As the managing director of VentureSouth, Charlie Banks has invested over $60 million in over 90 companies. Some of them have been amazing success stories – but he’s seen his share of failures as well. Today, he talks about what the founder should be looking for in an investment partner, and he shares the one major reason that startups fail.
Trevor Schmidt: Today’s guest is Charlie Banks, managing director at VentureSouth, an early-stage venture firm that provides capital and expertise to startups throughout the Southeast with its angel investment network and funds. To-date, VentureSouth has invested over $60 million in over 90 companies. It has expanded from Greenville South Carolina to multiple locations throughout the southeast, including a location right here in the Triangle.
On the show, Charlie talks about his relationships with founders and advice he can give for anyone running a company, because he’s seen some major successes – like VentureSouth investments in companies like Spiffy and emergo therapeutics – and he’s seen his share of failures as well.
For Charlie growing up, he always wanted to be a sports agent. His dad was a lawyer, and he had taken the LSAT, ready to enroll in law school. But before he could do that, he got a little taste of investing and entrepreneurship and was hooked
Charlie Banks: I, got involved in some real estate investments. And I guess it was timing and luck more than anything, but. Made some money, in that and, started making bets in companies that I just thought were interesting, you know, in entrepreneurs that were doing some cool stuff. And I had no idea really what angel investing was at the time. And I guess you could say that’s what I was doing, but, through all that, I, I., started a couple of, you know, small, small things myself. Some of them were successful, most of them were not but you know, looking back on that time, it was really just about educating, educating myself on what not to do.
Trevor Schmidt: That education is something that Charlie and the rest of the team at VentureSouth provide, both to their investors in the fund and the entrepreneurs they’re backing.
To start today, I ask Charlie about some of the successes he’s had with the fund
Charlie Banks: My favorite success story is that we, we backed a young team that took an idea that they had in, in college, turned it into a successful business. And, and, and we were really able to watch the matriculation all the way from inception and idea and, and, you know, senior thesis all the way through a massive multimillion dollar exit. And that just seeing the full process, is kind of my off the cuff answer as to what’s been my favorite success story. Yeah.
Trevor Schmidt: Now, is there something about that team or, or that business and the idea that they had that kind of stands out as far, as far as why they were successful versus some of these other investments or companies that you’ve worked with that maybe didn’t pan out in the same way?
Charlie Banks: Yeah. That, so that’s an easy one to answer because that success dynamic that was really attributed to the, to their ultimate success was the fact that just how coachable they were. I mean, these guys were, they were college seniors when we, when they first reached out to us, they had absolutely no idea what they were doing. And I, you know, I’ve been there and I’ve seen it and I, I still see it a lot. But they didn’t know what they were doing and they were hungry for the educational aspect of what they’re wanting to get into.
You know, when we first invested, we put a, you know, we helped them form a great board, taught them about board governance. We just really, really able to see that how coachable they were and, and, and then how they took the coaching and implied it to their business model. And it, and it just worked.
Trevor Schmidt: I, I, I find that to be the interesting dynamic for, for successful entrepreneurs is both having the sheer confidence in what you’re doing to be able to push forward with the business, but at the same time being open and, and able to take direction and coaching and instruction from advisors or other people, it it’s, it’s a balance that I think the, the best entrepreneurs strike very, very well.
Charlie Banks: Absolutely. Yeah, the mentorship piece of it is, is just it’s so critical. It’s, it’s really hard being an entrepreneur, very hard, you know, not only, yeah, not on the business coaching side of it, just the mental, the mental coaching side of it is such a big piece that most people seem to overlook. And entrepreneurs inherently you know, egotistical maniacs, right. They’re just, they, they think they’re gonna solve the world and, and that’s what makes entrepreneurship so fantastic. It’s because most of them do solve the world, but when you balance that with the coaching and understanding that, you know, taking this maniacal approach to how you’re building a career, you know, and combine that with the coaching and, and make something great out of it, that that really is, what’s so fascinating about entrepreneurship and angel investments.
Trevor Schmidt: Well now you’ve, you’ve talked about being an angel investor or an angel investment for a couple times now. For our listeners who don’t really aren’t familiar with that term or what it means to be an angel investment group, can you provide us a little background?
