An early stage venture fund that has bolstered investment and company growth across the Southeast is looking to start an angel investment chapter in Jacksonville.
The fund, VentureSouth, sees the First Coast as having a “huge amount of pent-up demand,” said Managing Director Charlie Banks, who was recently in Jacksonville to meet with current and potential investors.
“One of the things I look forward to is digging into the ecosystem in Jacksonville,” he said. “I know there are plenty of opportunities to look at it.”
The local chapter is slated to be kicked off with a pitch competition in March, where five pre-selected companies will compete for a potential $1 million in funding.
That competition is the brainchild of Chang Industrial CEO Matthew Chang, a VentureSouth member who has been working since last year to bring the organization here.
“I knew from talking to them about investing in companies that they only invest in companies where they have a geographic footprint,” Chang said. “If we’re going to have them invest in Jacksonville companies, they need to be here.”
Based in Greenville, South Carolina, VentureSouth is in 18 markets across the Southeast, with its most recent chapter being one that opened in Atlanta earlier this year.
In 2020, the company was recognized as a top 10 angel group in North America by the Angel Capital Association. The ranking was based on making 30 investments and deploying $12.7 million in 2019.
Founded in 2008, VentureSouth’s membership includes over 400 investors and has deployed over $80 million in more than 80 companies, according to its LinkedIn page. Members of each of the company’s chapters hold monthly meetings.
The organization already has a few members on the First Coast, Banks said; setting up an official chapter here is a way to bring in more individual and corporate investors.
The fund invests in businesses based in the Southeastern U.S. that are seeking $250,000 to $2 million for a 15% to 35% equity stake. Other chapters include Charlotte, Asheville, and Raleigh in North Carolina; Charleston and Hilton Head in South Carolina; and Richmond, Virginia.
As well as connecting investors and startups, the organization also focuses on training investors, with a curriculum that covers everything from term sheets to exit strategies.
That education, Banks said, has a long-term impact on a market.
“We tell folks often that we are conditioning the local investor base,” he said. “If they make money, they know what questions to ask, they know what type of companies are investable.”
While the fund has been expanding — adding Richmond, Virginia, and Chattanooga, Tennessee — the public pitch competition slated for March in Jacksonville is atypical for a chapter launch. It’s something Chang thought would help in a market like the First Coast, which is geographically spread out and doesn’t have a large-scale incubator that already brings startups together.
That competition will be between five companies picked by VentureSouth, perhaps — but not necessarily — including a Jacksonville firm. The event will be sponsored by the Jacksonville Transportation Authority, JaxChamber and Jacksonville University as well as Chang Industrial.
Chang connected with the group during the early days of the Covid-19 pandemic, when his firm was hired to write workplace hygiene requirements for a client in South Carolina.
After being introduced to VentureSouth, he decided to join: “I decided I wanted to learn more about investing by having skin in the game,” Chang said.
And he knew others in Jacksonville would want to do the same.
While the group focuses its investments across the region, having a group here does not necessarily mean local startups are being targeted — yet.
As investors grow more sophisticated and see a return on their capital, that money is then often invested in startups in their local area, a process Banks said usually takes two to three years.
What VentureSouth also brings, Banks said, is a sense of community.
“It really is a turnkey solution,” he said, with curated deals, regular meetings of investors and more — “everything that is needed to have a sustainable venture ecosystem in a community.”
