CHARLOTTE—Even though a focus on startups and entrepreneurs is on the rise in Charlotte, the Charlotte Angel Fund has yet to invest in a single Charlotte-based company. But that may soon change, says Fund
Administrator Greg Brown.

So far, six of the Charlotte Angel Fund’s investments went to Triangle-based companies, even though a quarter of the pitches the Fund heard at its second Wednesday of the month meetings last year were from Charlotte companies, Brown told WRAL Techwire.

The Charlotte Angel Fund has from 55 to 60 members, 20 of them bankers, Brown said. “It’s fun to see them react. Every company we ever looked at is shockingly early for them, far from any company they would have engaged with in their professional lives. So it’s fun to expose them to that.”

In a way, Brown said, Charlotte is over supplied with capital – just not specifically for startups. “People accumulated their wealth in businesses and ways much different than the types of businesses startups tend to pursue. They’re accustomeed to real estate, banking, and textiles, not software or medical tech.The most comfortable thing to do is invest in things like the ones you were successful with and at what created wealth for you.”

Part of the benefit of participating in the Fund is that its members get exposed to new ideas. “Once a month they hear entrepreneurs pitch this thing that they’re passionate about, things they never would have been involved with in their professional lives. Part of what I love about the fund and entrepreneurial scene in general is exposing people to ideas different from others in their lives. It forces you to examine your ideas.”

Do I have to move from Charlotte to get funding?

At the meetings, they hear a 10-minute pitch followed by a 10 minute question and answer period with the fund members. The events run from 6 p.m. until 8 p.m. and include a 30-minute networking session before the pitches.

Brown said he is frequently asked by entrepreneurs, “Do I need to move from Charlotte to find funding?”

“Fact is, if you build something of value, something good to extraordinary, capital will find you. If you’re going to be mediocre, you might do better elsewhere. Capital is searching for good investment opportunities.”

He added, however, “Raising money should not be your goal or objective. It’s a means to accomplish something. You may never raise outside capital. It’s not the thing that anoints you as a worthy company. Lots of good companies get by without venture capital and lots with VC fail.”

Brown admits Charlotte remains a risk adverse community in general in business, socially and otherwise, but said, “That’s modifying. I think a lot of that is changing. We’re seen in Charlotte and elsewhere in the Carolinas as being a desirable place to live.

Exponentially more entrepreneurial energy now

“We’re seeing a migration of people to Charlotte, many bringing experience and success in entrepreneurial communities with them. It’s infusing Charlotte with that, helping it develop its own entrepreneurial community at a sped-up pace.”

It’s still unlikely, he said, that “The people living at Quail Hollow are going to wake up tomorrow and say we need to light a fire under the entrepreneurial community. It will be the folks living in the South End in their late 20s to their early 40s who care about this and prefer not to work in a bank.”

While he sees a lot of momentum in that direction, he echoed what others have told WRAL Techwire in this series. “It needs to be better coordinated.”

Still, he added, “The amount of energy working on the development of an entrepreneurial community is exponentially more than it was six or seven years ago. Terry Cox (head of the Charlotte Business, Growth and Innovation Council, BIG) was the genesis of a lot of that.

Cox, interviewed in an earlier article in this series, has helmed BIG and its predecessor for 12 years and was stoking that proverbial fire under the entrepreneurial community for the entire time.

A sense of vibrancy

Regarding the newer groups, from HQ Charlotte, the third in the HQ Communities begun with HQ Raleigh, and including the newest, StartCharlotte, “All have a sense of vibrancy,” Brown said.

While the Charlotte entrepreneurial scene is achieving some success with software and marketing and data analysis startups, it is likely to see its greatest success in financial technology, Brown said.

“You see companies all over the place, really, except for biotech and healthcare. But fintech is a natural thing coming out of a banking community. “You want to choose to play a game you have a chance to win,” Brown said. A lot of people think not having a medical school is a problem. I don’t care that we don’t have a medical school. We’re not investing in biotech or medical tech. We don’t have a lot of knowledge in that area and don’t understand it on a fundamental level. “

More cohesion needed

He said the community is also somewhat biased toward B2B rather than B2C startups. “Business to the consumer is much tougher for us. We’re much more comfortable predicting the behavior of a business than whether people will embrace the next social media thing, the next Instagram.

“We can’t predict the decision process a 15-year-old uses to decide which social media to use. Our members are more comfortable thinking about whether a bank would use software.”

For the future, Brown said, “We certainly need to be more cohesive. To the extent we’re better coordinated in our efforts, we’ll get more effect for the energy expended.

“HQ Charlotte is a good thing. It creates a physical focus for the entrepreneurial community. StartCharlotte as well.” But while he said he’s happy to see the Greater Charlotte Chamber make statements in support of developing an entrepreneurial focus in the city, “I’ll be happier when there is some evidence of that resulting in some material effort or benefit.”

For the previous stories in this series on the Charlotte Entrepreneurial scene, see:

https://wraltechwire.com/entrepreneurship-focus-on-the-rise-in-the-queen-city/16126736/

https://wraltechwire.com/advice-to-charlotte-startups-go-after-mid-to-large-sized-companies/16129498/

https://wraltechwire.com/how-a-building-supports-charlotte-s-entrepreneurial-ecosystem/16133014/

https://wraltechwire.com/charlotte-entrepreneur-survey-reveals-strenghs-and-weaknesses/16129676/