The founder journey can be incredibly stressful and challenging. Aside from the pressure to succeed, founders are also responsible for the livelihoods of their team and providing a good return on investment for shareholders. With so much at stake, it’s no wonder that entrepreneurs are twice as likely to have suicidal thoughts.
As an entrepreneur himself, Paul Clark is passionate about improving mental health for founders across the South. Working as a venture capitalist for many years, Paul has seen countless founders experience the same struggles and stresses that he also experienced. Through VentureSouth and VentureCarolina, Paul helps founders navigate the ups and downs of the entrepreneurial journey, so they feel supported and less alone when faced with challenges.
Tell us about VentureSouth and its history and growth. How does VS support entrepreneurs?
VentureSouth is an early-stage investor based in Greenville, South Carolina. We invest in startup companies across the southeast. We started in 2008 with our first angel group, which was called the Upstate Carolina Angel Network, based in Greenville. And over the 15 years since then, we've grown to run and manage angel groups and funds across the Carolinas and adjacent states. Our primary role is to provide capital to early-stage technology startups in the Southeast, assisting entrepreneurs in their fundraising efforts to bring their ideas to life.
Tell us about the state of venture capital in South Carolina. Where are the strengths? Where are the gaps? What does growth look like?
While the landscape varies from state to state, generally speaking, early-stage investment in our region doesn't meet the expectations set by the abundance of talented entrepreneurs here. This has been a consistent challenge, true 15 years ago and to a slightly lesser extent today, as more people are getting involved. However, the Southeast isn't typically top-of-mind for early-stage venture capital funding.
Though numerous angel groups, including ours, have emerged and grown, and a handful of venture capital funds exist—particularly in bigger cities like Atlanta, where there's a larger population—South Carolina has limited venture capital activity. Even in places like North Carolina, despite their wealth and technical expertise, the level of funding falls short of what one might anticipate.
How should entrepreneurs and founders approach venture capital investors and funding?
When approaching venture capitalists as a startup, begin with knowledge. Research and determine if venture capital is genuinely necessary and beneficial for your company, as it may not be the right path for most businesses seeking growth. Understand that it should align with your company's specific needs and circumstances.
Next, identify the right partners to work with, recognizing that every funding source and VC fund is unique. Conducting thorough initial research is also crucial.
Lastly, exercise patience. Raising capital from unfamiliar individuals is a time-consuming process. Building rapport, determining compatibility, and forging long-lasting partnerships all take time. Be prepared for numerous conversations and a significant investment of time before achieving the desired outcome.
Has the VentureSouth business model evolved since its formation? (Bigger fund? Expanded focus? Or concentrated focus on industry?) What does VentureSouth's future look like?
We began as a 50-person angel group in the process of rebuilding. Today, we have grown into a 550-person angel group covering the entire Southeastern region. While our core mission remains unchanged—to invest in the best startup businesses in the Southeast—we've undergone significant evolution. We've not only increased our scale but also broadened the scope of companies we consider for investment. Additionally, we've consistently strived to enhance our capabilities as a learning platform.
Tell us about SharpenFounder. Why is this an important resource for entrepreneurs? Who has access to it?
Sharpen Founder is a collaborative effort between VentureSouth and VentureCarolina, our educational nonprofit arm, along with Sharpen, aimed at supporting early-stage founders in enhancing their mental health and resilience. Its core purpose is to address mental health challenges faced by founders and CEOs of early-stage companies. VentureSouth's involvement includes initial funding for Sharpen and the creation of founder-centric content, including video interviews featuring founders sharing their stories and challenges.
We pursued this initiative for several reasons. First, it aligns with our commitment to assist portfolio companies. Additionally, starting a company can be a demanding endeavor, often requiring a unique level of determination. Sadly, mental health issues, particularly anxiety, stress, depression, and, in severe cases, suicide, disproportionately affect entrepreneurs.
There is a growing body of evidence suggesting that investors should pay attention to this issue due to its profound impact on mental well-being. In light of this, we sought to create an affordable means of supporting entrepreneurs on their entrepreneurial journey, recognizing its critical importance.
From your POV, what have you seen founders struggle with in terms of their mental health?
Founders experience a wide variety of stress factors that affect their mental health. They have to answer to concerned investors, manage the livelihoods of their teams, and navigate unexpected deviations from their plans – a common occurrence in startups. Consequently, founders often find themselves in highly stressful situations where they are accountable for any setbacks that happen in the business. They feel alone and often don’t reach out for help.
How do you care for your mental health as a founder?
My top recommendation would be to acknowledge that you're not alone in facing the challenges of startup entrepreneurship. Every other startup founder encounters similar issues.
Seek out someone to talk to, as you'll undoubtedly discover fellow entrepreneurs who share your experiences. At Venture South, we provide our portfolio companies with access to the content we've invested in. Additionally, during the COVID-19 pandemic, Venture Carolina secured a grant to extend this resource to any startup founder in South Carolina.
My second piece of advice is to encourage people to take advantage of these resources. Explore the content, verify its value, and you'll find reassurance in the fact that others have overcome similar hurdles. Initiating this process can lead to a support network that helps you and others navigate the challenges of entrepreneurship.
What advice do you have for founders and entrepreneurs in SC to help scale their ideas?
The most common and critical mistake we observe in companies is not engaging with their customers enough. Whether it's talking to potential customers or existing ones, this interaction should be a daily practice. Your customers can offer invaluable insights into what your company is doing well and where it needs improvement.
This is arguably the top advice any investor would offer to most companies: actively communicate with your customers and potential customers. Building products or services without ensuring their alignment with customer needs is risky. You must verify that your offerings resonate with your target audience.
As for resources, the South Carolina Research Authority (SCRA) offers valuable mentorship through the Small Business Development Center (SBDC) and provides educational opportunities. Seek out experienced mentors and available resources, as there is a genuine desire to support startups in South Carolina. Take advantage of what they offer and see how it can benefit your company.