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Agtech in the South Why “AgTech in the South”The Southeast is blessed with attributes that make “agtech” investing a regional specialty. The historical agricultural economy of the Carolinas, Georgia, and Tennessee has been updated with a layer of research-university science (plant biology, animal science, materials science) and a world-class cluster of global agrochemical and life-science multinational companies in RTP. This combination is rare for tech hubs. Nonetheless, there are relatively few agtech-focused investors here. Why, and what opportunities does that give southeastern angel investors?LeVert VenturesIn last week’s Venture in the South episode, Paul welcomed Hannah Webb. Hannah is, despite her protestation, an agtech investing expert, with over 12 years of biosciences business development experience spanning crop protection, animal health, and human therapeutics, including time at Boragen (crop-health boron chemistry) where she helped structure a joint venture and capital raise, and earlier work at Sumitomo on fungicide resistance. She holds an MBA (Technology, Entrepreneurship & Commercialization) from NC State.LeVert Ventures, based in Research Triangle Park, NC, is one of the few funds dedicated to early-stage agtech investing, working under the broad agtech thesis of companies increasing crop resiliency and food security. This leads to investments in precision agriculture, animal tech, some controlled environment agriculture (CEA), and biological crop protection. You can learn more about LeVert Ventures’ fund and investing activity here, and on the show.Why the South?Hannah and LeVert invest nationally, but see some particular attributes of the southeast that make it a logical place to base their fund and investing activity. Hannah laid out six key attractions that make the southeast a particularly attractive place for agtech investing.Science and IP – primarily from the world-leading universities here as the foundation for some of the smartest tech around.Concentration of agtech strategics – a cluster of global multinationals, giving startups a faster path to creating products potential acquirors and distributors really want.Testing partners, CROs and pharma networks – to help validate these technologies and markets more rapidly.Talent – from 1-3.Capital efficiency – all at less expense for facilities, taxes, regulations, and more than in other hubs, giving greater capital efficiency.Entry valuation – all at entry valuations that are more rational and reasonable than elsewhere, giving investors a chance to make positive returns – not at all guaranteed in general.At VentureSouth, we are generalists, but our members have invested in several agtech companies. After our initial investment in AgTI (LeVert’s original ad-tech accelerator), these investments have encompassed farm intelligence (FarmShots, acquired by Syngenta), controlled agriculture (Babylon Microfarms and AmplifiedAg), new crop production (Plantd), and new farm-focused business models (Seal the Seasons and Phinite). These companies share and benefit from the key attractions Hannah described.Who else invests in agtech in the south?Aside from LeVert and VentureSouth, who else is an agtech investor in the south?It’s always dangerous to conclude that there are no investors for something just because they are hard to find. But our impression is that agtech investors are particularly hard to find in the region (and also at our capital stage). They are not totally absent, so we’ve included a few examples below. But overall it seems to us there is a clear gap.Other nearby angel groups (excluding where VentureSouth and other angel groups have co-invested on the same agtech investment):Wolfpack Investor Network (NC State’s alumni angel network) has several agtech investments, reflecting the university’s particular expertise, including Advanced Animal Diagnostics, Improved Nature (a plant-based meat alternative company), and Natrx (a nature resilience technology).Ariel Savannah Angels invested in Edison Rubber, which upcycles sunflower seeds into rubber.Corporate VCs:Syngenta Group Ventures: the corporate venture arm of Syngenta, whose North America hub sits in RTP. One of the longest-running ag CVC units, with recent activity including a $75M Series D in Sound Agriculture and a Series D round in drone company PrecisionHawk.Alexandria Venture Investments: primarily a life-sciences CVC investor, but it invests in agtech alongside biopharma, diagnostics, and research tools.Ag-tech specific (or heavily) funds nearby:Innova Memphis: Investing its sixth ag-focused fund, using a “farm-centric” model in partnership with AgLaunch, a Tennessee-based accelerator and farmer network, and backed by a consortium of farm credit banks. Local portfolio includes Agritx (improving hatch rates by improving the egg microbiome in Statesville, NC) and multiple companies in Tennessee.Cultivation Capital: Based in Missouri, with an office in Greenville, Cultivation Capital has a line in agtech. Local example Ecobot digitizes environmental permitting and wetland delineation for construction projects. A stretch on all the definitions (southeast, agtech) but we’ll allow it.Undoubtedly we have missed some examples, but if you made it this far then we’ll assume you agree that this capital gap is real and especially acute.VentureSouth’s FarmShots Exit to SyngentaFarmShots is one of the most fun exit stories from the VentureSouth portfolio and illustrates some of Hannah’s attractions.VentureSouth members invested in the RTP-based company in September 2016, inspired by founder Josh Miller’s technical skills (and Duke education - #1 and #4) and FarmShots’ high-resolution satellite and drone imagery technology, which analyzed light absorption patterns to flag