If you are interested in helping to close the “capital gap” in South Carolina, here are several ideas (in no particular order) of things we can work on together.
- Donate $1,000 right now to create a Donor Advised Fund at Abundance Capital (in Greenville), and have them invest that in a South Carolina company. Learn more here.
- Steal North Carolina’s idea and use a proportion of the SC unclaimed property fund (of over $700M) to create a co-investment fund like the NC Venture Capital Multiplier Fund.
- Figure out where the proceeds from the SC Venture Capital Act went (latest report we can find), and if there are any residual funds help get them reinvested into another generation of companies. (And if there aren’t any, we need to figure out why so we can learn from our mistakes.)
- Next time the SC Dept of Commerce plans an incentive package for a multinational corporation, persuade them to put a tiny fraction aside to fund small businesses in the local supply and technology chain. Instead of giving Scout Motors $1.3BN in incentives, allocate $1.29BN and put the other $10M into a fund to invest in 10 startup automotive technologies.
- Persuade large university endowments in SC to put 0.5% of their endowments into a fund-of-funds or pool to invest in startups. Furman ($787M endowment, with a 25% allocation to private equity and actual allocation of 21.8%) would be $4M. Add in Clemson, MUSC, and UofSC and that would be a game-changer for SC-based startups and funds.
- Support any of the current capital providers. Try Vicinity Capital right now to “invest where you live” and put $500 into every South Carolina opportunity listed there. Join VentureSouth to invest in any of the four “open rounds” in South Carolina companies our members are funding now. Join Charleston Angel Partners to see their deals.
- Instead of paying for season tickets this year, donate to a South Carolina university to create a student-led investment fund, like Wofford's James-Atkins fund. Don’t forget to allow the flexibility to invest in local startups, not solely distant public equities, as this fund can and has done successfully.
- Get the SC Retirement Commission to invest 0.1% of its $40.6BN of assets into local funds. Another check to KKR, General Atlantic, Providence, or other large PE funds is fine, but carving off $4M from the next $4.3BN of private equity (per its annual report, p.99) could generate strong returns AND impact the local economy where the retirees live.
- Join the Upstate Upstarts Fund today (or make a donation to Venture Carolina that it can use to fund it) – or send the Upstate Upstarts List to every venture capital group you know is seeking investment opportunities in the southeast. There is no reason the Triangle Tweener Fund should be bigger than the Upstate Upstart Fund. Or help Rolling South leverage its initial foray into Angellist syndication to bring more “online” investors to the southeast.
- Help Founderville make their second fund $50M instead of $6M. Use your Wall St connections to bring in some ultra high net worth individuals, small institutional investors, or outside fund-of-fund investors to quadruple the size of the investment firms that are here.
- Convince six South Carolina banks to capitalize a new “equity” SBIC fund (an SBIC fund funded with accrual debentures) with $2M each, and support fund managers getting an SBIC license and 1x of SBA leverage. That creates $24M to invest into South Carolina startups.
- Founders: Go raise money from outside of SC, use it to build a great company and sell it for a substantial sum, then reinvest your wealth into startups in the state. Just like the 2ndF team did in NC. Other markets have more capital in part because their tech entrepreneurs accelerate the flywheel from reinvestments.
- Design a Relentless Challenge Grant application for a way to create new pools of investment capital, rather than new batches of startups. It appears only one of the 2024 awards was for “new investing.”
- Encourage accelerators, incubators, and new venture studios to focus on quality, not quantity. Find ways to collaborate or consolidate startups together, not create another dozen solo-founder firms all doing similar things that cannot raise capital.
- Let's find several non-profits and cities, and collectively apply for the EDA Build to Scale grant -- but one focused on capital provision. SC projects seem underrepresented on here ($50k awarded in Rock Hill in 2023, out of $50M??), and almost all of them are incubation. The projects might be great, but they all worsen the capital gap.
- Sign up at Givebacks and link your credit cards, so that on regular purchases you already make some of the fees get diverted to the charity of your choice. Make "your choice" a charity that specifically helps entrepreneurs or capital formation (like Venture Carolina: here's the link).
For us to close the capital gap in South Carolina, we all have a part to play. If anyone is interested in working with us to promote, improve, and execute on any of these ideas, let us know -- we are open to suggestions and eager to keep addressing this opportunity.