A good startup investor does more than just write a check and wait 5-7 years for the acquisition or IPO. If they want a great return, they become part of the team, attracting other investors and leveraging their professional networks to help the startup create revenue through sales and partnerships.
In areas where venture capital is scarce and the entrepreneurs are inexperienced, the term “vulture capital” can be thrown around dangerously. The fear is that the investor is going to take more of the company than the dollars it’s worth and potentially take over the company and push out the founders. This can be prevented if you network within the community and get to know the regional investors before you begin the company.
When I ran the Blue Ridge Entrepreneurial Council in Asheville, North Carolina, we hosted an annual Carolina Connect conference where we once had a beautiful conversation between rockstar young entrepreneur Jud Bowman, the wise investor Steve Nelson and one of my early mentors Bob McMahan, who was the science and technology advisor to the governor of North Carolina and who served as the moderator.
In this conversation, we had Jud talk about his beginning as the founder of PinPoint Networks while he was still in high school at the North Carolina School for Science and Math. Pinpoint Networks eventually merged with another company and formed Motricity, which had an IPO.Jud has twice been named “Entrepreneur of the Year” in North Carolina. He eventually spun out a new company from Motricity called Appia which was recently acquired for over $100 million, and he recently started a new startup as well.Jud is a serial entrepreneur and now an angel investor—an important part of any startup ecosystem.
Steve, investor with Wakefield Group Venture Capital fund, talked about the realization he was investing in someone well under the age of 21. Steve has had his own entrepreneurial career, including taking Quokka Sports which had an IPO after designing a web site for the Olympics. Steve has also invested in Liquidia Technologies, a very promising drug delivery company in the nanotechnology industry. He certainly played the role of the wise mentor to the young entrepreneur who he could see had a VERY bright future.
The conversation helped people understand that Steve the investor was a very valuable part of Jud’s Pinpoint team, And how do you know that for a fact even 10 years later? Steve has also invested in Jud’s following sequence of startups including Appia and the newest startup, Sift Media.
In the 16 years I have been doing entrepreneur development, this simple chat between three powerful people received the most overwhelming positive feedback.
I have tried to recreate this chat several times, but the chemistry has never been quite the same.
On April 12, I will try again in Wilmington with three really powerful and nice people. You see, the Raleigh/Durham market is booming—some say it’s the second strongest regional economy is the United States—and we are only a short drive away. So, I have created the phrase “the Coastal Corridor,” meaning the short two-hour drive between Raleigh and Wilmington, depending on the weight of your foot on the gas pedal. We know you make business trips to the beach on Thursdays to turn it into a weekend. We are OK with that.
David Gardner is a serial entrepreneur, turned hyper-active angel investor turned founder of CoFounders Capital ($10 million fund) and has an accelerator in downtown Cary. David may be most famous for being involved in PeopleClick (acquired for over $100 million) and investing over $7 million as an angel in the Raleigh/Durham area. David is very bold and direct in his mentorship when he communicates to the startup ecosystem. He goes on sales calls with the companies he is considering investing with. He is also an author of “The Startup Hats.”
Justin Miller is just as unique as founder and CEO of WedPics.com. WedPics is an interesting pivot story which has led to 4 million downloads of his wedding-related app and over $12 million raised, including capital from David Gardner, mentioned above. Justin also owns a new taco related business.
The moderator for this Riverside chat is equally important as he has seen it all. My good friend Merrill Mason has been an active connector in the Raleigh/Durham market for more than 15 years. Merrill is a lawyer with Smith Anderson and friends with both of the other speakers. (Smith Anderson is also a sponsor of the Network for Entrepreneurs in Wilmington )
We would welcome you to attend this event on April 12 if you are curious about our startup ecosystem and the #CoastalCorridor. Or if you just want a spring trip to the beach.