Editor’s note: Jim R. Roberts has been working for 22 years in North Carolina with entrepreneur support organizations in Charlotte, Asheville, Durham (COIN) and Wilmington. He is a regular contributor to WRAL TechWire.
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WILMINGTON – “If startup entrepreneurs are the engine of the American economy, capital from Angels and Venture capitalists is the fuel” is how Patrick Gouhin started our event in Wilmington, NC on February 24. Pat Gouhin is the Executive Director of the nationwide Angel Capital Association and an active member of the North Carolina ecosystem because he lives in the Raleigh area.
Our recent monthly startup event involved Pat Gouhin giving opening remarks about the impact of capital on communities and then moderating a RIVERside Chat between the most active investor in North Carolina, David Gardner of Cary based Cofounders Capital and one of his portfolio companies and entrepreneurs based in Wilmington, Charles Davis of EasyVote Solutions.
Jim Roberts
As the leader of the national / international Angel Capital Association (ACA), Gouhin shared some recent data that for every $100,000 invested by angels in a community can have a $2.1 million impact on the local economy. A recent study in Ohio showed a 66x multiplier of a $100,000 investment on the local economy. This should get the attention of people in the economic development industry to be more inclusive and generous and maybe not dismiss the importance of the entrepreneur support orgs in the ecosystem in the growth of the city.
Since the formal ecosystem started in Wilmington in the Spring of 2013, we have invited over 80 investors from the Triangle, Charlotte and other regions to speak at our monthly entrepreneur events. We call this our Coastal Corridor of exchange of resources as we participate and support regional and statewide organizations to include Wilmington in their growth plans. This is a top five reason why Wilmington is now the third best ecosystem in North Carolina and is now a globally ranked Emerging Ecosystem by the organization called Startup Genome.
WHY?
While Wilmington has made strides in our regional startup ecosystem since 2013, we still have work to do to improve the relationship between local and first time entrepreneurs and our high net worth individuals who could become angel investors or invest in regional venture capital funds. It is no secret that generations of wealthy people have been retiring to the beaches of North Carolina for decades and even more since I-40 was extended from Raleigh to Wilmington over thirty years ago. Let’s be clear here. Not every wealthy person will become or has the risk tolerance to become an active angel investor.
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We knew that nCino was heading towards a successful IPO exit but not many new angel investors were involved with that deal. We really made an effort to push the NextGlass / UnTappd story across the region. And now we need to help the employees of those companies when they are ready to pursue their entrepreneurial dreams with the experience they gained working for great entrepreneurs with management skills. But as we heard recently from David Cummings of Pardot fame and the Atlanta Tech Village, that process of employees to first time founders after an exit event takes longer than most people think.
How to Attract Investors
While we had 148 people registered for this event, there were a dozen investors registered to attend as well. VERY unusual to have that many investors just attend a normal monthly startup event. There were investors from Xelle Ventures, IMAF RTP, Wilmington Investor Network RTP Capital, WALE Angel Network and more individual angels.
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These investors came to the event because they come to all of our quality events through invitation or sponsorship, but also attended to meet Pat Gouhin in his first business trip to the coast and because I had arranged introductions and meetings with David Gardner with local investor group leaders. It helps that Gardner has a nice beach house in the area.
This sounds obvious, but investors have to raise money for their venture capital funds from individuals (Family offices and sometimes corporations) and HAVE to put that capital to work. It may seem that the venture capitalists say no every time, but their investors are expecting big returns way above the lousy interest rates earned in bank accounts.
According to Charles Davis, EasyVote Solutions is now receiving incoming phone calls from investors inside and outside of the region as they find success in selling their multiple products outside of the immediate region. This is an important part of scaling the company as Easy Vote Solutions now has clients in more than 20 states including the whole state of South Carolina for their process of elections software.
Insights From the Event
Sometimes, in the entrepreneur support world, the magic of a great event just happens if you have earned a great network of professional friends. In Asheville around 2005. I invited Steve Nelson, Jud Bowman and Robert McMahan of NC Department of Commerce to Asheville to do a Fireside Chat at my Carolina Connect Entrepreneur and Investor Conference.
Steve Nelson was a venture capitalist from Charlotte with the Wakefield Group and was also very active at CED in Raleigh. Jud Bowman was a very young entrepreneur when he started a company called PinPoint Networks. He actually became an entrepreneur while still attending the North Carolina School of Science and Math. The energy of this event was truly magical and may be the best event I have ever led in my 22 years of working within the North Carolina ecosystem. The crowd could not believe a SERIOUS investor put millions of dollars into an 18 year old entrepreneur.
So I decided to recreate this event in a RIVERside Chat in Wilmington to help the many first time founders at the coast that there can be a positive relationship between the entrepreneur and the venture capitalist.
Learned From the Event
- Entrepreneurs need to hear feedback about their startup idea from OUTSIDE the friends and family. Sure you need the positive love and support of your friends and family, but before you approach an investor, you need to share your value proposition with people who will not feel bad about challenging your assumptions about the potential of your business.
- Entrepreneurs need to understand that the check is not written on the first meeting with the potential investor as this can be a long process. Charles Davis of EasyVote Solutions talked about meeting David Gardner at one of our Wilmington events and getting a lukewarm response. But as Charles kept in touch and the company met milestones in sales growth, the relationship improved and eventually led to an investment.
- What are milestones that the startup can achieve to attract more attention from regional investors? Charles Davis said that he was able to get the attention of Cofounders Capital again when EasyVote Solutions was chosen and presented at the CED Venture Connect investor conference in Raleigh. This is something we REALLY push in Wilmington. This is a true validation for your startup to present at these venture capital conferences and beat out the competition of other regional startups to get stage time and if you perform well on stage through preparation.
- HINT HINT – The CED Venture Connect Conference is happening in Raleigh / RTP SOON so get your tickets to attend NOW. And the DigSouth Conference in Charleston is still accepting applications to present in May. And Venture Atlanta and …..
About the author
Jim R. Roberts has been working for 22 years in North Carolina with entrepreneur support organizations in Charlotte, Asheville, Durham (COIN) and Wilmington. Jim is the founder of the Network for Entrepreneurs in Wilmington (NEW), WALE Angel Network and Rojo Octo Ecosystem Consulting. Jim also works with the SEEN Network at UNC Pembroke. Follow Jim on Twitter – @redspireusnc and @91omgbiz
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