This balances two offsetting requirements.
1) Diversification. We make many investments in North and South Carolina because of where most of our members live – but we can’t invest exclusively in deals in Charleston or Charlotte because there are not enough high quality opportunities in a small geography. Diversification is critical to early stage investing – and that means looking for the best deals across a sufficiently wide area.
2) Supervision and interaction. Angels make money by evaluating companies and helping them succeed. Companies based two states away from our members are much harder to supervise and assist, so reduce our chances of making positive returns.
So we settle on “across the southeast” – with almost all of our investments in the Carolinas, Virginia, Georgia and Tennessee.
We talked more about the Southeastern investment thesis on the Venture In The South podcast, Episode 123 here.