THE BUSINESS OF A LIST - Upstate Upstarts List Gives Investors Easier Access To Early-Stage Tech
Kathy Laughlin
5 min read
When is a list more than a list? When it’s a tool that could boost a startup company in the Upstate.
That’s the purpose of Upstate Upstarts – a directory of homegrown, very-early-stage technology companies that have growth potential and might be looking for investors.
The list, compiled by investment companies and nonprofit organizations that scout and support startup companies, includes more than 100 diverse entrepreneurial efforts based in Greenville, Spartanburg, Anderson, Oconee, Pickens, Cherokee and Union counties.
“It's a stand-alone, community-led collaboration and partnership between people who want to see the startups here in the Upstate receive the recognition that we think they ought to get,” says Paul Clark, Managing Director of Upstate Upstarts.
Paul Clark – a founder and a Managing Director of VentureSouth – has helped create a list of technology startups in the Upstate.
“Greenville is a pretty hoppin' place for technology startups. I don't think that's generally recognized. We hope that the list helps people realize that a bit more.”
Companies on the list are working on software, hardware, tech-enabled services, digital brands, e-commerce and life sciences. The list does not include retail, hospitality, professional services, or real estate ventures.
“We included companies developing therapeutics and medical devices. We have companies doing intricate things that spin out of Clemson's science teams,” Clark says.
Another business might be creating software that helps people find activities for their children. “That’s not super techie. You've built software, which isn't easy,” he says. “But it’s easier than understanding deep science. We wanted to cast a wide net so people can find things that fit their interests.”
Reared in England, Clark worked in London and New York City before moving to the Upstate in 2009; his wife teaches at Clemson University. Clark’s career had been in investment banking and investing in later-stage companies for a private equity fund.
“There wasn't a great call for that in Greenville. So when I moved here, early-stage company investing was the closest I found,” he says.
Clark joined the Upstate Carolina Angel Network. He and cofounders Matt Dunbar and Charlie Banks reorganized and rebranded as VentureSouth in 2011.
“We were one angel group in Greenville to start with, and now we're in 20-something cities across the Southeast,” says Clark, a Managing Director of VentureSouth.
“That's my day job.”
VentureSouth has a membership of nearly 600 investors, who have deployed $80 million to support 100 companies that are in a slightly later stage of development than those on the Upstate Upstarts list, Clark says.
(Venture capital is a form of private equity investing and financing for startup companies and small businesses, according to Investopedia. Venture capitalists may also provide technological expertise and managerial experience.)
VentureSouth created the nonprofit Venture Carolina about 10 years ago to teach entrepreneurs how to raise money, understand what angel investors are, and how deals might be structured. Educating people who want to invest is also part of the organization’s mission.
Clark says the number of companies seeking investors far outpaces the number of people who invest.
“Our biggest challenge is finding enough people who want to invest in startups. Most people don't. That's totally fine,” he says.
The Upstate Upstarts list might inspire interest from investors or serve as a resource for people who want to learn about local startups, Clark says. “These companies do good. They cure cancer. They create jobs. They create wealth for people. They solve people's problems. They do good things in the community.”
To make the list, companies must be located in the Upstate and produce $150,000 in revenue or have at least eight employees. “Upstate Upstarts is just a project. It's not formally incorporated. People can donate to Venture Carolina to help us build the list and keep it up to date,” Clark says.
The initial goal of Upstate Upstarts was simply to create a list and watch to see how people use it, he says. “The second part is to see if we can persuade people to invest in companies on the list – new people who are not part of VentureSouth and aren't making investments in restaurants or real estate or hospitality.”
An index fund will launch along with the Upstate Upstarts list. “People can put money in this fund, and it will invest automatically in those companies on the list as they begin to raise money.”
The index fund, which would have a diversified portfolio of startup companies, will make it easier and safer for less experienced investors.
“Investing in individual startup companies is a pretty risky proposition,” Clark says. “But if you invest in 10, two will be successful enough to make up for the eight that fail. We wanted to make a sensible way to invest in these startups.”
Federal securities regulations require those who invest through Upstate Upstarts to be accredited by an unaffiliated third party. “Basically, it’s making sure investors are wealthy enough to lose all the money they're investing,” Clark says.
People can also invest through Abundance Capital, a nonprofit venture philanthropy firm in Greenville. Abundance Capital uses donations, and suggestions from donors, to invest in nonprofit projects and companies that benefit the community. Donors get no financial return on the investment but can use it as a charitable deduction for tax purposes.
“We want this to be something that somebody who's not super wealthy could put a small amount of money into,” Clark says. Donors don’t have to be accredited. “You just have to find some value in giving to charity.”
Clark, his colleagues, startup incubators and professional investment firms are committed to helping people support significant projects.
The staff at VentureSouth, from left, Matt Dunbar, Samantha Efird, Paul Clark, Caroline Efird, Molly Vinkler, Dawson Racek, Charlie Banks, Mallory Lucas and Alex Biermann.
“Our goal is to spread the word that you do not have to be a millionaire to invest in this. You don't have to know a lot about tech investing,” Clark says.
“All you need to do is be willing to support local businesses, and this a new way to do that. We think these companies can make a disproportionately positive impact on people's lives and in the community. We want to get community-led spirit behind an investment fund. It's our mission to make that happen.”