plant health issues — cutting field-scouting time by as much as 90%. FarmShots had raised a modest $1.1M seed round from local investors including VentureSouth, Piedmont Angel Network, and The Angel Roundtable.Syngenta announced it acquired FarmShots in February 2018 — the first publicly disclosed agtech acquisition of that year by a major strategic (and emphasizing #2). Financial terms weren't disclosed, but the deal “definitely hit our return targets.” FarmShots was folded into Syngenta's AgriEdge Excelsior digital farm-management platform.Josh went on to found Gradient Health, a recurring guest and portfolio company on this show (covered across multiple episodes, most recently Episode 247’s AI deep-dive). Always gratifying to see a full-circle story!So should angel groups do agtech?This remains an open question. There are industry-specific angel groups in life sciences, “space,” sustainability and energy generation, and more, but not (as far as we know) in agtech. The ACA’s Angel Funders report does split out “agriculture/food” as a top 10 industry for angels, but without a lot of fanfare about agtech investing. But perhaps for now it is enough to say that if you are going to invest in agtech, it seems like “in the south” is a sensible place to try?

Angel Investing 101: How a Deal Goes from Pitch to Portfolio at VentureSouthHave you ever wondered what happens after a founder sends VentureSouth an email, or what it actually takes for a “pitch” to become a “portfolio company”? This post is for you. Investment processes often look like a black box from the outside. While there usually isn’t anything mysterious about it, it can be hard to really grok a how a disciplined, multi-stage evaluation process – particularly works in practice. It can be harder still to grasp the nuances of different investors’ processes. We do publicly disclose our process here. But, still, we get a lot of questions about how things really work, so this post aims to add a bit more detail and color.Step One: The Initial ConversationEverything starts with a conversation. As much as we would like to say “cold emails work,” it is rare for even an excellent cold email to get start a meaningful conversation. The unfortunate reality is there are just too many companies seeking capital, and too little time to do them justice, to dedicate meaningful time to cold email approaches. Especially in the world of infinite AI-generated email outreach.We therefore confess that VentureSouth prefers a warm introduction from a mutual connection who can vouch for the founder and the company. We prioritize companies that come to us from VentureSouth members, existing portfolio company teams, or ecosystem partners we respect.But a warm intro is not enough. Founders who craft a sharp, professional introduction are already demonstrating two things VentureSouth specifically looks for: preparation and resourcefulness. The criteria are clear from the start: VentureSouth invests in companies based in the Southeast, led by talented and trustworthy teams, generating initial revenue, targeting a preferred equity stake at a realistic valuation, and we don’t sign NDAs. If a founder hasn't done that homework before reaching out, we have our strongest negative signal and can move on to the next opportunity.Step Two: The Screening MeetingCompanies that make it through an initial conversation with one of the VentureSouth team are invited to pitch at a monthly screening meeting. That’s a 30-minute online presentation and Q&A, recorded so that the full VentureSouth membership can watch, review, and opine.This is one of our deliberate features of the VentureSouth model. Rather than a single VC Partner (or, more likely Associate) making a quick judgment in a conference room, dozens of experienced investors — operators, executives, entrepreneurs — evaluate the companies we screen. That room of collective experience highlights things that any individual might miss, and “averages out” ill-informed or gut opinions into a considered consensus. Groupthink is a risk, but a wide membership with diverse industry backgrounds protects against that.And if you can convince 25 VentureSouth members that you’re the most interesting company with the most believable plan today, you likely have a compelling investment opportunity.Step Three: Due DiligenceNext, a dedicated team of VentureSouth staff, led by our diligence leader Jewel, who has been doing this a while!, and investors dig in.We start by reviewing your documents, so companies with an organized, accessible, and complete “dataroom” distinguish themselves. Investors care (or, at least, should do) that you are correctly incorporated, have files your tax returns, have your business license, have had your employees sign IP assignment and confidentiality agreements, and all the other minutiae of being a real company. Losing here is an unforced error!The diligence team also review the plans – operating plans, financial projections, hiring goals, future fundraising plans, and exit goals – to see if we believe the path the management team sees seems achievable. This “validation” process also includes making reference calls and having a good think about whether this is believable.This stage is where some deals either earn real conviction or raise questions that can't be answered. VentureSouth only invests in roughly 2% of companies that started the process, but we invest in >50% of companies that get to this point. We are already mostly convinced; but we need rigorous diligence to make sure we don’t make our own unforced error. This process is also something that angel investors operating solo often don't have the bandwidth to conduct at this depth on every deal they consider. Our group model changes that equation by spreading the work across experienced volunteers, while maintaining