Charlie Banks: Yeah, sure. So, angel investors are, are very simply individuals who invest their own money. And expertise in, in companies. It differs greatly from what most of people attribute to the capital available to early-stage companies or any companies is venture capital. So venture capital is, is that, you know, it’s oftentimes invested in the same type of companies, but that capital is coming from fund managers that are, are investing on behalf of other people. Angel investors are investing in again, the same type of companies, perhaps a little bit earlier stage at times, but they’re investing their own money., so they’re making, they’re making the decision whether or not to, to, to invest in that company.
So what we do at Venture South is we’re, we’re effectively providing folks, an avenue to a, you know, professionally curated deal flow, the diligence, you know, the education piece, the, you know, the entrepreneur facing engagement. And then we’re just providing folks with the ability to make personal investments into these companies. We aggregate the capital on their behalf, but again, they’re make, they’re making the decisions to make the investments themselves.
Trevor Schmidt: Yeah. So I think that’s an interesting distinction, I guess. So even for Venture South, if it comes down to whether a hundred thousand, $250,000 is getting invested in this company, how’s that decision being made?
Charlie Banks: So we’re, you know, Venture South, you know, on the, on the, the headquarter piece of it., we’re looking at 20 or 30 deals every month, all over the Southeast, our internal staff and the managing directors, each of us, we will select a handful that we think meet the criteria for successful angel investment, which we’ll talk about here in here in a bit. so we’ll take those, that handful of companies. And then we’ll invite them into a formal screening meeting.
At that point, the members themselves will hop onto a screening meeting and it’s all virtual and it was even, it was even virtual for virtual was cool. The company founders will make the pitch and the, the investors, the angel investors themselves will then indicate to the Venture South staff, which ones they want to see move to the next process.
So they’re indicating to us what, you know, effectively, what they see is interesting. So then we will take the top vote getter, and then over the next four to six weeks, we will form a diligence team, comprised of the Venture South staff, and any of the members that raised their hand and said, hey, I’d like to help, do the research on the company. So then we’ll peel back the layers of the company. We’ll, you know, we’ll do our own modeling. We’ll look at the company, the success, you know, what it looks like at success, go to market plans or financial models, all, you know, et cetera., and then we’ll, we will present those findings, to the, the broader investment base of Venture South.
And at that point, the members will then say, they’re in or out. You know, if they’re in, they indicate to us, they wanna make the investment. You know, and then we, we, we, we collect funds that way and then we make the investment, into the company., so that’s kind of how it works in terms of the member involvement.
Trevor Schmidt: And then as far as after the investment is made, you know, in my mind for like the VC investment, a lot of times you’re, you’re having people on boards or you still have continued kind of advising roles with within the company. Is that something that Venture South does? Is that something your angels do? How does that work out?
Charlie Banks: Yeah. So, you know, we, we, board governance is a, is a huge element of success in this arena. Cuz ultimately the, you know, the, the board is there not necessarily from an operational standpoint. But more so and more importantly so, the strategically on growing the company and, and, and ultimately exiting it.
Uh, so we generally take a board seat, in most of our investments, sometimes it’s just an observation seat where it’s not necessarily a board seat that makes decision or votes on, you know, company business. So we’re, we’re generally taking, have some kind of board involvement. Myself, Matt and Paul, sit on, sit on some boards, but generally speaking, due the size of our, our network.
We’re able to reach out and, and call the expertise of the membership to see how it would best fit with that specific company., and then we also do a significant amount of education for our board members. In these companies, and that education is centered around our involvement being the voice of exit, right? So we want, we want our folks to be the ones that ask at every board meeting. What are we doing to, to build toward the ultimate idea of, of exiting the company?
Trevor Schmidt: Well, and, and I think that touches on, I mean, as I understand it, your focus is on kind of early-stage investments. Can you talk a little bit about why that focus and the risks and benefits for, for you and for the company and how you think about that?
Charlie Banks: Yeah, early stages is defined differently by everybody, right. Early stage, some is sometimes defined as, you know, all the way down into whether, you know, where it’s just. A concept. and you’re, you’re betting on that individual that team’s, idea. Often in other times, it’s a little bit later stage where they’re actually generating revenue.
