Subscriptions come in all forms. There are subscriptions for TV packages, streaming services, magazines, merchandise and countless other services. Now, VentureSouth is starting one for investing.

But this is no ordinary Netflix subscription or Loot Crate. This is an entry-level program that could help new investors get involved in tech startups in the Southeast for a minimum $5,000 per quarter.

VentureSouth’s RollingSouth capital fund is the latest project from a firm that has invested more than $50 million in more than 80 companies. While a lot of investment is dealing large sums of money to select startups, Paul Clark, managing director at VentureSouth, said this investment model allows investors to get in at a relatively low price point.

Southeast accounts for 30% of the nation’s population and economic activity in the United States

According to VentureSouth’s website, the Southeast accounts for 30% of the nation’s population and economic activity in the United States. That, combined with its favorable regulatory environment and positive economic growth, makes for an attractive place to start a business — and invest.

Clark said the program, which is the first in South Carolina, started in October and will start funding its first early-stage tech startups around Jan. 1, 2022. After that, they plan on helping about four startups per quarter, with four completely new companies each quarter.

While Clark said he couldn’t talk about who was being chosen for the first round, he did say they had a short list.

“It’s a good way for new investors to dip their toes in the water,” Clark said. He doesn’t think the rolling fund will replace more traditional forms of investment but believes it will bring in investors from across the country to keep investing in tech startups in S.C.

Clark said Greenville might be a bit behind the curve as other tech-heavy cities like Atlanta, Raleigh or Miami. He believes there’s a strong entrepreneurial community that will work out well for what the RollingSouth program will do. Besides Greenville, the company points to new campuses for Google in the Raleigh/Durham area, venture capital groups moving to Miami and mega-acquisitions in Atlanta as evidence the Southeast is taking its place at the investment table.

Startup capital

According to VentureSouth’s website, despite the number of startups moving to the Southeast, the amount of startup capital remains behind the curve, and finding risk-tolerant investors is still difficult.

The quarterly schedule allows for a more manageable payment schedule rather than a large upfront fee. Funds are handled through AngelList, which handles the fund administration, like taxes, investor reporting and paperwork.

Quarterly funds are subject to a 1% administrative fee along with 15% carried interest. They seek a 50% internal rate of return, yielding a target fund return of at least 20%. According to the website, there will be enough portfolio diversification to net an attractive return on investment.

Clark said rolling funds are relatively new, even in the investment community. The first funds started in April 2020, and they ramped up by late summer 2020.

• Subscription start date: Jan. 1
• Minimum quarterly subscription: $5,000
• Minimum subscription period: 4 quarters
• Management Fee: 1% per annum over each fund’s 10-year life, payable quarterly over the first four years
• Carry: 15%
• AngelList Admin Fee: 0.15% per annum over each fund’s 10-year life