Upstate Upstarts Fund provides capital for early-stage technology companies

The creators of the Upstate Upstarts Fund see the season of giving as a time to invest in early-stage technology companies within the region.

Launched this fall, the investment fund provides capital to local startups highlighted on the Upstate Upstarts List. Venture Carolina created this list and the fund in partnership with VentureSouth, the Appalachian Regional Commission and other partners.

The Upstate Upstarts List aims to increase the visibility of technology-focused companies in Oconee, Pickens, Anderson, Greenville, Spartanburg, Cherokee and Union counties. The list features more than 100 startups that each generate a minimum of $150,000 in annual revenue or have at least eight employees.

Paul Clark, managing director of Upstate Upstarts, explained it can be hard for startups in the Upstate to raise capital due to the small number of investors in the area. The Upstate Upstarts List strives to help these companies attract investors from outside the region while the fund offers a way for local people to invest in the startups actively raising capital.

“We thought we could help figure out if there’s an appetite for people to make some impact investments on local companies to both generate positive financial returns, but also to generate well-funded entrepreneurial startups in the Upstate,” Clark said. “That’s something that will benefit all of us.”

Investment strategy

The fund uses an index approach to investing in startups, offering people an easy mechanism to provide capital to Upstate Upstarts companies. Clark said the goal is to attract people to the Upstate Upstarts Fund who don’t already make a lot of investments in early-stage companies.

“We’d like to bring some new people to the table, some new capital, new ideas, new collaboration partners, and bring new talent to the effort,” Clark said.

Clark said the fund is open to anybody, offering avenues of investment for accredited investors along with those who wish to make smaller contributions to their community. Accredited investors wishing to contribute to the fund must make a minimum investment of $2,500. The investors can either choose the individual companies they want to invest in or put their money toward all the Upstate Upstarts companies seeking capital.

People can also make a tax-deductible donation to the investment fund as an alternative to the typical charitable giving done at the end of the year. For investors to make these types of donations, the Upstate Upstarts Fund has partnered with Abundance Capital, a Greenville-based nonprofit venture philanthropy platform. Investors can donate to Abundance Capital’s catalytic fund which will go to Upstate Upstarts companies.

Venture Carolina also accepts donations for supporting the companies on the Upstate Upstarts List. People can make a tax-deductible donation to the nonprofit organization to support the list and fund.

So far, around a dozen investors have made commitments to the Upstate Upstarts Fund. However, the fund’s organizers don’t plan on making investments until they have a reasonably sized number of investors.

Clark said the fund will mostly provide capital to companies alongside other established investment entities or individuals to help make a company’s investment check more powerful. He expects the fund will begin actively investing in companies by the end of the year or early 2025.

“We’d like to be much bigger before we really start deploying that money, but I think we’re off to a decent start,” he said.

Upstate Upstarts Eligibility

Early-stage companies are eligible to join the Upstate Upstarts List if they meet to following criteria:

Based in Oconee, Pickens, Anderson, Greenville, Spartanburg, Cherokee or Union counties
Have a technology basis
Have a minimum of $150,000 in annual recurring revenue or a minimum of eight employees
Have a maximum of $50 million in revenue or 250 employees