#54 – Jim Roberts, WALE and NEW

John Espey interviews Jim Roberts. Jim has been involved in and started numerous organizations throughout the Southeastern United States.  He currently runs an entrepreneurial network and an angel fund in Wilmington, NC.  In this episode Jim talks about starting eco-systems, the wild success Wilmington is currently having, early stage funding, and gives his thoughts on how NC cities can collaborate better.   He also talks about a lot of great resources for founders.

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Here are a few of Jim’s favorite Resources:
NC Tech Association
Dig South
And a newsletter

Articles about Wilmington’s tech/startup scene:

Jim hosts a wonderful podcast here and a local startup news feed here (Twitter for news feed).

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Full Transcript
Ep #54 Jim Roberts

Please Note: The Defiance Ventures podcast is designed for audio consumption. If you are able, we strongly encourage you to listen to the audio, which includes tonality and emphasis that’s not on the page. Transcripts are generated using speech recognition software and may contain errors. Please check the corresponding audio before quoting in print.


John Espey: Hello folks. I think you’ll enjoy this episode today. I wanted to give a little context on it just because we had a greatinterview, but it started off a little bit. Rocky. We just had some, some internet related challenges on a zoom call, part ofmodern day life and the COVID era. I suppose, as we had a couple of false starts, we tried to try our best to keeprecording and to splice it together as a result. I think the chemistry between Jim, my guests and may took a little longer toget started. So in the beginning, we’re, we’re not really on as much of the same page, but, but we figured it out prettyquickly. And trust me, keep listening because Jim dropped a lot of really, really good knowledge, especially for folksinterested in FinTech or interested in startup communities or early stage investing. He turned out to be one of my moreinteresting guests, for sure. So I hope you enjoy. I have started an exited multiple companies. I am an avid investor inearly stage companies. I advise some of the hottest startups and I’ve worked with many of the top tech companies acrossnumerous industries. I’m a software developer by trade, but I also have an MBA from Duke university. I seek outcompanies who defy conventional wisdom to drive innovation in any industry. And in this podcast, I interview thefounders of those companies for you.

Jim Roberts: Hello

John: Folks. And thanks for listening to the podcast. I’ve got a great guest today. Jim Roberts, the founder of whale orWilmington angels for local entrepreneurs, he’s been involved in many economic development and early stage innovationsupports group support groups, also angel investing, which is a real unique combination of, of things. I’m also veryinterested in hearing about the startup startup ecosystem and Wilmington. I live in the Charlotte ecosystem and we talk alot about it and I find it fascinating, but I’m hearing a whole, whole lot about Wilmington and there’ve been some major, major success stories over there that I hope we get a chance to talk about. Jim. Thank you so much for joining mevirtually today.

Jim: Oh, thank you very much. And thanks for the connection to my buddy Tucker Carlson. He and I are old drinking buddiesand one of my favorite people on earth. So thank you.

John: That’s awesome. Yeah, Todd, Todd’s been great. Todd is a one who helped me out with this podcast in terms of figuringout kind of the electronics. We, we built a studio together and he actually taught me a lot about just broadcasting ingeneral. He’s and he’s a really fun guy to go have a drink with as well. We usually sit bourbon during the show and Toddparticipates while he does the editing. Sorry.

Jim: So where was my live? My live invite. I’m a, I’m a bourbon

Jim: Drinker as well. So next time you’re in Charlotte. Sit in next time.

John: Next time you’re in Charlotte, you’ll have to, to, to, to visit the studio or I can bring a remote studio to you. I’m actuallygoing to be going to Wrightsville beach. Is that near Wilmington?

Jim: It’s all one real community actually. So it’s yeah. Wrightsville Carolina beach and Wilmington all very close together. Yeah.

John: Awesome. Awesome. Well, so, so first of all, can you tell the listeners what, what whale

Jim: Whale is? The Wilmington angels for local entrepreneurs were five years old were an angel network. We have invested amillion dollars and 14 deals and not all of them are exactly Wilmington, but usually Raleigh Durham, or we even haveone in Myrtle beach. And I’m just a very small group of angel investors that we are a network and not a fund. Andinteresting enough, another little tidbit is half of our entrepreneurs that we’ve invested in are veterans, military veterans. And the interesting part of that is that Wilmington has a high density of veterans. And what we find is they’re able to focusmore, you know, your average civilian is distracted by the tourism destination that is Wilmington and the, you know, th ththe purposeful distractions, if you will, but we find the veterans are able to focus and maybe they have their Sundays off. And that’s been a very, I would say a very big surprise, although I was also the person that brought bunker labs toWilmington. And so I had a, you know, an extra focus on meeting with veterans. That’s great.

John: Are you familiar with task force X capital? Yeah.

