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Back to Basics: why private capital?

Paul Clark
Paul Clark
Last updated: January 17, 2024
Venture south fallback

Why individual private capital (not public or institutional funding)?

1) No strings. Grants or other public funding for early stage investment, if it even exists in a particular market, comes with significant strings. These might be obvious (e.g. can only invest in companies in South Carolina – which limits the opportunity for diversification); or they might be subtle (e.g. job creation must be an important element of the investment criteria – which neglects companies able to generate substantial value without necessarily creating jobs). But public money comes with strings that private individuals’ capital typically doesn’t have.

2) No strings – again. Similarly, funding from a large institutional investor comes with implications. A corporate investor, for example, might want preferential services from portfolio companies that may not be in the best interests of the company or other investors. Private individual capital tends to have fewer “other considerations” – and because each individual is writing a much smaller check they have less ability to negatively direct a company.

But of course both public and large institutional investments can be great sources of capital. We don’t have many around the Carolinas interested in investing in early stage companies, so this part of our structure is as much through necessity as choice!