consistent standards under Jewel’s supervision.Step Four: The RoadshowWhile we are working on diligence, companies that clear diligence are invited to present at VentureSouth's monthly member meetings. Some are virtual, but most are in-person in at least some of the cities we meet in regularly. Admittedly, this roadshow is a little inconvenient for founders. But it’s a crucial diligence element for us, because (a) we want to see how effective the team are and (b) VentureSouth ultimately needs its members to make investments in companies. Most people only invest in people they have met.It's also a final test for the founders. Honest, concise answers build credibility. Evasive or promotional answers tend to have the opposite effect in a room full of people who have seen a lot of pitches.Step Five: The InvestmentIf the diligence team presents its findings and enough members opt to invest, VentureSouth makes a capital call, collects checks, finalizes transaction documents, and closes the round. This can be easy – if we’re coming in at the tail-end of the round and all the work has been done. Or it can be 3-4 weeks of work, if we’re leading a deal and our attorneys need to create transaction documents and oversee some “corporate housekeeping”. Either way, hopefully without too much further delay, the company receives capital and gets on with building.We’ll cover what happens after investment in a later post.Why the Process MattersSolo angel investors often make decisions quickly, with limited information, and without a sounding board. The VentureSouth process is the opposite: it's “considered” by design, collaborative at every stage, and built around the idea that better information and more perspectives lead to better decisions.Some might argue it’s “too slow.” We hear that. On the other hand, in markets that are not built around “hype cycles” or have deep history of early stage investing, investors simply do not move very quickly. VC rounds take at best three months, and more likely six to nine or twelve months to close. Of course, a considered process is not a guarantee of returns; no process is. But over more than 300 investment rounds, it's the foundation on which VentureSouth's track record has been built. For investors considering membership, and founders considering a pitch, understanding the process is the first step.Interested in becoming a VentureSouth member? Learn more about membership here. Ready to pitch? Review our full investment criteria and reach out.

VentureSouth Summit 2026 recapThe 10th Annual VentureSouth Summit, February 2026, is now in the books!Over two days last week, over 200 people – VentureSouth members, portfolio companies, team, a few lucky guests, and two lucky strangers who stole our beer -- enjoyed the full range of VentureSouth content. Here’s what we got up to.Day 1 – Portfolio reviewKicking off at Greenville’s premier coworking space, Flywheel Coworking, a standing-room-only crowd took a tour of ten of VentureSouth’s portfolio companies.These companies had previously raised early-stage investment from VentureSouth’s angel investing members and funds (and others), and kindly dropped by to share updates on 2025 performance, their plans for 2026, their views on exit strategies and timetables, and their “asks” for investors. For several, the ask was “please invest again”! Open rounds tally: +9Day 1 – PartyAngel investing is a contact sport best done in teams and with friends. As VentureSouth covers a southeastern footprint, our members in Chattanooga don’t regularly meet our members in Charleston, or members from Greenville…our members in Greensboro, and so on.Our “kick off” party at Ink & Ivy in Greenville was therefore aimed at giving members the chance to put faces to names (or real faces to zoom square faces, at least) and trade feedback, experiences, connections, and support with each other and with the pitching companies.And we were all in bed by 10 😊!Day 2 – The State of VentureSouthOver to downtown Greenville, to the ONE Building conference space courtesy of Roam.A guiding principle at VentureSouth is that we always want our members to know what is going on, and why. This covers educational events, portfolio updates, deal term discussions, transparent diligence work, and much more – and to start the Summit Day 2 (after breakfast and coffee, of course) it covered providing our annual “State of VentureSouth” recap. Wins celebrated, losses commiserated, portfolio performance analyzed, and more lessons learned from Matt D’s annual update. 2025 was a good year for VentureSouth; more capital returned to investors than deployed typically makes a good year, at least for some members…With continued improvements to our cadence, reporting technology, and team coverage we think 2026 could be even better.Day 2 – Practical Learnings about ExitsAngel investing is philanthropy until there are exits. In two panels we learned lessons from one (painfully) unsuccessful investment and two positive exits, Cadchat’s sale to GoEngineer and Zipit’s purchase by Wireless Logic. When, why and how to engage with bankers, how board members can lighten the load and focus the discussion, how creditors can become enemies and how debt can become deadly, and how to manage shorter-than-expected or longer-than-hoped investment horizons; all things to consider when planning for and executing entrepreneurial exits.Day 3 – Sports InvestingThough not a deliberate theme, our lunch speakers provided differing-but-overlapping experiences of sports investing. Wallace Cheves, Greenville businessman and Chairman of Greenville Pro Soccer, outlined his experience – and introduced his current public fundraising, which you can learn more about – and, if you’re interested, indicate that interest to invest right here. Open rounds tally: +1Day 3 – VentureSouth