There’s a recurring phrase on the website of VentureSouth, an early-stage venture capital firm located here in Greenville. The phrase is: “Make Money. Have Fun. Do Good.” While it’s certainly succinct, the phrase defines what VentureSouth and its 300-plus investors do.
VentureSouth operates “angel” investor groups, or high-net-worth investors who provide financial backing for small startups or entrepreneurs. Since 2014, VentureSouth has invested more than $50 million in 75 different businesses, from biotechnology firms like Altis Biosystems and CharlestonPharma to software companies like ThreatSwitch and MemberHub.
Groups that invest in startups are called “angels” because they’re typically putting their money into unproven, higher-risk ventures. But Matt Dunbar, the managing director of VentureSouth, says that it’s his company’s job to make those investments as safe as possible.
“We have to make money in order to make this business model viable,” he says. “And that’s a hard thing to do in early-stage startup investing. So we try to be as diligent as we can be about our processes and our approach so that ultimately, our investors can make money. If they can’t do that, then our model won’t be sustainable, and it’s bad for our customers and also for entrepreneurs.”
So that’s the “Make Money” part of the equation. But what about “Do Good” and “Have Fun”?
Dunbar says that both of those come into play when experienced, wealthy investors work hand in hand with startups.
“We think people continue to engage with VentureSouth because it’s fun on a number of levels,” he says. “It’s partly because these individual investors get to be hands-on with the companies, unlike investing in a public company where you’re reading documents and listening to teleconferences. Our members have the opportunity to directly engage and share their insights and help coach and guide and provide resources to these companies.”
Working with these fledgling entrepreneurs also gives investors a chance to give back and contribute to the economic prosperity of their communities; that’s where “Do Good” comes in.
“We’re allowing our investors to share their experiences and insights with entrepreneurs and help them create enduring businesses,” Dunbar says. “We help them create financial gains for themselves and their employees and their communities. We know that net job growth in the economy comes from young companies that grow quickly. And ultimately we’ll be able to scale them up to create the jobs and growth that we all want to see in our local economy and our local communities.”
- Despite a rocky economy during 2020, VentureSouth had a strong year, announcing it had invested $9.2 million in 26 early-stage companies. “We were coming off a really strong year in 2019,” Dunbar says, “so we did take a step back in 2020, but certainly not as drastic a change as we feared we might be in for when the pandemic started.
- Dunbar says that the firm was able to weather the storm in 2020 by concentrating on its existing investments rather than seeking new ones. “Like a lot of other early-stage investors,” he says, “we immediately started to really dig in on our existing portfolio of companies to understand where their challenges were and help them navigate things like PPP loans and fundraising activities that they needed to raise capital.”
- VentureSouth operates several “angel groups” of investors in North Carolina as well, including groups in Charlotte, Asheville, Fayetteville and Wilmington.