For most aspiring entrepreneurs in the Wilmington area, Jim Roberts is an entry point into a broadening network of founders, mentors and, of course, capital.
The founder of the Network for Entrepreneurs in Wilmington (NEW) and Wilmington Angels for Local Entrepreneurs (WALE), Roberts is vocal about Wilmington’s potential as a thriving hub for startups and tech companies. Over the past decade, Wilmington’s startup scene has evolved significantly, in no small part due to the success of Live Oak Bank, founded in 2005, which has served as a vital incubator for several startups in the region.
Fintech offshoots such as Live Oak Bank, nCino and Apiture, which was acquired last year by CSI, have helped drive economic growth. Meanwhile, Vantaca, a community association management software company that became a unicorn last year with a $300 million investment, is bringing new talent to the region.
While employment growth has slowed from pandemic-era peaks, the Wilmington metro area recorded the highest employment growth rate in North Carolina over the past year, according to data from the U.S. Bureau of Labor Statistics.
Wilmington’s startup capital market has evolved alongside the rise of homegrown startups and bustling development, though the ecosystem is still a long way from rivaling tech hubs like Research Triangle Park.
“It’s a very challenging market for startups,” Roberts said, pointing to the limited pool of local investors willing to make high-risk investments in the area.
“Most people do not want to work with startups, and they don’t want to work with entrepreneurs,” he said. “If you help someone and it fails, who are they going to blame?”
Even so, Roberts and others like him are optimistic about building momentum in Wilmington – and the work it will take to get there.
A generous capital market is an essential element of any startup hub, which generally relies largely on networking. Continually cultivating relationships within existing networks is essential in a town like Wilmington, Roberts said, because your reputation often precedes you.
When founders reach out seeking fundraising opportunities, Roberts directs them to events such as 1 Million Cups, a weekly pitch practice held at the University of North Carolina at Wilmington.
Deb Mosca, co-chair of xElle Ventures, an angel investment group offering early-stage funding to women-led startups, also stressed the importance of networking, especially in a capital market dominated by men.
“Of every $100 that’s invested in startup businesses, only $3 goes to women founded businesses,” she said, “even though they make up more than 50% of new businesses. So, it’s really disparate.”
Mosca pointed out that women are often at a disadvantage when founding a business, partially because they lack the same networking opportunities as male founders.
“It doesn’t matter what the business is, and it doesn’t matter whether you’re looking for money or looking to invest money,” she said. “You need to know people.”
While developing and maintaining relationships with potential investors is key to gaining access to capital, Wilmington still has a slim number of venture capital funds and angel investors willing to actively invest in local companies.
Still, Roberts is optimistic about the changing market.
In March, the independent foundation NC IDEA announced it had signed on as the anchor investor in the Triangle Tweener Fund, committing a $4 million, five-year limited-partner investment to extend the Tweener Fund’s reach throughout the state. Since then, two Wilmington startups have been awarded funds from the newly rebranded NC Tweener Fund: NeuroTech Insights and Skillmaker.ai.
Skillmaker, an extended reality workforce development startup based in Carolina Beach that has received funding from WALE, also received an investment from Idea Fund Partners, a 19-year-old early-stage venture fund in the Southeast. The investment marked the firm’s first contribution to a Wilmington company.
“I moved to Wilmington about a year-and-a-half ago, because I’m very excited about the market here,” said Juan Carlos Pacheco, senior associate at Idea Fund Partners, in April. “I think there’s a ton of opportunity from an investment firm side. ... It’s come a long way, and it has the potential to become something really big. But we’re not there yet.”
Idea Fund Partners is raising a $35 million fund – its fourth – with typical investments in pre-seed and Series A stages, Pacheco said. According to Pacheco, there’s a lot of capital in the Wilmington area that could fuel a startup ecosystem; it just hasn’t been activated yet.
That sentiment is echoed by Charlie Banks, co-founder and managing director of VentureSouth, a Greenville, South Carolina-headquartered angel investment network with a chapter in Wilmington.
“You can have a community with a lot of wealthy individuals, but unless they’re educated on how to be effective in this asset class, it becomes just a community with wealthy people that love to talk about investing in startups but really don’t,” Banks said.
VentureSouth began its Wilmington chapter in 2019 through a partnership with the Greater Wilmington Business Journal and its publisher, Rob Kaiser. (VentureSouth invested in Approve, a Wilmington-based startup partly owned by Rob Preville and Kaiser before the local chapter launched.)
According to Banks, the VentureSouth pipeline and Wilmington chapter remain strong, but activating local capital by educating investors is crucial to maintaining momentum.
“(Wilmington has) a very good core group of investors that really enjoy supporting early-stage entrepreneurs,” he said, “but outside of Atlanta and the Triangle, there really isn’t enough deal flow to support a massive ecosystem of just people investing in companies in that one community.”
Outside investor Tim McLoughlin from Cofounders Capital – a Durham-based venture capital firm with over $125 million in investments – also believes that Wilmington has the potential to develop a vibrant startup ecosystem. However, like Banks, McLoughlin notes that investors are unlikely to be attracted to the Port City until there is a higher concentration of viable companies available for investment.
“I just get the sense that maybe pace and velocity need to pick up,” McLoughlin said. “There are a lot of companies that I’ve met with that just have never gotten the commercial traction.
“After you talk to them for a year or two, if that commercial traction isn’t accelerating,” he added, “it’s really hard to get excited about it.”
Keeping funding local is essential to ensuring that founders stay rooted to the area – and continue contributing to the startup ecosystem, insiders say.
Founders like AJ Trelease, who started his medication-smart device company, CareHome Health Solutions, in 2023, said it was essential to look outside Wilmington for capital, though he hopes to remain based in the area. The majority of grant and pitch competition funding the company has received has come from the Triangle and Charlotte areas, he said.
Camden Weis, founding partner and chief revenue officer at Skillmaker.ai, argues that the “Old Guard,” or Wilmington’s traditional capital market, and newer realms of capital have yet to fully merge.
“A lot of the old money is more focused on real estate and land and the typical things that you would envision an older city having focused on,” he said, “versus, you know, frontier technology companies.
“I do think that the bridges are there,” Weis added, “I just think they need to be reinforced, and people facilitated walking over.”
Founders and investors both point to a need for more resources and programming in the area to encourage startup growth, beyond the sole efforts from Roberts and the UNCW Center for Innovation and Entrepreneurship (CIE), which has served as a major incubator for the area.
“We need more ways for people to connect. UNCW and CIE – I think they’re doing a lot of that, but I think we need different headquarters,” said Heather McWhorter, director of the CIE. “My space is always so full here, and so we either need a bigger space, or we need other ways to bring people together.”
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