Although Wilmington has a lot to offer, a thriving venture capital market isn’t among its highlights. 
 
Longtime Wilmington Mayor Bill Saffo counts the lack of a flourishing venture capital (VC) market as a major missing local link. “You might have a company that has been talked about or created even here in Wilmington,” Saffo said, “but those individuals are having to go elsewhere to find the funding to create the company.”
 
A consequence of a dearth of available local VC funds can be startups moving away from the area amid their search to find financing partners, according to Heather McWhorter, director of University of North Carolina Wilmington’s Center for Innovation and Entrepreneurship (CIE).
 
“Unfortunately, the solution right now for scaling Wilmington-based startups could lead to finding capital outside of the region and even moving to a region with more VC capital,” McWhorter said. 
 
Jim Roberts, founder of Network for Entrepreneurs in Wilmington (NEW), said while he wouldn’t disclose what startups have left the area for this reason, “I am aware of companies who have moved out of the region for what they perceived as a lack of funding support.” 
 
Another limitation, according to McWhorter, is a lack of specialty investment firms and regional funds that focus on women- or minority-owned startups, which she said restricts these groups from “scaling their businesses in a meaningful way.” 
 
The region, however, is making some progress, McWhorter said. “Over the past several years, investors outside of the Wilmington region have increased their attention on our startup community,” she said. 
 
Groups like the CIE aim to connect the dots between entrepreneurs and investors, McWhorter said, “but there are investment and infrastructure gaps to fill.” For example, McWhorter said she’d like to see the introduction of a Wilmington-based accelerator for tech startups to help reduce the need to travel outside the area. “We have an incredible community of entrepreneurs who are ready to scale,” she said.
 
Through various NEW panels and events, Roberts has fostered introductions and opportunities between local entrepreneurs and experienced investors. 
 
“If we want these companies to grow, there has to be some fuel for them,” Roberts said. “Not everyone is blessed with family money.” 
 
It’s a bit of a paradox: For a region ripe with wealthy retirees, home to one of the state’s wealthiest zip codes, it can be surprising for some when local wallets aren’t quick to unfold. 

Roberts said a key difficulty in local entrepreneurs netting investors is “no one wants to be first. … You’re looking for some other investor to go first and then you consider it.” 
 
In 2015, Roberts launched Wilmington Angels for Local Entrepreneurs (WALE) and has attempted to fill a void left after the Inception Micro Angel Fund (IMAF) Cape Fear chapter shut down in 2017. 
 
“There was no local money investing in local startups,” he said. “If our entrepreneurs are on a tour of the state of North Carolina raising money, the first question the investor is going to say is, ‘Well, why didn’t somebody in Wilmington invest?’ And that is one red flag. And you only get three strikes.” 
 
With a small pool of investors, WALE has provided more than $1 million combined to 18 startups, a majority of which are based in Wilmington, Roberts said. 
 
Charlie Banks is the managing director of VentureSouth, a Southeastern early-stage angel investment firm. In 2019, VentureSouth launched a local chapter in Wilmington – the area’s largest angel investment group. (Rob Kaiser, publisher of the Greater Wilmington Business Journal, is the director of VentureSouth Wilmington.)
 
“I would agree there’s not a prolific venture scene in Wilmington,” Banks said in an August interview. “But that’s not the problem, in my opinion.” 
 
While Wilmington has “a dozen really compelling early-stage companies, many of which have grown into larger companies,” Banks said, the city has fewer eligible startups for angel investors to choose from compared to the entire Southeast. “There’s not dozens and dozens of them where investors can pick and choose. But 10, 15 years ago, there were zero,” he said, citing the region’s recent growth. 
 
It’s important for investors to make returns, Banks said. “In order to do that, investors need to invest in the best deals across the entire region. Once they do that effectively and they’ve made money in the asset class, they recycle the capital locally,” he said. “So recycled capital is what actually makes the impact – it’s not the initial tranche of money.” 
 
For entrepreneur Scott Monroe, who co-founded business-to-business software-as-a-service (SaaS) firm Essential Personnel in 2020, whether the capital is local is “irrelevant.” Locating the money isn’t the difficulty, he said; it’s putting in the work to raise the “right” money. Though Essential Personnel hasn’t yet decided to accept outside capital, Monroe said he is “always courting,” and has made connections with numerous California- and New York-based VC firms eager to make deals with startups like his.
 
“Finding the right investment partner that brings more than just money to the table is absolutely critical,” he said. 
 
Upon quickly realizing the Wilmington capital market didn’t have an appetite for “larger follow-on funding,” local startup Isosceles Pharmaceuticals started shopping big-city VC firms for cash.
 
“We’re looking at $5 million out of the gate for an early-stage company,” president Brett Lanier said of the startup, which is developing nonopioid therapies for pain relief treatment and related conditions. “So it’s a little high for the local market.”
 
As economic outlooks turned grim in 2022, Lanier said, “VC spending began to contract nationwide.”
 
This cooling prompted Isosceles to engage in regulation crowdfunding. Under the regulation crowdfunding model, investors can buy into Isosceles at its early stage, similar to the public market but at a fixed price. 
 
Isosceles has already raised $3.6 million since this avenue opened in November and has used the funds to kickstart animal trials for its novel treatment. 
 
Roberts said the Wilmington startup ecosystem has proven that entrepreneurs can grow successful companies locally. With success stories like nCino, PlayerSpace, Untappd and others, he said the region must take advantage of investors’ FOMO (fear of missing out). 
 
“What smart investors will tell you, quietly, is,” he says, “while they don’t like losing their money, what they hate worse is missing the big deal.”

Correction: This version has been corrected to state the group WALE has invested more than $1 million in startups.