And it might not be in a lot. It might just be $1 to one customer, but that’s post revenue, you know? So the way Venture South views, where we like to invest is, you know, right after the company has started generating some revenue they’ve got in an identifiable marketplace, they’ve got, you know, customers that are interested in their product or service.
They’re making money, you know, such that we can, we can model it out to what it would look like at scale. So we, we are generally not investing in companies that are pre-revenue. That’s that that’s perhaps too broad of a way to say that because there are times, and there are companies that, you know, like sometimes medical devices need, need some regulatory approvals and such.
So that’s a, that’s handled a bit differently, but we like companies that are in that early revenue phase and our money takes them to the point where they’re generating significant revenue in, in their industry.
Trevor Schmidt: And is there a specific industry or technology focused for your investments or are you open to really kind of anything across the board?
Charlie Banks: We’re we are very opportunistic angel investors. But generally speaking, you know, it’s tech enabled, there’s a lot of tech enabled kind of the, the, the best, broad way to say that, you know, there’s some kind of a mote in terms of, not necessarily IP, but you know, there’s just, there, there’s some kind of protection against, competitors.
Typically speaking, we don’t do a whole lot of consumer products. There’s just, you know, or, or anything that’s takes a, you know, it takes a tremendous amount of capital to compete. That tends to be a little riskier than we than we wanna do. But what that leaves you is a whole lot of everything, you
Trevor Schmidt: Right, well, and, and when you talk about looking for, for an exit in a reasonable timeframe as well, I think, you know, being tech enabled allows you to accomplish that a little bit better than some of these other companies.
Charlie Banks: That’s right.
Trevor Schmidt: So, you know, talk about the, the focus on the Southeast. You know, I understand that that your focus is kind of in this, this area. What was the thought process behind that? And how do you find some of the challenges and opportunities in this geography versus some of the other national markets that, that people are looking at?
Charlie Banks: Yeah. You know, so that all that simply boils down to valuation., we feel like the companies in the Southeast are valued according, you know, according to the, the, the risk profile, you know, you can look at Silicon Valley in Austin, Boston, New York, you can look at some of these other. Major venture hubs, and the valuations are significantly higher than what you would see in the Southeast.
Now that’s good for investors. Not often, you know, one could make the argument that is not, not as good for the, you know, for the, the companies. But what that, what that gives folks an opportunity to build a diversified portfolio of early-stage investments that are valued according to the risk that you’re taking.
And it gives you the best opportunity to make money. you have to be in this game to make money, right. If you’re doing it for any other reason, it’s venture philanthropy. So, We, we, we talk about that often is that, but being in the Southeast, you know, we, again, it just, it it’s very simply, we feel like the valuations are in line with the risk.
Trevor Schmidt: Talk, you mentioned this a little bit as, as far as when you talked about balancing out the team between your managing directors, but how much of your time is spent with attracting investors versus identifying investment opportunities. And how do you think about the different sides of those jobs and how important it is to, to Venture South?
Charlie Banks: So when we first started venture south, we were, we were, you know, we were a startup ourself. We’ve had to drink our own Kool-Aid for about a decade now. When we started Matt Paul and I had to do all of it. Every bit of it, you know, from deal sourcing to diligence, to portfolio management, to investment relations.
I mean the tax side of it, we had to do all of it. So over the course of the years, like every successful company that starts, the founders have the, the, the ability to now hire out what you’re not good at what you’re specifically individually, not good at. So Matt Paul and I have been able to do that, over the course of, of us building this company.
I spend the, I’d say the vast majority of my time, 60, 70% of it is on sourcing the investors themselves. So we we’ve got some pretty, pretty significant growth plans ahead of us for Venture South. So, as we expand the network, a lot of my time is spent looking at the different markets and entrepreneur hubs across the Southeast to feel, you know, to get a better feel and understanding of where, our model fits.
Trevor Schmidt: Mm. Yeah, and so I guess, do you get a sense as far as the balance, do you feel, and, and maybe this is talking about your growth plan, but I mean, do you feel that there’s more investment opportunities than you have for investors or do you have right now more investors than you have investment opportunities?
Charlie Banks: We don’t have a; we don’t have a pipeline problem. No, there, yeah, there are a lot of fantastic companies, in the Southeast and, and so part of our growth plans is, is, is to be in these various hubs so that we are in a position to, to know about these companies, you know, the, the, the best companies always get funded, you know, so it’s, it’s not a, you know, you’ll hear often about how there’s a, you know, a capital availability issue in the Southeast.
