“Nothing ventured, nothing gained” may be a shopworn adage, but it’s entirely applicable to the founding, growth, and regional impact of the Upstate Carolina Angel Network — now known as VentureSouth — during the past 10 years.
Launched in the dark days of 2008 just before the markets crashed, the private-equity network was founded by Greenville businessmen J.B. Holeman and Tim Reed, who saw a significant funding gap facing early-stage companies and decided to fill it.
Holeman and Reed brought in Matt Dunbar, a chemical engineer and management consultant, to serve as managing director of the new operation, and the three began building an infrastructure of accredited member-investors across the Upstate who possessed diverse professional experience.
“The group was formed just before the financial crisis, not as a result of it,” Dunbar said recently. “However, the fact that we didn’t have a legacy portfolio of companies that might have failed during the crisis gave us some time to figure out our model, and while investments were slow early on given all the uncertainty in the economy, the fact that some people were looking for alternatives to the public markets … helped us find a critical mass of investors that enabled us to survive early on.”
Investments started slowly and picked up in 2010. In 2014, Charlie Banks and Paul Clark joined Dunbar as managing directors and the trio launched the South Carolina Angel Network, which incorporated the original Upstate network and some newer chapters elsewhere. The combined group then rebranded as VentureSouth in 2016.
Now, 10 years after the recessionary meltdown and in a climate of robust economic growth, the angel network — 12 affiliates across both Carolinas — continues to infuse companies with sorely needed capital out of its new headquarters at Greenville’s McAlister Square.
During its life, the network has attracted more than 400 past and present members and currently works with 270 participants, Dunbar said during a conversation at the new offices.
To date, he said, members have invested more than $28 million in 61 young companies, with about 60 percent of the dollars deployed in South Carolina. Those five dozen companies also attracted $350 million from other sources and have employed more than 1,000 people.
In 2017, VentureSouth invested a record $4.5 million in 20 firms across South Carolina, North Carolina, Georgia, Florida, and Tennessee, Dunbar said, and closed its second investment fund after committing more than $3 million in member capital.
VentureSouth’s “sweet spot” is an investment of $250,000 to $750,000 in an early-stage company possessing strong leadership, some initial revenue, and a business model that can scale up quickly, Dunbar said.
The goal, he explained, is to generate a 50 percent annualized rate of return over three to five years, leading to a strategic exit.