Episode 004: Angel investing offers a compelling alternative investment strategy for financial advisors and their clients. It presents a unique opportunity for investors to support early-stage ventures, drive job growth, and significantly impact their local economies. However, this asset class requires careful due diligence, investor education, and a well-structured operational model. By partnering with established angel networks, advisors can provide their clients access to a curated pipeline of potential investments and the expertise needed to navigate this market.
In this episode of the Alternative Universe, Steve talks with Matt Dunbar, Co-Founder & Managing Director of VentureSouth. They discuss the world of angel investing and the importance of due diligence in this asset class. Matt shares how VentureSouth operates, source deal flow, and the diligence process they use to evaluate investment opportunities. Matt also highlights the value of investor education and the importance of diversification in building a successful portfolio in early-stage investing.
Join us as we discuss:
- [01:37] - Matt's background and how he got into the venture markets.
- [07:33] - The founding of the Upstate Carolina Angel Network (UCAN).
- [09:20] - UCAN is the predecessor of VentureSouth.
- [10:27] - The challenge of finding capital for startups.
- [12:03] - The idea of aggregating capital and expanding the network.
- [13:27] - Definition of an angel investor.
- [15:02] - Regulatory requirements for selling securities to investors.
- [20:23] - How VentureSouth handles due diligence with its network.
- [25:01] - Types of vehicles and operational structure of VentureSouth.
- [28:01] - Matt's three key takeaways.
Key Takeaways
- Angel investing requires time and effort to source deals and conduct thorough due diligence.
- Early-stage investing is risky, but diligent research can help eliminate obvious failures.
- Investor education is crucial for understanding early-stage investing and making informed investment decisions.
- VentureSouth leverages its network of investors to evaluate and select the most promising opportunities.
- The goal of VentureSouth is to make money, have fun, and do good by supporting startups and creating jobs.
Quotes
"Our tagline and mission statement is: make money, have fun, and do good. We're really committed to all three of those things as part of our process." ~ Matt Dunbar
"If you really want to get exposure to the early-stage asset class in a non-traditional way that's not just a passive large venture fund investment, you have to be aware of the time and effort it takes to not only source the deals but really do your homework and understand how to approach the diligence." ~ Matt Dunbar
"There's a richness in sharing wisdom and learning with entrepreneurs trying to create new business and helping them navigate the untold litany of challenges that come up for startups." ~ Matt Dunbar
Links
- Matt Dunbar on LinkedIn
- VentureSouth
- Clemson University
- Eastman
- Stanford University
- Boston Consulting Group
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Disclosure
All content on this podcast is for informational purposes of a general nature only, and does not address any particular individual or investment. Nothing in this podcast constitutes accounting, legal, tax, financial or other professional advice. The discussion on this podcast of any entity, product or service does not imply an endorsement thereof, and the podcast participants may have a financial interest, whether through investment or otherwise, in one or more of any such entities, products or services. Please seek independent advice from a financial professional about your investment needs.
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