Upstate angels form investment fund

By Ashley Boncimino
ashleyb@scbiznews.com
Published May 2, 2014

The Upstate Carolina Angel Network announced the launch of a new capital investment fund aimed at high-growth, early-stage companies around the Southeast.

Now open to accredited investors, the Palmetto Angel Fund will co-invest in early-stage investments made by Columbia-based Capital Angels, which is affiliated with Upstate Carolina Angel Network under the recently formed S.C. Angel Network.

Organizers hope to attract $5 million in capital and have already made progress toward that goal, according to S.C. Angel Network co-founder and Director Paul Clark.

"We’re hoping to attract more people to consider investing in early stage-companies,” said Clark, who said potential investors don’t already have to be involved with Upstate Carolina Angel Network to invest in the Palmetto Angel Fund. “We have a group of people who do it frequently in the Upstate and in other parts of South Carolina, but there’s an opportunity at the moment to get more people involved.”

The S.C. Angel Network is a statewide network of angel groups aimed at improving the infrastructure of the entrepreneurial ecosystem via providing early-stage companies with capital. The goal is to bring more investor groups into the network.

An estimated 100,000 households in the state are eligible to be accredited investors, Clark said. Accredited investors are individuals who make $200,000 or more per year, couples who make $300,000 or more per year, or couples or individuals with a net worth of more than $1 million excluding the value of their house.

“If you are in any way a supporter of entrepreneurs and say you want to support your local community, then this is it,” said Clark.

Accredited investors commit at least $25,000 of capital over three to four years in exchange for proprietary access to early-stage companies “with the potential to scale up and generate substantial returns through an acquisition or public offering,” according to Upstate Carolina Angel Network. “Investors benefit from the collective due diligence expertise, industry insights and board level mentoring of the angels.”

“There are many promising startup companies around South Carolina and the Southeast that face a daunting scarcity of early-stage capital in the region, but potential investors have historically faced difficulty in sourcing the best opportunities, conducting diligence and efficiently administering a portfolio of startup investments,” said Upstate Carolina Angel Network in a news release.

Angel investment groups around the country can generate more than 20% in returns per year, according to the group. The Palmetto Angel Fund is not guaranteed to achieve this level of success.

Launched in 2008, the Upstate Carolina Angel Network includes over 50 members who have collectively invested nearly $10 million in over 30 companies primarily in the Upstate. Portfolio companies include Selah Genomics, which recently sold for $40 million to EKF Diagnostics Holdings Plc; American Titanium Works in Laurens County; and Verdeeco, a smart-grid analytics company in Atlanta.

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