We have a guide to the kinds of investments VentureSouth groups make in our “For Entrepreneurs” section. Even so, every day we receive an email with an investment proposal that clearly does not fit our criteria.
So I thought it might be useful to add what we will not fund. There is no point sending us a business plan for these kinds of opportunities: at best, we have the time to say “no thank you;” at worst, you get no response while we focus on opportunities that do fit, and you waste your time applying.
If you need $250,000 to $750,000, call us. If you need $5,000 to $50,000, or $10 million, do not. (Try other sources.) If you don’t know how much you need, don’t call us yet: get some advice (some of our partners, like SCORE Asheville, can help with this), develop your plan, test your ideas, and then call us.
Valuation and deal structure
We fund “angel rounds.” This generally means the first money you raise outside of your friends and family. If you have already raised and spent $5 million, we can’t help you. If you raised family and friends money at an implied valuation of $5 million, we will most likely pass. If we multiply the implied post-money valuation of this fundraising by 10 and the result is more than $100 million, we will pass.
We invest in preferred equity. Convertible notes, loans, common equity, grants, investment funds… need not apply.
Stage and team
We fund teams executing a clear go-to-market strategy for a product or service that has some proven customer validation – ideally some initial revenue.
If you’re a one-person management team, we aren’t the right partner. If you’re a “want-to-be-inventor,” we’re not the right place; if you’re an actual inventor with a patent but no commercialization plan or team, do some more development, then call.
We invest in companies that we can drive to from one of our groups. In Georgia, Tennessee, South Carolina, or North Carolina? Call us. In Brazil, Mexico, London, New York? Don’t.
We have not, and will not, fund movies. We like watching movies, but angel groups do not fund movies.
If your business is a mobile app that requires significant adoption, we’re very unlikely to be interested. These are very hard.
Sorry, we’re not going to fund any business plan with the phrase “The Facebook of [xxx]”.
Starting a hair salon, a dog parlor, food truck, pizzeria, fast food franchise, a brewery, or some other kind of “bricks and mortar” store? Sorry, we are not the right place.
If your funding need passed through those hoops, wait for the next blog post to see if you fit.