The Playbook: an Early-Stage Proposal [ILM <> RDU <> SFO]
If you take nothing else from this:
There is talent coming out of RDU (UNC, Duke, NC State) that would like nothing more than to move to ILM and build a company. SFO happens to be bringing you this playbook and a better chance of finding and attracting them, as well as a select supply of seasoned Bay-Area entrepreneurs open to a change of scenery (and stress-levels). And let us not forget the local #Wilmingtonians that deserve their shot at founding; if only the appropriate, time-sensitive nurture/support is applied. Why do you think Silicon Valley is the place we all know? It’s because there are more credentialed founders in a position to give advice to a different version of their former selves, and the financial instruments exist to incentivize the guidance. NEWS.FLASH: the instruments are all the same, or at the very least accessible.
The reality: seed- and early- stage investing in SE NC could use an upgrade. It is time to turn up the dial on Wilmington’s startup scene [or yes, you can insert ‘ecosystem’ here if that’s your preference]. Call it what you want, there are better rates of return to be designed, it starts by getting more talent on the ground working heads down.
‘Why listen to @jshack?’ The main difference, this decade-long SFO resident was born and raised in ILM and educated in RDU (#GoHeels). I challenge you to find a better ‘cultural’ fit for what I propose, for what I am going to start laying out for you right here. And to be quite frank, if any of my inclinations/research motivate you to mobilize and give it a go yourself … by all means. SOMEONE NEEDS TO MAKE THIS HAPPEN.
The MONEY: Standard Issue
Priced rounds: $50K for 7.5% to start. Accompanied by the option for an additional $50K for another 2.5% equity given certain company milestones are met in the first 6–12 months. We would be looking for businesses w/ $3–4K MRR in a position to convince they could turn that into $8–10K MRR w/ a seed-stage infusion of operating capital. This translates into a $1M valuation for founders, and a far more advantageous position to raise $2–10M on favorable terms (when necessary).
The SPACE: a New Port
Convince Mr. James Goodnight that one of his floors/buildings on S. Front St. would serve well as a startup space. Pricing model specifics aside, NET RESULT: downtown Wilmington would have a destination for those [interested] in Southeastern North Carolina that are serious about starting something. And for good measure, let’s expand that range from Virginia Beach to Charleston, or to Ocean Beach for that matter. From SAS to SaaS, going full circle, a wonderful development. To start, a space that could expand into our first three investments.
The OPPORTUNITY: coming to a town near you
Right now ILM has one IPO coming down the pipe, and some #oldmoney along for the ride. What is now two major local stakeholders and a few affiliate players, will be a dozen soon enough, mark my words. And for those in the game of maintaining power structures versus opening up more opportunity for local founders in their own right, you’re going to lose that wager. Wilmington and Wrightsville Beach are too prime a destination not to warrant many more successful creators-in-action, not just those that have retired to Wrightsville and Figure Eight to enjoy their boats and the Sun. It is time to systematically invest in early-stage companies, not just some hodge-podge, chance-ridden tactic to wait on the very few that get there by themselves. It is hard enough to start and build a company, the very least we can do is programatically lend support to the founders that warrant it.
Frankly, the strategy of jockeying for position to invest in companies that no longer really need YOUR money is practically an ancient philosophy at this stage. It’s amateur, or at the very least not conducive to arriving at far more successful outcomes. That, in the end, is what I want this proposal to represent, turning up the dial on successful outcomes. How do you do that? You HELP them thru the hardest stages, and then you up your investment in those that are fortunate enough to scale to A & B rounds. If you’re too risk averse to play in the beginning, then perhaps you should pick a different game. I hear buying franchises still works. ILM is due for a more sophisticated approach.
An anomaly of a businessman that happened to make ILM his home has changed the local game. I tip my hat by most all accounts, but this is bigger than even him. A plethora of deep-pocketed $250K+ angels exist, they are not however finding the number of local investment opportunities as they should. They know not enough LEAD investors. Why? Because the status quo in my hometown is to wait outside the jetty for the relatively few startup vessels that manage to make it to open water. I’m talking about funding the estuary, a startup wetland that will produce far more viable ships to potentially invest in. ‘Slow and steady’, ‘stay the course’, … what is this, living archaeology? Consistency certainly still has its place, but more-so in how you test and learn faster than in some 20th Century pretense of business acumen. We NOW live in the age of blockchain cryptocurrencies and AI-optimized information systems, of automated infrastructure and predictive analytics; the data don’t lie. Look around, our World is changing, ILM included.
