VentureSouth, a regional venture capital and private equity firm, launched last week a new rolling angel fund in partnership with AngelList.
Headquartered in Greenville, South Carolina, VentureSouth was founded in 2015 and has more than 400 members and 50 active portfolio companies. The group invested $9.2 million into 26 Southeast startups last year and is on pace to exceed that in 2021.
Paul Clark, VentureSouth managing director, said the fund, called RollingSouth, gives the group more runway to invest in early-stage startups in the Southeast. RollingSouth is a subscription-based angel fund powered by tech developed from AngelList, a company that helps people invest in startups, conduct research and find tech and startup-related jobs.
Unlike a traditional angel fund, RollingSouth is open to the public. Capital will be raised and dispersed on a rolling basis, alongside VentureSouth's capital investments, Clark said.
"We can talk about it to anybody, which ordinarily you can’t do as an angel group," he said. "It’s open to everybody, so you don’t have to be in a VentureSouth group or even in Charlotte. You can join this from anywhere in the world."
Clark said investors can choose to contribute to the fund automatically on a monthly or quarterly basis, instead of waiting for a specific round to open.
"This means we can do a better job of fully funding the companies that want to raise money in the Southeast," he said. "It’s good for the startups because they can spend less time fundraising and more time building what they want to build. I expect a lot of investment exposure as these startups grow."
AngelList launched Rolling Funds last year as an "always-open venture fund to streamline fundraising and deployment for fund managers." Clark said VentureSouth paid close attention to early adopters of the funds and decided it was something that could work well for them.
Clark said the fund doesn't have to reach a minimum value before they can begin dispersing capital. The goal is to disperse $2 million each year out of the fund.
"They built the tech that allows these funds to work so well. Ordinarily you'd have to do the work to ensure the investors are accredited ... This tech allows you to automate that," he said. "It gives investors a lot more flexibility. Rather than writing a check up front and waiting until the next fund comes along, they can subscribe and invest in it more like a subscription."
