Angel investor networks have officially launched in Charleston and Spartanburg. The Lowcountry Angel Network and the Spartanburg Angels are affiliate members of the South Carolina Angel Network (SCAN) and join other established angel networks in Columbia, Greenville, and Asheville, as well as the Tiger Angel Network for Clemson alumni. A Palmetto Angel Fund is also available for individuals who want to help South Carolina startups, but don’t want to attend angel group meetings or get involved with investment decisions.
Lowcountry Angel Network (LCAN)
LCAN announced its launch on February 23rd. “As the entrepreneurial ecosystem in Charleston grows, we see increasing demand among potential investors for access to deal flow and structured investment processes,” said Josh Silverman, managing director of the Lowcountry Angel Network.
“We also realize the importance of connecting with other investors across the state to aggregate more capital around the best opportunities emerging from the ecosystem. Twenty members have already signed up and we anticipate expanding our membership to 50 by the end of the year.”
The founding members of LCAN include a variety of experienced investors, entrepreneurs, successful business and community leaders, and professional experts across diverse business services.
Silverman scheduled two meetings for interested investors and sponsors. The first was scheduled for March 11 at 5:30 pm at Jericho Advisors in West Ashley and the second interest meeting was scheduled for March 25 at 5:30 pm at the Daniel Island Club on Daniel Island.
“We’re looking for experienced investors as well as those interested in learning more about angel investing. Good angel investments generate a positive financial return for investors, have a beneficial impact in our community by supporting scalable businesses, and offer fulfillment for our members as they lend experience and mentorship to fledgling ventures,” said Silverman.
Spartanburg Angels (SA)
The Spartanburg Angel Network is now open for business, operating as San Investments LLC. Also an affiliate of the SC Angel Network, the Spartanburg group has launched a website and is ready to start funding local early-stage companies, according to Managing Director Paul Clark. Its initial members include CEOs, active professionals and retirees from a range of industries. More than 30 people attended Spartanburg Angels’ first full member meeting in late February, exceeding the group’s initial goal. Clark said in a telephone interview that the network will “probably make its first investment in April.”
“Spartanburg Angels is off to a great start,” Clark said in a statement. “Our first two companies presented to the group in February, we took our first company into our due diligence process, and we are looking forward to funding some of the great ideas in the community. We’re impressed by the enthusiasm for angel investing in Spartanburg and look forward to seeing more people join us as we grow the group from here.”
John Bauknight, one of the first members, said in a statement: “We have been working on a network of local investors to fund our entrepreneurial community for many years, and the formation of Spartanburg Angels is a key part of the ecosystem that has been missing.”
Spartanburg Angels encourages potential investors to attend its meetings the third Wednesday of each month at the Spartanburg Area Chamber of Commerce, a sponsor. Spartanburg Angel Network also keeps an office in the chamber office at 105 N. Pine St.
The organization also provides educational seminars for investors, entrepreneurs, advisers and those interested in early-stage companies. It will hold a seminar on early-stage company investment term sheets on March 27.
The Angel Investment Act and the Capital Market Study
The High Growth Small Business Job Creation Act (“Angel Investment Act”) passed in June 2013. The law created a 35% tax credit for “angel investors” who make investments in early stage, high-growth businesses in South Carolina.
The SC Council on Competitiveness supported the law – one of seven recommendations in the South Carolina Capital Market Study released by the Council in January 2013. The study found South Carolina’s high-impact firms are a major driver of job creation in the state, accounting for 66.8% of net employment gains between 2004 and 2008. However, the lack of access to capital was an obstacle to growth for these firms, effectively stalling job creation.
In order to become eligible for angel investments that qualify under the tax credit, businesses must register with the Secretary of State and meet the following requirements:
- located and headquartered in the state of South Carolina
- no more than five years old before the qualified investment was made
- have fewer than 25 employees
- a gross income of $2 million or less in any complete fiscal year before registering.
Qualifying businesses must also be primarily engaged in one of the following activities:
- Software development
- Information technology services
- Research and development
- Ambulatory health care services
- Nursing and residential care facilities
To qualify as an angel investor, individuals must have a net worth of $1 million, not counting primary residences, or an annual income of $200,000 for at least three years.
Josh Silverman | Lowcountry Angel Network
Paul Clark | Managing Director of VentureSouth
Lowcountry Network Media Contact:
Paul Swiergosz | silicon harbor communications
About the South Carolina Angel Network
The South Carolina Angel Network (SCAN) is working to create a more efficient marketplace for early stage capital in South Carolina. SCAN operates professionally managed angel investment groups and funds across the Carolinas, with more than 150 individual investors making investments through its affiliate organizations. For more information: www.scangelnetwork.com.