For Entreprenuers

INVESTMENT OVERVIEW

VentureSouth typically invests $250,000 to $1,000,000 in early-stage companies seeking capital to launch or scale a market-ready product or service.

If you are interested in seeking an investment from VentureSouth, please carefully review our investment criteria and pitching process below. If you think your company might be a fit, please review our guidance on how to pitch, then contact us; if not, you can find other potential options on our Sources of Capital page.

Investment Criteria

We invest in companies that:

  • Are based in the Southeastern United States
  • Are led by a management team that is talented, trustworthy, determined and resourceful
  • Are seeking ~$250,000 to $2,000,000 for a 15%-35% preferred equity stake in the company
  • (We don’t invest in common equity or debt, and only rarely in convertible debt)
  • Have initial revenues or are at the market entry stage with demonstrated customer demand
  • Are deploying a business model that can scale with speed and capital efficiency
  • Can potentially generate a 50% annualized rate of return on investment over 3-5 years

Admittedly, securing an investment from any angel group is difficult. We invest in only about 2-3% of the companies that start the process, so the hurdle to clear is high.

We review many introductions each month, so you’ll want to demonstrate a compelling reason for us to proceed with your opportunity among the many we see.  Here are some quick tips to improve your odds:  be prepared, do your homework on how angels invest (check out Venture Carolina resources below), develop a 1-2 page executive summary and a compelling 10-12 page investor deck, and be organized and professional – you’ll already be ahead of the pack.

OUR INVESTMENT Process

INITIAL CONVERSATION

If you can track us down through a warm introduction, that’s your best bet. If you can’t, you’re welcome to send us an email to get introduced. Include your one (brief) paragraph business overview and attach a 1-2 page executive summary and/or a pitch deck. If we’re intrigued with the initial introduction, we may schedule a call to learn more. We do not sign NDAs.

Quick tip: don’t send a lengthy business plan or rambling story

SCREENING MEETING

If we’re still intrigued after the introductory call, we’ll invite you to a (virtual) screening meeting. Screening meetings are held each month for our angels to hear formal pitches from the strongest companies in our pipeline. Screening pitches typically last 12-15 minutes followed by about 15 minutes of Q&A – and the sessions are recorded and made available for our members to review and provide feedback.   

Quick tip: take some time to research how to give a good angel pitch. Try here or here, or come to one of our “how to pitch” seminars.

Note that we will need to agree on investment terms prior to inviting you into due diligence.

DUE DILIGENCE

If there is sufficient interest from our members to move into due diligence, a group VentureSouth staff and investors will conduct a deeper dive evaluation. We’ll review documents, make reference calls, meet with the management team, ask a bunch of questions, and analyze your financials, projections and cap table.

Quick tip: the more prepared and organized you are, the more efficient this process will be. We suggest proactively building a data room in advance for quick access to key documents.

ROADSHOW

If things go well in diligence, you will be invited to make formal presentations to our full membership during our monthly meetings.  Two of those sessions are delivered virtually each month, with the presentations typically including15 minutes of pitch time and up to ~20 minutes of Q&A.  We will also work with you to schedule visits with some of our in-person local market meetings as schedules allow.  

Quick tip: be prepared to answer with honest and concise answers – other types of responses will undermine your credibility and diminish your chances of funding.

INVESTMENT

At the end of the diligence process and road show, our diligence team will present their findings to our members. Hopefully at that point, many of our investors will be excited to invest in your venture, so we will make a capital call, collect checks, finalize the documents with the lawyers, and execute the investment.

At this point, you get two new shareholders (one for our network entity and one for our sidecar fund) – and you can put that capital to work building a great business!

ALTERNATIVE CAPITAL SOURCES

For many companies, angel capital may not be the right fit – and even if it is, our angel investors can only fund a small portion of the opportunities that come their way.

However, there are other potential sources of capital worth exploring if you are launching a new business or growing an existing one in the region. Here are a few suggestions to get started:

Local Capital Providers
Ten at the Top has a great list of capital providers in the Upstate of South Carolina. The SC Department of Commerce has a similar SC-wide resource
In Western North Carolina, Venture Asheville’s startup resources map has some options.

Advisers and Guides
For help in both finding and preparing for startup capital, the SBDC, your local chapter of SCORE, or VentureAsheville’s resources directory should be your first ports of call.

Help for Ideas
We get a lot of requests from people with “an idea” but no desire or time to build a business around them. We suggest you try a place like Edison Nation to see if someone else will work that idea for you.

More Resources
Visit our non-profit sister organization Venture Carolina for additional educational resources for entrepreneurs.

BOOK RECOMMENDATIONS

Homework and preparation is required to raise capital from sophisticated investors like professional angel groups and venture capital funds. Here is our entrepreneur reading list.

Angel Investing

  • Angel Investing by David S. Rose
  • What Every Angel Investor Wants You To Know by Brian S. Cohen

Deal Terms and Structure

  • Venture Deals by Brad Feld and Jason Mendelson
  • Term Sheets and Valuations by Alex Wilmerding

Being an Entrepreneur

  • The Art of the Start by Guy Kawasaki
  • The Lean Startup by Eric Ries
  • Startup CEO by Matt Blumberg
  • The Hard Thing About Hard Things by Ben Horowitz

The Exit

  • Built to Sell by John Warrillow
  • Early Exits by Basil Peters
VentureSouth Managing Directors with CEO of Confidence, Gabby Goodwin. Read her guest blog post here: https://venturesouth.vc/how-gabby-turns-no-into-new-opportunities/

VentureSouth Managing Directors with CEO of Confidence, Gabby Goodwin. Read her guest blog post here.