a five-star hotel...

VC NEWS DAILY: How important are these "top" fans to the artists and celebrities who work with Fantourage?
FANTOURAGE: There's something in the entertainment world called the 80-20 rule: 80 percent of your profit is produced by the top 20 percent of your fan base. So, it truly works for bands and celebrities that we cater to. Plus, our average users spend an average of three hours a day competing for these contests. And these loyal, avid fans really produce a lot of content, which helps engage the band's audience.

When you get down to it, that's what bands, brands, and celebrities really want. They might have millions of fans on Facebook, but it doesn't matter much. What they really want is to identify who creates influence... so they can empower these people to spread the word. In major cities, bands call them "street teams." What we become is the street team for these bands and brands in the social networking world. So, it's not necessarily feet on the ground, but it's viral empowerment of their most avid, loyal fans.

VC NEWS DAILY: So you're measuring the quality of the social media impressions these fans are creating, not just the quantity.
FANTOURAGE: Exactly. What we have the ability to do is track when somebody shares something on Facebook, and the ability to see who responds to that, who's liked it - who has been influenced, and the influence of somebody who initially saw an item, and who's at the end of the tree who is the latest to respond. You go into a band's Facebook page, and whatever they've posted gets buried in minutes, if it's an active stream. Bands don't really know who they are, so we're giving them the ability to recognize who they are.

VC NEWS DAILY: Where do you go from here? Are you making any money yet?
FANTOURAGE: Recently, we've really focused on our Facebook app, and we'll continue to launch it in the next six months with other bands and celebrities. So, I expect to see some tremendous growth in January. There's no revenue stream today, but the planned revenue stream could be a daily subscription service - contests for a minimal fee... we could run campaigns for the bands like the WildFire app, which costs $1 a day... but there's several different ways for bands to promote. We've also had some corporations that are Fortune 500 level, and they're interested in having us promote their products, and they're interested in paying per share.

VC NEWS DAILY: Have you tried to look for venture funding?
FANTOURAGE: Actually, we've been approached... Google wanted to invest in the plan, but we put it off, because we're not a profitable company yet. John's heavily invested in the company. But investing based on an opportunity cost, instead of showing the potential revenue stream, isn't wise. I expect that within six months to a year, we're going to have to put ourselves in a position to entertain these offers, based on the level of capital that will be needed to fuel the expansion.

VC NEWS DAILY: What's your favorite example what the site can do?
FANTOURAGE: If you go to our site, there's a woman named Terry Vincent who produces wedding cakes and cupcakes. By no means is she an A-list celebrity (though she's been on the Food Network and she's well-known in the baking community). But she's on our site and she's got a group of people loyal to her that are responding on a daily basis. And she provides regular rewards: a cake cutter, an autograph... she's consistently rewarding people who create "buys" for her. But what I love about this story is that you don't have to be an A-list celebrity to be an online marketing success. Sure, we've had success with Donald Trump and with MGM, but what's really exciting to me is the people who are focused on creating a brand and a following.