MeetingTo wrap things up, our annual “Member Migration” meeting – a VentureSouth meeting where our members “migrate” to access the content – filled the final afternoon. Content included:a new company pitch (Open rounds tally: +1)two “refresher” pitches from companies emerging from our diligence process and closing up open rounds (Open rounds tally: +2)three further “open rounds” of portfolio companies that hadn’t pitched yesterday (Open rounds tally: +3)two companies currently raising capital on the Vicinity platform (Open rounds tally: +2)a lightning round of deals “coming soon” to the Vicinity platform (Open rounds tally: +6)and a disturbing amount of step-climbing cardio to distribute the microphones for the poor host.And of course there was swag, donuts, bourbon, boats, tough questions, last-minute agenda shuffles, the world’s most supportive mattress, Healthycell sample sachets, and all the fun joys of executing a 200-person 2-day conference!That was the agenda. What were the highlights?For Jewel: After months of working closely with our angels and founders through the diligence process, the Summit feels like a true full-circle moment! The conversations that start in data rooms and diligence calls come to life in person, and it’s energizing to see how much progress companies have made since we first evaluated them! For Charlie: Once again, we were proud to deliver maple bacon donuts to the membership! And for Matt: It's hard to believe we've been hosting these annual summits for a decade, but sensing the energy, excitement and learning that comes from gathering our investors and founders never gets old. We're always impressed and invigorated by the work our companies are doing to solve big problems and create new opportunities - from medical breakthroughs to AI applications - but this year was the first time we had an electric boat parked in a downtown plaza, so that was a new one for the highlight reel!If you came along, we would love to hear your highlights – and learn what we can do better so that the next 10 summits keep improving!What now?For those keeping count, there were 23 potential investment rounds (14 VentureSouth private deals and 9 Vicinity public deals) for consideration by members. If your complaint about angel investing is there aren’t enough deals to consider, we may know a group for you.(If your complaint is there are too many to evaluate, we hear you; luckily there are plenty of supporting materials to review, and other methods like an index-fund approach to simplify selection.)Having debriefed and decompressed, work resumes on our 2026 mission to do more to Make Money. Have Fun. Do Good.We hope you will join us for the next year, and that you will join us at the 11th VentureSouth Summit in 2027 as part of your membership.

The “dangers” of the liquidation preferenceDespite blocking so many angel investing “experts,” LinkedIn still fills our feed with plagiarized or AI-generated (or both?) stories on how:“This founder sold her company for a bajillion dollars and walked away with nothing.”(Just to prove I’m not making these up, here are just a few for you to endure:Entrepreneurs share these heartbreaking stories with VC-influencers. Every couple of weeks with this guy apparently.Good exits actually aren’t.Attorney-influencers do it. Repeatedly :)And it even happens in India!)These stories are, frankly, duckshit.But from the comments (of which there must be some that aren’t bots. Right?) they resonate – and people who invest and/or raise capital apparently have no clue about the investments they are making or taking. Yikes.So that you have no excuse to be surprised by liquidation preferences, here are the key facts:Angels and VCs buy preferred shares in companies. Preferred shares mean the shares have a liquidation preference – which means investors get their money back at an exit (aka liquidation) before other shareholders start getting proceeds.Liquidation preferences are standard, sensible, not dangerous, not evil. They protect investors seeing their investment immediately disappearing into the pockets of others.A 1x non-participating liquidation preference is essentially universal. (CooleyGo tracks this stuff.) It is very difficult to find a company with a 2x participating liquidation preference.If you are offered “worse” terms (a higher multiple, or participating preference) it’s because you are less investible, less creditworthy – and investors need better protection or upside than you offer without it. If you can raise money without a higher multiple or participation, you obviously should. “Distressed deals” have higher preferences.Preferences “stack”. If you raise 4 rounds of capital, that’s a lot of liquidation preference to pay out at liquidation.Liquidation preferences only become relevant if the founder does not succeed. If they turn $20M of investment into $20M of exit value, the founder has basically failed, and they shouldn’t get paid.Liquidation preferences are circumvented a lot. Founders almost always get salaries paid along the way, at the very least. At exit, acquirers regularly “carve out” proceeds or transaction bonuses to founders. Later stage investors often eliminate early-stage investors’ liquidation preferences. The “walked away with $0” trope ignores all these things to bait clicks, and to show how evil venture capitalists and angel investors are. While we no doubt are, liquidation preferences are not why!Why care? Liquidation preferences are certainly important, but these kinds of stories are likely all fabrications. You should (as an investor or founder) understand liquidation preferences and how they impact distribution scenarios. But if you are ever in a position to complain about them, it’s because something else much worse happened – and you’re complaining about a symptom not a cause.

