Charlotte-based firm Carolinas Fintech Ventures recently raised more than $2 million for the fund it uses to supply early-stage startups with much-needed capital.
Carolinas Fintech Ventures, founded in 2017 by Dan Roselli, is a venture capital fund that invests in early-stage companies in the financial services technology space. The organization opened a $15 million funding round in January 2019 with a $2.5 million raise coming less than a month later. Another $1.1 million closed in 2020, and, most recently, a $2.1 million raise was completed on Feb. 11.
CFV operates primarily as a seed and Series A fund that gives startups the initial capital they need to get their companies up and running. A portion of the fund's deal flow comes from its proprietary relationship with the Queen City Fintech accelerator by investing in the program. CFV also invests follow-on capital in the accelerator's high-performing graduate startups.
Nat Clarkson, CFV managing partner, said that until the fund's creation, Roselli had been on his own raising capital for the accelerator. Now, Clarkson said, they are in a much better position to offer significant and important capital to early-stage fintech startups.
"The purpose of the fund is to invest into the companies that come through the accelerator but also to do those follow-on investments and some external investments in companies in the fintech investment purview," he said.
Clarkson said CFV has made 67 total investments and deployed about $2.4 million — 40% of its fund — to date. It's invested in a multitude of Charlotte startups including Amicus.io, Catapult and Bundle.
"We have amazing recourse here, in terms of expertise, but they need capital to make it work," he said. "This is some of the most valuable capital there is because it's the hardest to get. We don't write the biggest checks, but we bring together resources to take them to the next level."
Roselli said the creation of a fintech-focused VC to run in tandem with the accelerator programs was a game-changer, especially in Charlotte, which is well known as a banking city.
"Because we are a banking town, we have the typical growth funds in the hundreds of millions of dollars, but what we didn't have here was an early-stage VC," he said. "That closing of the gaps in the ecosystem is critical. For our size city, we don't have as much VC work as we should, and that's one of the drivers for us over the next decade."
