As the Upstate Business Journal discussed last week, tech startups face an uphill funding battle in the Upstate. Can’t argue with that: raising early stage capital, anywhere in South Carolina, is a long, challenging, dispiriting, and uncertain process.
Tech and software companies here undoubtedly struggle because of the historical, and continuing, expertise in manufacturing, textiles, and other traditional and tangible businesses. (Of course, without those there wouldn’t be anyone investing in other things.)
And it is difficult to attract new investors to a new investment method without success stories. Those we already have – Proterra, Avadim, Sabal Medical, Selah Genomics, The Iron Yard Academy, and others – tend to be more tangible technologies or recognizable business models, and early stage software company funding from local investors really isn’t going to take off until big wins increase the momentum on the flywheel.
Lots of things to agree with in an overall cogent analysis.
But there wouldn’t be much point in posting simply to agree with everything you read, so one quick nit:
“If you look at those startups around Greenville, and those who have been able to get to be a high-growth company … every single one of those raised money outside of Greenville.” Well, may be true for some companies – but what about SCAN portfolio companies Growjourney, TipHive, ActivEd, Servosity, and Crowdr.tv? All software or consumer (with significant underlying software technology) companies, all from Greenville, all funded locally (at least in part, and often entirely) in the last year, and all already high-growth companies.
Yes, it’s an uphill battle – for all companies – and, as Eric notes, it shouldn’t be too easy. For a state as relatively poor and rural as South Carolina, you could argue we have a surprisingly active, sophisticated, and effective technology investor base. With 225 investors in SCAN evaluating these investments, including those coming from Greenville, the gradient is not as great as you might think.
Still, the GOOGLE (Get out of Greenville and Look Elsewhere for funding) method Logan coined is definitely good practice: getting a diverse set of investors with different skills is sensible, even if you could raise all the money you needed in one town. But companies with the BING approach (Better Innovation, No Grumbling) and a BAIDU (Being Active In Demonstrating Uptake) attitude to your MVP do have a shot at the YAHOO (Yet Another Highly Oversubscribed Offering) result even here.
I’ll be here all week (working on the DUCKDUCKGO entry).