- Related
- WRAL TechWire
- Wilmington
I have been
spending a lot of time at the beach lately, without actually spending any time
on the beach. A couple of weeks ago, I was in Myrtle Beach, South Carolina,
watching eight startups take the stage at the conclusion of a new accelerator
program.
The following morning, I squeezed into an unusually crowded 1 Million
Cups gathering, part of an entrepreneurial community that has been deliberately
assembling itself over the past several years. I wrote about the transformation happening in Myrtle Beach previously here.
Last week I headed
back to the Atlantic, this time to Wilmington, North Carolina. And there is
even more happening there.
On Thursday,
roughly 300 entrepreneurs, investors and ecosystem leaders packed Cape Fear
Community College’s Union Station for the fourth annual Investor Buzz-In,
organized by the Network for Entrepreneurs in Wilmington, better known as NEW.
The event has become something of a coastal version of a venture capital
conference: startup pitches mixed with investor “reverse pitches,”
panel discussions, conversations and, perhaps most importantly, a lot of people
meeting one another. Organizers describe it as the only venture capital
conference in North Carolina east of Raleigh. This year’s event sold out.
The panels were
populated by investors from across NC and out of state, all recognizing that
there is deal flow to be had at the coast. And the scene is industry-diverse, and
there were notable rock-star founders in the room. Among the startups that
pitched during the day, I saw:
●
RCOAST – Dr. Christy Swann brought
her experience building sensors used to analyze Mars back to Earth, with novel
machine learning techniques that tie to seasonal lidar-based coastal mapping.
RCOAST informs coastal mitigation projects, the insurance industry and other
stakeholders of the multi-billion dollar coastal erosion industry. She’s just
closed a $945k pre-seed round and is selling to clients from NC to Texas.
●
Skillmaker – Robin Cowie was the
creator of The Blair Witch Project and architected significant growth of the
Madden video game franchise before choosing Wilmington for his latest venture.
He’s created immersive reality environments to train automotive repair workers
and inked a national deal with Napa Auto Parts. Blending film and storytelling
to build the workforce of the future.
●
Predicate – Dr. Morris Nguyen was
a practicing doctor and saw repeated issues for his patients that he believed
could be solved with AI. Predicate, NC TECH’s Data Innovation Company of the
year last year, is building the intelligence layer to bring together and
understand all your wearable biometric data with real-time contextual analysis
and natural language processing. They’re running trials on 5 continents, all
from a Wilmington HQ.
There is a
temptation to look at an event like this and declare that Wilmington has
suddenly become an entrepreneurial city. True: it has become a startup hub. But
there is nothing particularly sudden about it.
The Overnight Success That Took More Than a Decade
Jim Roberts has
been one of the people beating this drum for a long time. He arrived in
Wilmington in 2013 to lead the newly established Center for Innovation and
Entrepreneurship at UNC Wilmington. He later founded NEW and Wilmington Angels
for Local Entrepreneurs, or WALE. Looking back at Wilmington’s entrepreneurial
landscape before that period, Roberts has recalled that there simply wasn’t
much organized startup advocacy, and not many people in the room.
The contrast with
today is striking. NEW now describes a community encompassing more than 1,000
entrepreneurs. Its monthly startup events reportedly average around 170
attendees. UNCW’s CIE, under the leadership of Heather McWhorter, operates
mentoring programs, startup programming and a weekly 1 Million Cups gathering
championed by Jack Fleming. Angel networks and investment organizations
including WALE, VentureSouth and Cape Fear Ventures have added pieces of a
local capital infrastructure.
But Wilmington also
has something that many communities trying to manufacture an entrepreneurial
ecosystem don’t have: examples of what success actually looks like.
Live Oak Bank,
founded in Wilmington in 2005, became more than a successful bank. It helped
create a concentration of financial technology expertise that subsequently
produced companies including nCino and Apiture. The three companies
collectively have hired more than 1,000 UNCW graduates creating precisely the sort of experienced
technical and operational workforce from which additional companies can emerge
And then there is
Vantaca. The Wilmington software company grew out of a local
property-management business whose founder couldn’t find software capable of
doing what he needed. So his team built it. Last October, Vantaca announced a
minority growth investment of more than $300 million at a valuation of $1.25
billion. Wilmington now has another unmistakable demonstration that a
significant technology company can not only start here, but remain here while
scaling nationally.
Those stories
matter for reasons that extend beyond jobs or valuations. Successful
entrepreneurial ecosystems recycle. An employee learns how to scale a company,
then joins another. An executive becomes a mentor. A founder becomes an angel
investor. Engineers leave established companies to start their own. Customers
become sources of ideas. Investors who made money once become willing to take
another risk.
Over time,
knowledge, talent, relationships and capital begin circulating through a place
rather than merely passing through it. That is when entrepreneurial activity
starts becoming an entrepreneurial ecosystem.
Why Are the Investors Here?
Which brings us
back to the room at Investor Buzz-In. When Roberts held the inaugural event in
2023, he reported attracting 53 investors representing more than $1 billion in
capital. By last year’s event, nearly 300 people from 15 states gathered in
Wilmington. Last week’s fourth edition again filled the 300-person venue.
The important
number isn’t 300. It is the number of people in those 300 who didn’t have to be
there.
Investors have
plenty of places to spend a Thursday. Many of North Carolina’s venture firms
are headquartered several hours away in the Triangle or Charlotte. Investor
Buzz-In is meaningful because some of those people increasingly consider
Wilmington worth the trip.
