Deal a milestone for company based in Mount Pleasant

The Silicon Valley venture capital firm behind Internet stars Expedia and Netflix bought a $60 million stake in Automated Trading Desk on Friday, anticipating the Mount Pleasant-based company's stock-trading software will pay big dividends. The deal gives an undisclosed stake in ATD to Technology Crossover Ventures, a company based in Palo Alto, Calif., with nearly $5 billion of capital invested in various businesses.

The cash infusion is a watershed moment for ATD, a company started 18 years ago with $100,000 from friends and family. Executives said the deal would turn the heads of potential clients on Wall Street and help expand the company's business. The rapid-fire stock-trading firm executes about 7 percent of the buy-and-sell activity on Nasdaq and the New York Stock Exchange, handling some 280 million shares a day for clients and its own in-house accounts.

Peter Kent, ATD's chief financial officer, said TCV "is basically saying to the world: 'We like the business that ATD is in, we like what they're doing, we like their executive staff, and we think they're going to continue do well."

The money will also equate to a sizable payout for the small circle of investors who have financed ATD's growth over the past two decades. "We're very pleased to give them somewhat of a liquidity event here," Kent said.

ATD declined to disclose the size of TCV's stake but said its current shareholders will maintain control of the company and that executive officers will retain their positions. The California company gained one seat on ATD's 11-member board of directors. ATD has been in talks with about six private equity firms over the past two years, said Steve Swanson, co-founder and chief executive. But it was the company's record returns in 2006 that helped it close the deal with TCV, he said. ATD declined to give detailed information about its finances, except to say it doubled its revenue last year and remained "extremely profitable."

Money aside, TCV will give ATD access to a stable of technology superstars. The firm's 10 partners have taken positions in more than 150 companies, including some tech-sector household names such as CNet, Expedia, Fandango and Netflix. "We really do view them as more than just a capital partner," Swanson said. "They are going to help us grow our business."

In 2005, Jay Hoag, a general partner at TCV, was No. 11 on Forbes magazine's "Midas List," which ranked venture capitalists by their rates of return. The deal also increases the likelihood that ATD will sell its stock publicly, as Blackbaud Inc., another Lowcountry technology darling, did in July 2004. Some 35 of TCV's picks have undertaken initial public offerings and 25 others have merged or been snapped up by other companies. Swanson said his firm would consider an IPO in three to five years if it continues to grow as planned. "Taking a company like ours public, once it reaches a certain point, certainly makes sense," he said.

For now, ATD plans to use some of the fresh cash to build new revenue streams. It wants to sell its services to more institutional investors, as well as to trading houses that specialize in options or small companies not listed on major exchanges.