Answers Corp. (NSDQ: ANSW), parent of reference site Answers.com, is raising up to $13 million from VC firm Redpoint Ventures. The company has already sold $6 million worth of convertible preferred stock, convertible into 1,333,333 shares at $4.50 (shares closed yesterday $3.92). Redpoint then has the right to purchase another $7 million worth of convertible preferred stock, convertible into 1,272,727 shares of common stock at $5.50. Each investment comes with additional warrants, basically giving up Redpoint an upside sweetener. As of last quarter, Answers had about 7.85 million shares outstanding, for a total market cap of $30.8 million.

These VC investments in public companies are obviously pretty rare. The release notes (very) optimistically that the last time Redpoint invested in a public company it was Intermix, the parent of MySpace, before selling out to News Corp (NYSE: NWS). This particular investment looks like it’s about buying into Answers’ fast-growing WikiAnswers business. The new-ish unit boosted the company’s results in recent quarters, and was named a top-growing site in a recent TNS report. There’s no specific mention of the use of funds, other than strengthening the company’s balance sheet. Release.

This past year has been a tough one for Answers, which had to pull an attempted acquisition of Lexico (it ultimately sold to IAC). That followed an algorithm change at Google (NSDQ: GOOG), which crushed the company’s results. Altogether the failed bid cost the company $2.6 million.

• Display Ads Grew 8.5 Percent In Q1, Down From Last Year’s 16.7 Percent Gain: TNS
• Earnings: Answers Q1 Revs Up Mildly; Decline At Answers.com Offset By Strength At WikiAnswers
• 10-K Watch: Answers.com: $925K In Reimbursements For Failed Lexico Bid; $2.6 Million Total Charge