There are local and future Wilmingtonians that deserve their shot, and I would like to help give it to them. They need seed capital, and Wilmington needs more GOOD jobs. There is a lot required in between those two events, but this is how it begins. You can wait on ‘organically’, my money is on programmatic.
The SETTING: as good as its characters
There has been major tech headway in the Triangle (RDU) since I graduated from Chapel Hill. American Underground and HQ Raleigh immediately come to mind, not to mention the numerous startup organizations and Departments associated with the fore-mentioned universities. And speaking of downtown Raleigh and hometown heroes, IBM Redhat and Citrix Sharefile both more than qualify. To suggest I wouldn’t work to maintain that these two factor into the teams assembled in ILM would be misleading, and hey, what better indicator than a couple of angel checks from amongst the ranks to ensure alignment? It would be my goal. (Congrats to the Redhat Team for making #BigBlue pay a premium, and congrats to IBM for acquiring such a relevant piece of the puzzle [not to mention Ansible & CoreOS #hollaback].)
And in Wilmington (ILM), entities like TekMountain and the Untappd crew are simply put: getting it done. There are some forces coming together, and once the nCino-earlies get paid (Apiture aside), they’re going to want to do two things: 1) start companies and 2) invest in them …
SFO? Well, she’s dealing with her own #growingpains at present. Exports are up though, as are price points. The vantage point on the other hand, is all but universal, or at least planetary. All systems go, towards the omniscient, redefined infrastructure we all call access, and nothing short of a new era for humankind.
It would also be misleading to suggest I have not considered the political discourse inherent to what I want to do. But at the end of the all heinous vitriol our nation is currently being instigated to constitute, we NEED to find a way to unite again. I can help with that as far as NC and CA are concerned, if ever so slightly. Startups are a great vessel, and you can believe me when I say I’m MORE than willing to engage.
HOW exactly?
With more miles between ILM and RDU than I care to speculate on, and realistically, the same in the air between SFO as well. I KNOW developers that need a break from the Valley. Once the word is out that there’s a beach-side ‘Shire’ of sorts where earned credit in the Valley translates into a disproportionate amount of actionable expertise, then I think the saying goes: #GameOn.
You have an Eden and you’re scared of tarnishing it, I get it. I was born there. I learned to surf at Wrightsville. I was there when Teenage Mutant Ninja Turtles debuted, and when Dawson’s Creek was the rage. Forest Hills Elementary, DC Virgo, and New Hanover High School [shout out to Goodnight Sr.] helped shape who I am. But so have opening for Elon (as a sponsor) and shaking hands with Zuck (amongst hundreds at the first F8). It’s not name-dropping, it’s getting to the point as directly as possible. There’s not time to waste, and why would you want to? The future and whatever version of -eating-the-World you choose to subscribe to stops for no one, I’m simply offering a candidate fluent in both Silicon Valley and SE NC. People are moving to ILM, that’s a fact, the question is: who’s invited?
Some examples of early-stage excellence: I knew Wildfire Interactive when they were 3 people at TC50, I knew the first developer at Flipboard before he was the first developer at Flipboard, I helped Hootsuite when an extra monitor made a difference, and I was there to meet with Digital Ocean the day after they graduated from TechStars. This is four of scores of examples. Notable investments we made at the Citrix Startup Accelerator included Nukona (acquired by Symantec), Iron.io (acquired by Oracle), and TidalScale (TBD). The point is I know what this looks like, at the highest level. We ALL have our strengths (and weaknesses), I want to start lending mine to better ILM (and NC overall).
I CAN find founders worth investing in, and I’m looking for those courageous and like-minded enough to invest in this opportunity, and also this cause: helping NC entrepreneurs decrease their risk profile as systematically as possible. As one of your local heroes said after I thanked him for what he is doing for Wilmington: “We’re just getting started.” It would be an honor to play my part, so let’s get on with it already.
WHAT now?
Do I wanna know everyone’s 2¢ on my critique? Not really. Who I do want to hear from are those informed or invested enough in ILM to understand the truth in my words. What I am looking for are anchor LP’s: one in the Bay Area, and one in NC (RDU if not ILM). From there, my intuition asserts a considerable amount of high net-worth angels in New Hanover County would appreciate being briefed on the investment opportunity. Call it a hunch, a HAPPY hunch. Silicon Valley level talent plus Wrightsville Beach quality of life equates to a mutually beneficial arrangement, one that we ALL can be proud of.
If you are one of the fore-mentioned ‘boat & Sun’ retirees, if you find this message, if you understand what I am saying, and if you want to DO SOMETHING about it; this is me and I approve this message.
[Go ahead, read it again. #SoftwareisEatingtheWorld? #EntrepreneursareEatingtheWorld!]