VentureSouth vs The Angel Investment MarketReleased in late August, the Angel Funders Report from the Angel Capital Association – which you can learn about on the Venture in the South podcast episodes with John Harbison here, and Paul and David here – provides the latest insights into the angel investment market.We thought it might be interesting (to someone) to see how VentureSouth aligns with, and sometimes differs from, the market. So, here’s today’s bloggy analysis – VentureSouth vs the Angel Investment Market.Overall investment activity: The market: invested dollars down -33% in 2023, down another 6% in 2024; total dollars per group fell 16%, from $4.4M to $3.7M; deals per group fell 10%, from 17.5 to 15.8. (Smarter folk than me will have to figure out how those numbers can be simultaneously true!)VentureSouth: VentureSouth members and sidecar fund invested +28% more in 2024 compared to 2023. This was from both more investments (37 vs 33, up 12%) and more dollars per investment (up 14%).VentureSouth is a larger-than-average group (the #8 in North America by activity, in case you didn’t know!) and directly exposed to these market trends. We have definitely seen hesitation about investing since the 2021 over-exuberance. Nevertheless, we continue to focus on finding the best deals to invest in outside of these national trends – and in 2024 were able to grow activity healthily despite the wider market hesitancy.New vs follow-on rounds:The market: 52% of deals were “follow-on rounds”, the first year that follow-on rounds exceeded “initial” investments. On a dollar basis, the split was 55% follow-on : 45% new.VentureSouth: 81% of deals were “follow-on rounds”; on a dollar basis, the split was 75% follow-on : 25% new.In recent years, VentureSouth members have consistently make more investments in follow-on rounds than “initial” rounds. This is a function of a large, and generally healthy, portfolio: as existing companies raise again, we try to support them with further capital, if they remain attractive investments. Our follow-on rounds are generally smaller than initial investments – sometimes 10-25% the size of the initial investment check. This is substantially different from “the market,” where the average follow-on round was 14% bigger than the average initial check ($231K vs $201K). What is going on there? Your guess is as good as mine.Fewer board seatsThe market: 2024 saw a decline of “angels” on boards, with the proportion of deals with a member or observer falling from 30% in 2023 to 26% in 2024 – a continuing decline.VentureSouth: For the 8 new companies in which VentureSouth invested in 2024, a VentureSouth member signed up to serve on the board of 3 – 37.5%. Of the other deals, one deal was a convertible note without a board seat; and the other four companies had a board seat allocated to the round, but a large or more strategic investor took the board seat.Overall, VentureSouth often “leads” deals and with a larger check and great influence often comes a board seat; and we typically prefer equity investments over SAFEs and Convertible Notes, which again typically have board seats. Like the ACA, we advocate for involved board presence to give the companies the best possible chance of success.C-CorpsThe market: 95% of investments were in C-CorpsVentureSouth: 100% of investments were in C-Corps.With few exceptions, the administrative headache of LLCs outweighs the potential tax or other benefits, and so VentureSouth members almost always only invest in C-Corps.Are SAFEs winning?The market: In 2024, 38% of deals were preferred equity, 23% were convertible notes, 14% of deals were SAFEs, and 6% were common stock.VentureSouth: In 2024, the mix for VentureSouth was 38% of deals in preferred equity, 53% in convertible notes, and 9% in “other” debt and equity, and only 0.2% in SAFEs.For new investments in 2024 (excluding follow-on rounds), the mix was 77% preferred equity, 10% convertible notes, and 13% in “other” debt and equity; no SAFEs.In general, VentureSouth members only invest in preferred equity the first time we invest in a company; in follow-on rounds, as the companies raise various equity, convertible