And historically yes. You know, it’s hard to raise capital in the Southeast, but, the best companies always get funded and our growth plans are there such that we are in a position to, to be that capital provider in all of the different hubs across the Southeast.
Trevor Schmidt: Well, and I think that provides a nice segue, cuz I mean, there are certain economic uncertainties that are going on right now. You know, seeing in the past six to 12 months, you’ve seen a significant decrease in some investment opportunities in some activity, in, in the space. What do you feel as far as those pressures now and where do you see next one to three years for the startup community in, in your investments?
Charlie Banks: Historically some of the most successful companies in the world have been started in peculiar economic times. You know, you look back at post ’08 timeframe and, and you’ve got folks made a tremendous amount of money back in companies that were started in that recession.
so we, we are, we’re pretty bullish on, on what it looks like. You know, we’re just remember back I said earlier is that angel investors are folks that invest their own money, and oftentimes this is a very small allocation of their overall investible assets, perhaps only 5%, sometimes less. So I won’t go as far as to say that the allocation that people are putting into this asset class is fun money, but it is, it is certainly money that folks have already put aside or they should put. For incredibly risky type, type investments, you know, and that alternative asset class and that’s where we fall.
We’re not terribly concerned that capital is gonna dry up because there’s uncertainty in the market. Again, like I said, best companies get funded, people still have a whole lot of money and if they are doing this in a way that they’re understanding portfolio math, meaning that they’ve gotta make enough of these investments to where the good ones outweigh the bad ones, and they’re doing this in a, an efficient manner so they’re not tapping outside of their, you know, their set boundary of allocation., so that’s kind of my, my two ways to answer that is that uncertainty breeds success at times in the market. and people shouldn’t, people should not be investing, large, allocations of their overall vegetable assets in, into what we do.
Trevor Schmidt: Is there any part of almost like a countercyclical aspect of angel investing where if they can’t get returns in the stock market or other places, they, they look to angel investing or is that not something that you’ve seen.
Charlie Banks: Yeah. You know it, some, sometimes you we’ll hear that sentiment from folks. More times than not folks come to us because they see it’s, it’s fun. It’s exciting. You know, they’re getting exposure into new technologies. you know, we’ve got an investor base of almost 500 people. So from the collective expertise of nearly 500 extremely smart people that are primarily based in Southeast, there’s an element of a, you know, it’s kind of folks call it the intellectual country club.
So it’s, it’s just a whole lot of fun but we also take it very seriously, you know, and we’re extremely ROI focused. so you know, the caliber diligence is such that folks understand that you know, that we’re in this to make money. And so you combine all that and what you come up with is an opportunity to, you know, make money, have fun and do some good.
Trevor Schmidt: Yeah, that sounds fun. From the investor’s side. What do you, what are you hearing from your, your, your companies that you’re working with? Are they concerned about the economic environment or are they just pushing ahead and…
Charlie Banks: There is a little bit of concern. It’s not necessarily availability of capital. It’s more so that we’re seeing some of the valuations get pushed down a bit. Oftentimes it’s because the investors are using, using the uncertainty there to their benefit, which, you know, it, it, that that happens.
But no more times than not, I mean the companies that are doing what they need to do and meeting and meeting the milestones and growing year over year and quarter of a quarter, the capital is still available. We’ve seen some, some companies that have expedited their thought process around time to exit.
You know, cause we don’t know what it looks like, you know, 12 months out or so, some of our boards are having a little bit deeper discussions on, around exit timing. So I think we’ve got, we’ve got one right now that that is, you know, about to exit and their decision to exit this time was really based on, you know, let’s go ahead and strike what the iron taught.
Trevor Schmidt: So many of our listeners are, are, are founders or someday hope to be, and, and maybe thinking about taking on investment at some point in time, you know, what advice would you give to a founder who’s thinking about taking on an, an angel investment or preparing for that screening meeting or that pitch?
I mean, cause in my mind, you know, since you’re working with a panel of individual investors, the angel pitch may be a little bit different than it is if you’re working directly just with VCs. So tell me how you think about that. All.
