VentureSouth, an early-stage venture firm, works to meet the growing demand for startup investment across the Southeast.
The Greenville-based firm manages angel investor groups with more than 550 individuals funding early-stage technology companies. Paul Clark, co-founder and managing director of VentureSouth, said nearly $100 million has been invested in more than 100 companies over time.
In the first half of 2024, VentureSouth invested $5.5 million in 24 companies. The firm aims to get its deployed investment capital up to $10 million again by the end of the calendar year. Clark said the firm is back on its usual investment pace after having a quieter year in 2023.
“Overall, venture capital and angel funding went down a bit in 2020, 2022 and 2023 and it did for us a little bit too,” Clark said. “So far this year, people seem to be pretty active.”
Clark noted it has still been a challenging year for companies to raise capital in the Southeast due to a smaller number of people funding companies. At the same time, there are more startup companies in the region than in the past, leading to an unmet demand for capital.
VentureSouth’s angel groups typically invest $500,000 to $750,000 in a startup. Due to the rising demand for capital, Clark said there is normally an investment gap the firm must fill for startups.
“It’s harder for us to find somebody to fill that gap with us than it used to be,” Clark said.
Successful exits
Exiting a company is an essential part of how VentureSouth’s angel investor groups make money. Two of the firm’s common exit strategies are through acquisitions and initial public offerings.
“The number of acquisitions has gone down a bit and the number of IPOs has gone down to zero — more or less,” Clark said. “Finding ways to get investors some returns has become a lot harder in the last 18 months compared to the previous three or four years.”
Clark said these decreases are due to the current economic environment, interest rates and worries about antitrust concerns with larger transactions. VentureSouth typically has four to six portfolio companies acquired each year. Only one of the firm’s portfolio companies has been acquired in the last year.
Sensory Analytics, an industrial-technology company, was acquired by Industrial Physics in August. VentureSouth completed a successful exit from the company and nearly 150 investors realized returns from investment in two equity rounds for the company.
Clark said several portfolio companies are actively working on being sold and they hope to be back up closer to six acquisitions by the end of 2024.
“We’re hoping to sell two or three more companies and have them have successful exits,” Clark said.
VentureSouth network growth
Since 2008, VentureSouth has continued to expand its angel network into markets across the Southeast. New angel groups were recently added in Savanah, Georgia, and Melbourne, Florida, in the first half of 2024.
The firm now operates angel groups in Florida, Tennessee, Virginia, South Carolina, North Carolina and Georgia. Clark said the firm’s angel groups can impact communities within these states by helping the entrepreneurial ecosystem.
Angel investors also offer their knowledge and expertise to help early-stage companies succeed. VentureSouth’s network of investors includes community leaders, successful entrepreneurs, academics, economists, attorneys, accountants and more.
“We are actively involved in our companies, mostly by trying to help them, but sometimes serving on their boards of directors, giving them sales leads, finding staff for them,” Clark said.
VentureSouth conducts educational workshops and webinars across the Southeast to introduce people to angel investing and help them understand how it works. About two-thirds of VentureSouth’s members have previously never invested in a startup company before.
“Our plan is to keep growing,” Clark said. “Instead of 550 people in our group, we want to have 1,000.”
History
VentureSouth started in 2008 with the launch of the Upstate Carolina Angel Network. It was founded by Matt Dunbar, Paul Clark and Charlie Banks.
VentureSouth Portfolio
VentureSouth has a diverse portfolio of companies it invests in with several based in Upstate South Carolina. Some of these companies include:
- ActivEd
- Atticus Pharma
- Base
- Darby
- GrowJourney
- Kiyatec
- MP Cloud Technologies
- New York Butcher Shoppe
- Servosity
- Sharpen
- Treis Blockchain
- Zipit Wireless
- Zylö Therapeutics
- 6AM City
Upstate Upstart List
VentureSouth helped launch a new initiative called Upstate Upstarts List in July. The list currently highlights nearly 100 startups and early-stage technology companies located in the Upstate.
Paul Clark, co-founder and managing director of VentureSouth, said the list offers a central place for outside investors to find companies they would be interested in working with.
“It’s also a way for those companies to learn about each other,” Clark said.