notes, SAFEs, and other bridge rounds, we participate to support the company (and assuming it remains an attractive investment) – but still retain our preference for the certainty and more favorable risk-adjusted returns of pricing equity rounds.Out of region:The market: Some regions now invest more outside their region than inside, with 49% of total dollars now “outside” the home field, but southeastern groups invest 66% of their dollars at home.VentureSouth: We invest 100% of our dollars “locally” – in the Southeast region in which we are based. This is a deliberate policy: we think the Southeast is an attractive region with great tailwinds, but even more importantly we want to know, supervise, and assist founders in our home towns.Group structure and longevityThe Market: The largest angel groups are over 20 years old and almost all operate both a network and a fund model, to accommodate investors with different investment interests and ideas.VentureSouth: We started our first group in 2008 – so, at 17½, are younger than the most established groups – but have been around long enough to have learned some lessons! We offer both a network model (you choose each deal you would like to invest in) and a fund model (you put money into a fund, and it invests automatically in the deals that VentureSouth members make).What other data points in the report would you like to see the “VentureSouth equivalent” of? Let us know and we’ll be happy to share!

"Angel investing is broken." "Early stage venture capital is broken." Articles and pitches now have to start like that.The recent article from Pitchbook: The incredible disappearing sub-$5 million round (Link here) had a similar message: early stage venture is dying out. A decade ago, these [sub-$5M] deals made up over 70% of all US VC transactions. Today it’s less than half of that.Yikes? What happened to early-stage VC rounds?The article offers two explanations. Mega funds steal all the small rounds and make them big. Startups seek bigger rounds at higher valuations, thereby “pricing out” the investors who would do smaller rounds.While these trends might be true occasionally, here are four potential reasons that seem much more plausible to me.1. Exaggeration: their chart shows a decline of 29 percentage points, not more than 35 as the claim suggests. Nit-picky, but that’s 20% of the supposed delta right there.2. Inflation: Since 2015, the dollar has lost ~35% of its purchasing power (using CPI). A 2015 $4M round is now (in 2025), all else equal, a $5.5M round – and therefore “disappeared.”3. Fewer disclosures. The proportion of rounds where sizes were not disclosed rose from 13.5% to 32%. That’s 62% of the (29 ppt) delta. Why are more rounds not sharing round information publicly? Does it seem more likely that small, under-the-radar, private rounds are undisclosed – or that big, multi-party, later-stage rounds have undisclosed round sizes? Seems likely to me that the rounds are “disappearing” in the sense that fewer people are disclosing the size of early stage rounds to Pitchbook. We don’t share any deals that VentureSouth does with Pitchbook, and I think that is becoming more common.4. More small investors. If there are (as there seem to be) many more small early-stage VCs, more angel investors, and more people funding rounds individually, across the country not just in Silicon Valley, more quickly and quietly on SAFEs, we would expect fewer rounds to come to the attention of data providers. Are the rounds “disappearing” in the sense of being harder to locate, not being fewer in number?If my theories were true, there would be the greatest decline in the smallest rounds – which the data does show, with 20 percentage points decline in the <$1M round side.Megafunds, AI and valuations dominate the discourse about VC, but they don’t always capture the reality of capital raising. PS – As we were hitting “post” on this, Carta added their data. Are venture rounds under $5M really going away? ...no, not if you count SAFE rounds. And you should count SAFE rounds. Takeaway: don’t believe everything you read; definitely use Pitchbook data carefully; and if you need to raise <$5M, go right ahead!

