Local startup incubator RevTech Labs has launched a second capital fund for financial-technology and insurance-tech companies.
The organization has so far raised $1 million of a $50 million fund, according to a filing with the U.S. Securities and Exchange Commission. There were two investors: Dan Roselli, founder of RevTech, and Ken Gacevich, general partner. The first sale is listed as May 2, with minimum investments set at $250,000, according to the filing.
Roselli said he is expecting the capital raise to last about a year to a year and a half. RevTech launched a $10 million fund in early 2019, closing it to additional raises the following year.
"The next goal is to make Charlotte one of the venture hotbeds of the country," Roselli said.
The capital fund is targeting companies in the seed or Series A stages, mostly in North America but potentially in Europe. More than half of the funds will go toward startups participating in the RevTech Labs accelerator program. The rest will go to outside companies. Roselli said RevTech Labs has hundreds of partners looking for co-investing opportunities. In general, each startup would be awarded $250,000 to $500,000.
Charlotte has had few options historically for early-stage capital. Gacevich referred to it as a New York mindset — firms like to keep growing the size of their funds, making smaller deals more difficult. Doing a $500,000 deal is about the same workload as a $500 million deal, he said. Big institutional investors here are also less likely to take risks associated with early-stage startups.
"I think Charlotte is unique in that it has lots of money, but it came from a command-and-control growing up in the banking industry," Roselli said. "When you need a $25 million or $50 million check, there are lots of places to go in Charlotte, but when you need your $1 million or $5 million check, that's harder. And that's part of what this fund is hoping to solve, at least in the fintech and insurtech space."
Roselli said he has seen improvement over the years. His organization tries to leverage partnerships to connect the large and small players.
The venture landscape has changed during the last couple of years, said Andrew Hicks, a new principal at RevTech Labs Capital. Deal flow was previously limited to the New Yorks or Silicon Valleys. However, those barriers are starting to come down. Venture capital funds are popping up in emerging markets, he said.
Covid-19 also sped up the trend, as people become more comfortable with remote investing, Hicks said.