Charlie Banks: Sure. Yeah, no, I mean, it, it absolutely starts with educating yourself on the process. And, and Trevor, part of what you just mentioned is that kinda knowing your audience. If you’re pitching a, you know, tech enabled B2B software company, to strictly medical device investors, that doesn’t go over well. So it’s one educating yourself on the process, educating yourself on, you know, who your audience is.
And two, knowing your numbers. I can’t, we, we cannot stress that enough is that, you know, companies fail for one reason, and one reason only, if they run outta cash, that is the only reason companies fail. Now you can argue people, people love to argue this point all the time is that well, they say, well, no, there wasn’t product market fit, or I didn’t have the right person in the sales role.
Well, the byproduct of those two were not having enough revenue and not having enough cash, so the company fails. So it’s keeping an eye on your cash balance at all times and understanding, you know, your runway. Once you have a good handle on your runway, that also dictates when you need to raise money. We spend a lot of time with founders on, on the, the raise timing.
Trevor Schmidt: And so what are, what are some of the thoughts as far as that, both with regard to, when should I first be reaching out to Venture South? Is it when you know, I need an investment in two to three months, or is it, I, I should be like, hey, from day, day one, trying to have those conversations?
Charlie Banks: I mean day one day zero. Yeah, I mean, you, you can’t do it soon enough. You’ve gotta be on the radar of folks like us pretty early, and that’s not a venture style dynamic, that’s a capital raising dynamic. Even, even. You know, at that conceptual phase, because in order to raise money effectively, you have to be, you have to position the company for funding. The way you do that is understanding what the investors are wanting. Having understanding of that early so that you can plan accordingly is, is pretty critically important.
Trevor Schmidt: So aside from, you know, the, the financial position and knowing your numbers, what are some signals or cues a company could give that suggests that they either are a good candidate for investment, or that’s gonna send up red flags to, to either Venture South or to your, your angels.
Charlie Banks: Yeah. If, if your growth and runway shows you running out of money, that’s a, at least a really good start as to whether or not you should be a company looking to raise funding, you know? So if you’re. You know, if your growth plans dictate that you, you know, you’re gonna run out of money at some point, you know, that that’s a, that’s a great place to start.
If you’re in a market where there’s a lot of M&A activity, and you’re building the company to exit, that’s another really good place to be, in terms of attracting outside capital. We are not interested in investing in lifestyle companies. If you’re starting a company to pass it down to your children, we’re not a good fit. So just kind of understanding all of that, going into building a company or raising money, puts yourself in a really good, in a good place.
Trevor Schmidt: And how much of, of your investment thinking goes into team and, and makeup of the team and how, how do you get to know that? And is that something that either people can plan for or present well?
Charlie Banks: If you look at our diligence report, exit strategy and the team is the, the top criteria, that we look at. Teams are very important because, you know, we have to have the gut feel on whether or not. You or this team is the one execute on execute on the plan that you’re presenting.
Complimentary teams is something that’s very important. Oftentimes we’ll look at a, you know, a CEO, founder, type role, and, you know, is this person a, a sales-oriented CEO or, or are they a you know, an R&B oriented CEO? Nothing wrong with that. Nothing wrong if, if, if that’s the case, but, is there a complimentary person on the team that can sell the product or service? So I’d say those are two of the elements that I think we look at the most is the complimentary team piece and, you know, and the coachability, that’s another, a big piece of it.
Trevor Schmidt: You know, is there area technology or, you know, a type of company that like you personally are excited about right now and seeing where it goes in the next five years? Not a specific company, just like a category of company that you think has interesting opportunities.
Charlie Banks: Yeah. If, if, if you were to ask me that yesterday, I probably would’ve had a different answer, but, I guess, you know, I woke up today thinking of about the, you know, how much advancement is gonna be made in the ag tech industry. You know, this new telescope, the new telescope images that came out this week, it just it’s, that’s some fascinating, fascinating stuff.
So, and I think. You know, as that as the AgTech industry takes these giant advancements in, in technology, I think we’re gonna see, we’re gonna see impacts that we don’t quite even understand yet. So, you know, I’ve kind been doing a good bit of reading on, you know, some, some of the, these ag tech companies are coming out in the Southeast, and we’re pretty excited.