There aren’t many $10 billion opportunities hiding in plain sight. But for early-stage investors who are paying attention, the State Small Business Credit Initiative (SSBCI) might be one of the most overlooked (and powerful) resources available today.Originally launched in the wake of the 2008 financial crisis, SSBCI was designed to help small businesses weather economic disruption. Now in its second iteration (SSBCI 2.0), the program is back with a much bigger budget, a broader mandate, and, critically for angel investors, a stronger focus on equity investments and early-stage capital.That’s good news for investors in the Southeast. But here’s the catch: most people still haven’t heard of it.At VentureSouth, we believe investors shouldn’t need to read federal policy documents to understand where the next opportunity lies. So in this blog, we’re breaking down what SSBCI is, how it’s being implemented across different states, and how you can position yourself to take advantage of it without getting tangled in the bureaucracy. What is SSBCI?And why, as an investor, should you care about it? Let’s start with the basics: SSBCI is a federal program administered by the U.S. Department of the Treasury. Its goal is simple: get more capital into the hands of small businesses, particularly in underserved communities.SSBCI was first introduced in 2010 as part of the response to the Great Recession. At the time, it was a $1.5 billion program that focused mostly on helping states boost lending to small businesses through loan guarantees and credit support. The impact was solid, but limited. Fast forward to today: SSBCI 2.0 is a full-on reinvention funded through the American Rescue Plan Act.The new program has been supercharged with $10 billion and a much broader scope. For the first time, venture capital and equity investments are part of the mix, which means angel investors now have a seat at the table. That’s a big shift. For those of us focused on growing early-stage companies in the Southeast, it means more tools, more capital, and more collaboration with state programs that want to see young companies thrive. It also means that knowing how your state is deploying these funds could give you a front-row seat to the next great deal flow.Did You Know: As of December 2024, more than $2.2 billion in SSBCI funds had already been deployed across 89 jurisdictions. That’s an 18% increase over the previous quarter! The pace of deployment is accelerating, signaling stronger pipeline readiness and more opportunities coming online for early-stage investment.This time around, the government is going bigger and broader with not only $10 billion in funding but also a mandate to reach historically underserved communities, including women- and minority-owned businesses and rural areas.Here’s what’s different: FeatureSSBCI 1.0SSBCI 2.0Total Funding$1.5 billion$10 billionPrimary UseLoan programs (credit support)Loans and equity capitalEquity ParticipationRare and limited Stronger emphasis on VC and angel fundingTargeted Impact AreasGeneral small business support Underserved groups (minority, rural, disadvantaged) Flexibility for States ModerateHigh; states choose from fund-to-fund, direct, and hybrid For angel investors, that last line is key: each state gets to decide how to use its share of the money. Some states are deploying funds directly into venture funds. Others are co-investing alongside angels or creating entirely new vehicles to support early-stage equity. Currently, 36% of all SSBCI allocations – roughly $3.2 billion – are earmarked for equity or hybrid equity programs, including direct investments and fund investments. That’s a significant carve-out specifically designed to support angel and venture capital engagement​.What you need to know? SSBCI 2.0 opens doors that SSBCI 1.0 didn’t, especially for those of us investing in high-growth startups across the Southeast. One Program, Fifty Strategies: How States Are Using SSBCI FundsOne of the most interesting (and sometimes confusing) aspects of SSBCI 2.0 is that every state gets to design its own approach. That means your opportunity as an investor can look very different depending on where you’re based or where the startup is headquartered.Here are the three main models states are using: 1. Fund-to-FundSome states are allocating SSBCI dollars into existing or newly created venture capital funds. These funds then deploy capital into early-stage companies – sometimes directly, sometimes alongside angels. This model is especially promising for investors who are already plugged into fund networks.Example: North Carolina’s NC Rural Center is leveraging SSBCI funds to bolster both debt and equity options for small businesses, especially in underserved and rural communities. While not a direct venture capitalist fund, their equity-like instruments are designed to support growth-minded businesses.Example: North Carolina, South Carolina, and Georgia have all emerged as leading performers in SSBCI deployment. North Carolina has deployed over $109 million, South Carolina over $38 million, and Georgia over $54 million as of Q4 2024, placing them among the top 20 jurisdictions nationwide.  