Virginie Raphael
runs the Full Circle Fund out of New York. She has led a successful career in
investing, including being an early investor in Uber’s SEED round as they were
trying to legalize their disruption of the entrenched taxi industry. She has
already invested into the Wilmington ecosystem and described that she joined
the event with knowledge that there is regional depth and breadth to continue
to explore.
Her example is
important because entrepreneurship and entrepreneurial ecosystems aren’t quite
the same thing. Entrepreneurs can exist almost anywhere. Ecosystems develop
when the infrastructure surrounding those entrepreneurs becomes dense enough
that starting and scaling a company becomes progressively easier. And
infrastructure doesn’t always look like infrastructure
The Infrastructure You Can’t See
I’ve been thinking
and writing about this a lot lately. In Myrtle Beach, I watched a community
deliberately build an entrepreneurial ecosystem from relatively modest pieces:
a municipal coworking facility, recurring gatherings, an accelerator, mentors,
founder networks and organizations willing to convene people repeatedly. None
of these investments individually transforms a regional economy.
Their power comes
from accumulation. A meetup leads to a relationship. A relationship leads to an
introduction. An introduction leads to a customer. A successful entrepreneur
mentors another founder. An investor who traveled to town for one event comes back
to see another company.
Eventually the
flywheel begins turning a little faster on its own.
Wilmington is
considerably further along that curve. It has a university entrepreneurship
center that dates to 2013. It has recurring founder gatherings. It has angel
networks. It has experienced technology executives. It has successful companies
producing talent. It has entrepreneurs who can point to local examples of
companies that scaled. And increasingly, it has connections into the larger
capital networks elsewhere in North Carolina and beyond.
I heard repeatedly
during the day from founders, investors and stakeholders that moved to
Wilmington not just for the beach, but for this ecosystem. Absolutely the beach
is a draw. But Robin Cowie could have built his company anywhere. He chose
Wilmington over California because of the collaborative culture here versus a
more cutthroat culture he saw in Santa Cruz, the other city he considered.
Richard Stroupe
vacationed on the NC coast as a kid. Moving here after a long career with the
CIA and defense sectors, including founding and exiting his own companies was
appealing. But it is the entrepreneurial energy that sealed the deal to move
from DC to NC and to form Cape Fear Ventures to invest further in the
ecosystem.
It is great to have
great founders, mentors and investors in your back yard. These are all
parts of what I’ve called institutional infrastructure. But there is
another lesson embedded here that economic-development organizations sometimes
overlook. You don’t necessarily have to own all of your infrastructure.
Wilmington sits
roughly two hours from the Research Triangle. That proximity allows its
entrepreneurs to tap into investors, accelerators, research institutions and
statewide organizations without having to recreate every one of them locally.
NEW explicitly describes this as an ability to “borrow”
infrastructure from the Triangle while building Wilmington’s own capabilities
at the coast.
Investor Buzz-In is
almost a physical manifestation of that strategy. Instead of asking every
Wilmington entrepreneur to drive to the capital, the Buzz-in brings some of the
capital to Wilmington.
Momentum Is Not the Finish Line
This is where the
Wilmington story becomes particularly interesting to me. The question is no
longer whether entrepreneurship can happen here. Live Oak, nCino, Apiture,
Vantaca and a growing collection of younger companies have settled that
question.
The more
interesting question is what Wilmington builds next. There are indications that
the ecosystem remains thinner than the turnout at events might suggest. Local
investors have said that more local capital needs to be activated. Others have
pointed to the need for greater concentrations of investable companies before
larger numbers of professional investors can justify spending significant time
here.
UNCW’s Heather
McWhorter has said the CIE’s physical space is routinely full and that the
community needs additional places for entrepreneurs to gather. Roberts himself
has pointed to gaps in specialized professional services for startups including
more incubators and accelerators.
Those are
second-order problems. They’re the kinds of problems that begin appearing
because the first layer of infrastructure is working. Thom Ruhe, CEO of NC IDEA
asked panelists about what is still missing in the ecosystem. Who should be at
these events that are not yet participating? What activities, organizations or
people could help take the current momentum and launch it into exponential
growth?
The responses were
consistent. While some city officials were in the room, there is a lack of
broader support from the state and federal government. Economic development at
that level still seems focused on recruitment of existing companies from other
places, rather than building from within. Ruhe shared research from the
Kauffman Foundation that found the economic impact of a successful startup is
at least 3 generations. In other words, companies grown in place tend not to be
recruiting targets by other states or regions during their first ~50 years.
Supporting
entrepreneurial growth is a far stronger economic strategy than recruitment,
with much higher dividends back into the community.
This may be the
moment when Wilmington has an unusually important choice to make.
Entrepreneurial ecosystems can reach a certain level organically. Founders find
one another. Successful companies attract talent. People like Roberts spend
years connecting people who ought to know one another. Universities create
programs. Investors begin paying attention.
But eventually, momentum creates demand for more durable institutions.
That can mean
additional early-stage capital and better mechanisms for activating local
wealth. It can mean more accelerator and commercialization capacity. It can
mean specialized professional services that understand venture-backed
companies. It can mean physical spaces where founders, researchers, investors
and experienced operators encounter one another routinely rather than
occasionally.
Most importantly,
it means treating these things as economic infrastructure rather than
extracurricular activities for entrepreneurs. Roads help goods move. Broadband
helps information move. Airports help people move. Entrepreneurial institutions
help ideas, talent and capital move.
Wilmington has
reached the point where enough of all three are circulating that the results
are becoming difficult to dismiss. I can’t wait to see what comes next.