Trevor Schmidt: Yeah, and I, I think it is a good opportunity, especially for this geography. I mean, there’s just a chance to really cement a foothold in, in, in both ag tech and, and opportunities that come out of that. But
Charlie Banks: Yeah. Yeah. And that’s, and also it’s also important to have investor bases that understand industries. And you know, there’s, there’s been a whole lot of money in the Southeast generated from farming and, you know, in the agriculture industry. So to the extent that we can put people, with very specific industry expertise into opportunities that, you know, they know a lot about, the recipe is there for success.
Trevor Schmidt: And how about kind of the flip side of that coin, is there an industry that you see past its prime and, and not really something that, that is gonna be around in five years, 10 years?
Charlie Banks: I’m very hesitant to answer that because I know there’s gonna be one founder on here that says, well, well, crap, I’m outta luck. You know, the Prop tech has been one that,
Trevor Schmidt: I’m not sure I’m familiar,
Charlie Banks: Yeah. Like, real estate technology,
Trevor Schmidt: Yep. Okay.
Charlie Banks: you know, yeah. So, a couple years ago we saw a, you know, a, a big influx of those deal of, of those type opportunities. That slowed down considerably, you know, I don’t know if it’s because people were focused on making money in real estate and not, and not trying to solve problems within the real estate industry.
But that’s one that we’ve seen a little bit of a slowdown. FinTech is another one that we’ve seen a bit of a slowdown, but honestly, I mean, there, if you ask folks that are purely FinTech investors, they are just as excited now, as they’ve ever been about kind of what the next, you know, handful of years look like in that industry.
So, I mean, I, that was a very long and diplomatic way to not piss people off by my answer.
Trevor Schmidt: that’s a skill you’ve gotta have, I’m sure.
Charlie Banks: yeah, to the extent, yeah.
Trevor Schmidt: And how, how much do you work with kind of the universities around the Southeast to kind of either identify, you know, new companies that are coming out or to kind of incubate the venture communities coming out of these universities.
Charlie Banks: A lot. Yeah. We, we, you know, from, from large universities to small colleges. You know, I mentioned to one earlier about the, the two young kids. I mean, that was a, a small liberal arts college base in South Carolina. We’re we’ve been able to make great inroads with, with, with small colleges like that, that have fantastic business program, business programs, all the way up into, you know, large research universities that are doing some FA doing some crazy, awesome stuff with you know, med devices and drug discovery and some other, and some other really cool industries.
So that, that is very important to us is to have those relationships that, you know, as companies are spun out of these universities, whether it’s through. You know, a founder with a tie of the university or some kind of yeah, you know, commercialization office. It’s important for us to be positioned to, to attract those type opportunities.
Trevor Schmidt: and, and you’ve talked a bit about it, but you know, you mentioned Venture South is growing, has these ambitions going forward? What do you see for the company five years from now? 10 years from now? What’s on your horizon?
Charlie Banks: You know, there are still states in, you know, that we’re not in, we don’t have a big presence in Alabama and Florida, being two. Next week, we’re kicking off, our first group in Tennessee. so we, we, we’ve got a group in Chattanooga that’s starting up. You know, we’re pretty well covered in north and South Carolina. We’ve got one group in Virginia looking at some other opportunities in Virginia. I say Kentucky’s another one that, that have got some really interesting companies coming out of some of these accelerators.
We’re also looking at how we continue to support the companies as they grow, you know, some potential fundraising opportunities for later stage companies, as well as even earlier stage. So I think there’s a whole lot of opportunity for us to support companies, you know, across the spectrum of development.
Trevor Schmidt: So, do you think your geographies will ever reach outside of the Southeast, into other underserved markets? Or are you, you pretty set on that, that focus?
Charlie Banks: Yeah, we’re, we’re pretty set. We do have a large group of investors that live outside the Southeast, but you know, from a geography standpoint, I don’t see us moving outside the Southeast, in terms of footprint. A quick side story is that the name of venture south, the way we came up with that is that back to my, my earlier comment about valuation in the Southeast, you know, we were very bullish in the valuation, so we’ve always wanted investors to come to the Southeast to make investments. So we want the high-net-worth folks to venture south and, and what, you know, we’re, so from a, our, our logo is a, is a duck, and birds migrate south. So that’s kind of the, the story around the name.
