Veteran venture capitalist Don Rainey of Grotech Ventures represents one of the bigger chances of North Carolina drawing more attention from national venture capital firms.
He’s moving TO North Carolina.
And what he saw in Charlotte at the seventh annual Southeast Venture Capital Conference on Wednesday reaffirmed his decision to move to the Queen City area this June.
While the strength of Research Triangle Park is well known as a tech startup hub – with activity at near frenetic levels the past two to three years – Rainey really likes what he sees in Charlotte.
“It’s really surprising, isn’t it,” Rainey asked about Charlotte becoming a boom town for startups, too.
“Quality comes before quantity, certainly, but great quantity is an indication of quality.”
He talked about the city’s lineup of well-established, growing firms such as Goodmortage and AvidExchange and several promising new ventures made presentations on opening day of the money show. He had just participated on a panel about venture funding when Zerrick Bynum of Charlotte startup Viddlz approached him to exchange business cards and briefly discuss his brainchild.
In fact, five of the first eight early-stage investors were Charlotte-based firms.
Why SEVC chose the Queen City itself points to the area’s rising importance as a place for new ideas. It’s the first major venture event Charlotte has hosted in years. SEVC normally takes place in the Triangle, Washington or Atlanta. But the event drew a sellout crowd of well over 600 people with VCs, angels and others from across the country packing the posh Ritz-Carlton downtown.
Rainey, a general partner at Grotech which is one of the nation’s more substantial VC firms, left Durham-based Intersouth Partners in 2007 and has since primarily focused on the nation’s capital as his investment hunting ground. But he has returned to North Carolina several times in recent months and decided to move the family here once his high school senior son graduates. While the quality of life in the Tar Heel state has great appeal, Rainey also is a believer that the state is a largely untapped market for larger national VC firms. And he sees potential in Charlotte the more he becomes familiar with the area.
“My intuition tells me there is a lot more here than meets the eye,” he explained. “The more I look, the more I find.
“I’m not sure I’m even at the bottom yet. There is a lot of talent in the area.”
Charlotte now has Packard Place, a budding version of its own American Underground in Durham and The HUB in Raleigh as well as the First Flight Venture Center in RTP. The city also has a string of successful ventures, including the aforementioned Goodmortage and AvidExchange as well as growing datacenter services provider Peak 10.
The Business, Innovation and Growth Council – or BIG – is Charlotte’s version of the Council for Entrepreneurial Development. And Frontier Capital, an investment firm, calls Charlotte home. Noro-Moseley Partners out of Atlanta also has a big presence in Charlotte. So even though Charlotte hasn’t been known as a startup hub, it also has hardly been a ghost town.
UNC-Charlotte has a great deal happening on the technology frontier, and the city also has a budding life science sector. Meanwhile, just up the road a few miles is the North Carolina Research Campus in Kannapolis.
So all the ingredients to spark Charlotte to a next level of development seem to be in place.
While SEVC actively recruited local firms to participate and BIG leader Terry Cox actively recruited the conference’s executives at TechMedia to pick Charlotte, the promoters would have looked foolish if they put on a show drawing VCs from across the country in a place where there were no opportunities to go startup shopping.
Rainey is proof that the VC big game hunters might bag some investments that will produce nice trophies – er, exits – to add to their firms’ portfolios.
