No special party room. no favors, balloons or cupcakes. But a fifth birthday celebration, just the same. And similar to the one you may remember from your childhood, it’s a special occasion – a real milestone. A rite of passage.
The Upstate Carolina Angel Network (UCAN) is observing just such a birthday, as it embarks on its sixth year of investing in early-stage companies. Fifty members strong, with a total of $7 million invested in 26 companies, UCAN is justifiably proud of its first five years.
“We’re a startup, too,” observed co-founder Tim Reed, managing partner of Margin Holdings, who along with J.B. Holeman, founder and president of Holeman Investments and CEO of Oversight Inc., launched the organization in 2008 with support from the Greater Greenville Chamber of Commerce. “Five years is a big hurdle, and we’re very pleased to have attracted new investors, retained many who started with us, kept our outstanding managing director, and helped some talented entrepreneurs.”
And don’t think those entrepreneurs aren’t grateful. “What UCAN has done is wonderful,” says New York Butcher Shoppe CEO Jim Tindal. “UCAN is filling an important economic development niche and deserves a big ‘thank you’ from everyone in the Upstate.”
UCAN galloped to the capital rescue of New York Butcher Shoppe when the recession slowed its early growth. Now, the nine-store chain, located in North and South Carolina, Georgia and Alabama, is on track with lots of expansion opportunities, according to Tindal.
Similar appreciation comes from RidePost co-founder and CEO Marty Bauer, whose company offers an online marketplace, connecting drivers and passengers for safe social ride-sharing. “UCAN’s contribution is sometimes overlooked,” Bauer observes. “But not by companies like ours. UCAN is made up of successful people and I’m blown away by their generosity in sharing their business expertise and remaining accessible to us. Their executive director, Matt Dunbar, has been as committed a mentor to me and the company as anyone could hope for. He’s really gone beyond the obligations of his job.”
No surprise: UCAN’s own members are similarly enthusiastic about the organization.
“I find it energizing and educational to be around entrepreneurs and other UCAN members,” notes new board member Michael Cinquemani, president and CEO of Master Power Transmissions. “Being in the company of such ingenious people and hearing their plans to go to market stimulates my own ideas.”
“I’ve been able to learn more about making these types of investments from my involvement in UCAN, and I benefit from the collective wisdom of the group,” says Christopher Brotherton, corporate vice president of Ortec Inc.
Sydney Taylor, a senior executive of Canal Insurance Co., was present at the group’s creation because she was interested in the concept and wanted to see what it would be like as an alternative investment vehicle. “I really didn’t know what to expect,” she says. “But UCAN has exceeded all of the expectations I didn’t have!”
An investor in the group’s singular exit to date, Sabal Medical, Taylor and her fellow investors made a handsome profit. UCAN is careful, however, to manage expectations when it comes to the odds for such a reward, as roughly half of angel investments lose money – but across a well-diversified portfolio, expected angel returns can be north of 20 percent over five to seven years.
“Every meeting excites me,” says Reed. “I go with no intention of investing. Yet I sign on, every time.”
The other thing members invariably agree on is that managing director Matt Dunbar is the organization’s fulcrum. They can’t say enough good things about him.
UCAN lives up to its slogan: “Make some money. Do some good. Have some fun.” Startups seek it out, economic development entities respect it, and the referrals keep coming. Its format is simple: screen prospects; allow a select number to present at the monthly meetings; vote as a group on those meriting duediligence; carry out that diligence using the expertise of members and the director; present the findings; and allow members to invest or not, as they choose. There’s no pressure.
This coming year could prove to be a big one for UCAN. It got the frosting on its birthday cake just recently with the South Carolina Legislature’s enactment of HB 3505, the High Growth Small Business Access to Capital Act, which provides a 35 percent state tax credit for angel investors. The organization is also hoping to exit a couple of its investments this year.
Apparently, there’s plenty of room for investing with UCAN. It’s estimated that there are some 115,000-120,000 accredited South Carolina households that meet the SEC’s standards of high net worth for the purpose of such investing.
On the horizon, then: a larger, matured UCAN with a continued dynamic impact on the state’s economy and a bunch of “happy camper” entrepreneurs like Tindal and Bauer – any one of whose companies may become a household name, based in Greenville, S.C. If you’d like to be a part of UCAN’s next five years, just contact Matt Dunbar at matt@upstateangels.org or 864-751-4805.