2. Direct to StartupIn this model, state agencies make investments directly into startups, often via matching programs that partner with angels or venture capital. The upside? More capital into the deal. The challenge? Navigating the bureaucracy to secure the match.Example: InvestSC in South Carolina has earmarked SSBCI funding to support equity investments through fund managers. That means if you’re co-investing with a participating fund, SSBCI capital may be working right alongside you. 3. Hybrid and Niche ProgramsSome states are blending models or focusing on specific sectors, like life sciences or advanced manufacturing. Others are creating niche tools, like revenue-based financing or technical assistance grants, that support the pipeline leading to investment-readiness.For investors, this variation creates both opportunity and complexity. Depending on where you’re active, you might find SSBCI funds being used to:De-risk your early-stage betsProvide follow-on capitalMatch your investment dollar-for-dollarOr in some cases, not be accessible at allThat’s why it pays to know how your state is using its SSBCI allocation, and how to plug in. Navigating the Patchwork: How to Find and Use Your State’s SSBCI ProgramWith every state running its own SSBCI strategy, the first step is knowing what your state is doing and who to talk to. Unfortunately, there’s no single hub that maps it all out clearly. But there are ways to get your bearings: Start Here:Check your state’s economic development or commerce department website. Most programs are housed there, even if they go by different names (like InvestSC or the NC Rural Center). The Treasury Department’s SSBCI page lists all 50 state programs and updates progress reports as funding gets deployed. Reach out to local funds, accelerators, or angel groups. They often have the inside scoop and may already be involved in matching programs or co-investment opportunities.Ask These Questions:Once you find your program, here are a few key questions to ask:Is this program using SSBCI for equity or just loans?Can angels or early-stage investors participate directly or through a fund?Are there matching incentives for private capital?What companies or sectors are being prioritized?Don’t Go It Alone:This is where your network comes in. VentureSouth members, for example, benefit from shared diligence, pooled capital, and a team that actively tracks trends like SSBCI. We also talk through these programs in depth on the Venture In the South Podcast (see Episode 166), so even if your state’s plan feels murky, you don’t have to figure it out solo.SSBCI isn’t a magic wand. But it can tip the scales, particularly in early-stage deals where every dollar (and risk buffer) counts. There’s A $10B Opportunity That Deserves Your AttentionSSBCI 2.0 is quietly reshaping the landscape for early-stage investing in America, especially across the Southeast. With $10 billion flowing through state-run programs, the investors who understand how to plug in stand to benefit the most.It’s not just about more capital in the system. It’s about lowering risk, expanding access, and strengthening the pipeline of promising startups. Whether your state is directing funds through venture capital, matching angel investments, or experimenting with hybrid models, SSBCI is a signal: smart capital is being invited to the table.At VentureSouth, we’re tracking these developments closely. We’re talking about them on the Venture In the South Podcast and unpacking what’s real, what’s noise, and what’s worth your attention. Because while SSBCI might sound like just another government acronym, we see it as something else: A chance to make money, have fun, and do good with a little help from a federal initiative most people haven’t even heard of.So if you're interested in investing in small companies in the Southeast and you plan to do it with clarity, community, and confidence, SSBCI is worth a closer look.

By Aubrey ZoodsmaWhen you hear the term “venture capital” you may think about businesspeople in suits, focused on the bottom line and building profits left and right. You probably don’t think about an angel investment network that leverages its connections to better their local communities and create a greater impact than just a dollar sign. But that’s precisely what VentureSouth is doing, and it’s something I’ve gotten hands-on experience with during my internship.I had the opportunity to work on one of these community projects with Carolina Women+ in Tech, a group for women and non-binary individuals in STEM, tech, and entrepreneurship fields. This chapter is just starting out in Greenville, SC, and was looking for some support. VentureSouth co-founder Paul Clark met with the Greenville chapter president, Samantha Cooks, to discuss what kind of assistance they needed. Based on that conversation, he felt that I would be a good point of contact for them, as a woman in a tech-centric field, and he connected us.When I later met with Cooks to help connect her to college students in the area, she told me how helpful the meeting had been. “Coming into Greenville as a remote worker, I didn’t have many professional connections. Paul helped us connect with local professionals in the tech field and gave us advice on how to grow,” she said.Since then, Carolina Women+ in Tech has hosted events, grown a larger support network, and added new members to their board. And they can’t wait to keep growing! “The chapter curator and board are excited to create a community for individuals that embrace the role tech plays in their careers, businesses, and lives,” said Cooks.  This is a great example of how VentureSouth uses its network to support small businesses in our communities, not just startups looking for seed money. But their investment doesn’t only strengthen local communities and economies; by choosing to invest in these startups, more job opportunities in our communities are created—something very much needed in uncertain economic times like these. In fact, all new net jobs in the United States can be attributed to startups like the ones VentureSouth invests in.And with VentureSouth’s partnership with Vicinity Capital, a capital-raising company focused on connecting locals with investment opportunities in the area around them, their impact will be even greater. Now called Vicinity Ventures, the partnership will allow a broader selection of local investment opportunities for both amateurs and accredited investors across the southeast.

Discover how equity crowdfunding creates new investment opportunities through our Vicinity Ventures partnership.

Explore why the Southeast is booming for startups in 2025 and how angel investment groups can capitalize on it.