Trevor Schmidt: I like the unified branding. It works well.
Charlie Banks: Yep.
Trevor Schmidt: So if one of our listeners was like, I, I, you know, I really wanna do what, what Charlie’s doing. It sounds great. You know, he talks about being excited to wake up each morning and it sounds like an interesting ecosystem. You know, what are the steps that that person should be thinking about taking and how do they get involved? Kind of either outta school or while they’re in school to, to kind of set the path forward for them.
Charlie Banks: I I’d say the education piece, you know, I mean, get educated on the process, get educated on, on the terminology and verbiage within our industry. You know, it’s always so refreshing to me that when an undergrad or a bid school business school, or a grad school student comes and, you know, and already has an understanding of the valuation impacts on a, on a cap table and, you know, and how the cap table impacts the waterfall and all this stuff that we do on a daily, daily basis that, you know, the college kids, if, if they understand that that puts them way ahead of a lot of their peers.
There’s an element of kind of a workforce development piece that we’ve took a, you know, we we’ve taken some deliberate proactive steps to try to impact through our relationships with some of these, with these colleges and universities, specifically Furman, we’ve got a fantastic pro partnership with Furman university, through an analyst program that we’ve started with them.
Uh, so just get involved in the ecosystem, get ed, you know, educate yourself on, on. What we do, how we do it, and you know, and there, there, there are gonna be plenty of opportunities, in the coming years as, as to be venture practitioners in Southeast.
Trevor Schmidt: Tell me a little bit more about that program with Furman. What’s that look like?
Charlie Banks: So we started the, the venture south analyst program, in partnership with Furman and, each semester we have 8, 8, 10 or 12 kids. It is very competitive to get in and we’ve effectively, ingrained them in every element of our process. So they sit it on diligence teams, they come to our meetings, so it’s been a, it’s been a really fantastic partnership and know big kudos to Furman university for being proactive and, and trying to, and trying to, you know, put their kids in these, in these types of environments.
Trevor Schmidt: Yeah. Sounds like a great program. So we are the Founder Shares podcast, and so I always like to ask all of our guests, if you could share one piece of advice with someone thinking about starting a company, what would it be?
Charlie Banks: Understanding the impact of cash in the business. You, you have to be funded, right? You have to have enough cash to grow. I’ve learned the hard way, some my early endeavors that thought that, you know, we could just make money to fund the business, you know, we can, you know, and that’s, that’s a great way to, to go about it. But if you’re really trying to get the scale that you’re looking at, you’re, you know, you have to have cash on the balance sheet to support the growth.
Trevor Schmidt: Have you, have you seen kind of in your experience, a company that from all sense and purposes, all that pointing towards like a successful company, but was not able to either generate the cash or generate the revenue that they needed through other means? Like a company that should have been successful, but just because they didn’t have the cash, couldn’t move forward.
Charlie Banks: Yeah, absolutely. There’s a lot of those, honestly. And oftentimes the reason they weren’t successful, it was because early on they didn’t really plan for that accordingly. Yeah and they made decisions and, you know, and sometimes they even grew too Fast. And it was just mushroom growth element that they just toppled over. So yeah, I mean, so those were out there, but it just kind of underscores the importance of, of understanding that the lack of cash is, is the number one reason companies fail.
Trevor Schmidt: You know, well, Charlie I really appreciate kind of the insights that you’re providing and kind of what you’re doing and, and the information you’re able to provide today. You know, if our listeners are interested in connecting with you or interested in connecting with venture south, what’s kind of the best way to reach out.
Charlie Banks: Venturesouth.vc, is our website., that’s probably the first place to start also pretty active on social media. So, you know, Facebook, LinkedIn, Twitter, things of that, you know, we provide a lot of content there. I’d probably point, you know, another great place to go is, our blog on the website. We’re pretty active writers on, on, on things associated with, with the industry.
you know, I’m personally a, an avid reader. So, our website has a list of books that, it’s kind of a running list of books that we tell all folks to read. Basil Peter’s Early Exits is one that I, I always tell people to read. Investors and entrepreneurs a like that that’s a, that’s a book that folks need to really understand. Those are all good places to get, to get started with.