Jim: Here in Charlotte, I am, but I’ve never met with them. We’ve had a few LinkedIn exchanges, but I wasn’t the leader ofbunker labs, North Carolina, and he had a much different relationship with them. That’s I’m not a veteran. So I didn’t quitehave that rapport with the leaders of other veteran organizations, but Dean Bunchu and Nick, Brad fields were the twoveterans that dealt with them the most. Awesome.

John: Yeah. I love what Brandon’s doing there with task force acts, and I’ve been meaning to get him on to the podcast COVIDthrough wrench and a lot of plans in 2020, obviously. Right. But, but I really admire what they’re doing and I, and I agreewith you. I think that there’s so much talent locked up in, in, in our veteran community and, and they want to doproductive things. And I think they’ve got massive massively under-tapped skill sets that they can use for civilianpurposes as well. So I, I applaud what you’re doing there on, on the veteran front, for sure.

Jim: Yeah. Probably our best company in the portfolio is a company called measure IO, and they’re doing data for agriculturetechnology. So basically they have the sensors in the ground that measured nutrition and moisture in the soil, and cancommunicate that via IOT to any device that, you know, the owner of the farmer or the person who owns the, the golfcourse can really get a lot of instant data and, and use their staff accordingly. So it can help with labor costs.

John: Oh, that’s great. That’s great. And you mentioned that you’re an angel network as opposed to a fund. Do you want to speaka little bit to, to the listeners who may not be familiar with those two terms? I’m assuming that in a network it’s not a it’s, it’s, it’s more of a pledge type of arrangement or is it, is it something really,

Jim: It’s really up to the individual angel? So as we’ll get into, I run the entrepreneur support organization. So I find the dealsand I’m networking at every entrepreneur event on the site in the Southeast. And so I just kinda, I go to the pitch contests, or I run the events and I run the million cups events. And I find these entrepreneurs that are very early stage. And I, youknow, make them jump through a few hoops where they have to achieve the milestones, very simple milestones. And, andthen the ones that I like I put in front of our investors, they do a little bit more due diligence, but they all tend to act veryquickly. And where usually the first money into a lot of deals where we’re not necessarily the lead investor, because that’snot really how every angel round kind of works where more in the, as you’ve probably heard the friends, fools and familyrounds, you know, where I’m the full and the friend, and to be really clear with your audience, that I am not personally anangel investor.

Jim: Most of my work has been done in nonprofits and academic and, you know, economic development organization. So I, Ihave not really earned that investor tax bracket if you will, but, but I’m, I’m the guy who goes and finds the deal flow. Andour experienced investors do more of the due diligence and probably have one or two meetings. And then they, again, likeI said, we actually moved pretty quickly. We’re not that three month long interview process for a pre-revenue companythat really doesn’t make a lot of sense to me. Cause I, I feel the urgency of the entrepreneurs because I see them almostevery day in some capacity, and I know how much they need the fuel to grow. And a three month process just doesn’twork at that stage.

John: That’s, that’s really key. I think, I think a lot of people are, when you talk about angel networks or angel funds, even theyworry about the amount of time that they’re going to spend relative to the size of the check or the likelihood of getting thecheck that’s that you guys have done 14 investments. I mean, that shows that, that the process works and that you can, canget, get the team, you know, get the team put together to make the investment. Is that the, it seems to me that the real keypart of your job is not just to vet them the, and find the right opportunities, but then it’s to match them with the right groupof investors. Cause I imagine if you don’t pick the right group of investors, that it might turn into a three month process, right?

Jim: Yeah. It’s I, so we worked very fast. I, you know, again, I have a very small number of investors where barely an angelnetwork, if you want to think of it that way, you know, it’s still a few of my friends who, who have, you know, obviouslydone well in their career. But I think because of my network across North Carolina, because I have worked in every majormarket in North Carolina that I have contacts that I can say, Hey, we’ve now validated this startup. We’ve written thecheck. I think you should take a look at it too. And again, I’m not an MBA on just a hustler. I’m that guy that you see atevery networking event because I’m six, five, and I used to have red hair. So I really kind of stand out and everyone seesme at every event. If you remember Jeffrey Gitomer. I remember going to a bunch of his events in Charlotte where hesaid, if there’s a hundred butts there, your butt better be there too. And I followed that for 20 years. And so, you know, I’ma known commodity, whether you think I’m a pain in the ass or you like what I do, I’m always at these events. So yeah, we, we do our best to find additional investors for the early stage companies that we have, you know, invested our timeand money into.

John: Yeah. I think, I think that’s really important and being able to help with, with the following one money and how to kind ofmanage expectations with investors. I’d like to switch gears for just a second though, because you mentioned anotherorganization that you’re involved with. I gather that that’s new or new. Can you, can you tell the listeners with that?

Jim: Sure. In 2013, I was recruited from Raleigh to Wilmington by the chancellor of UNC Wilmington, as they were opening anew incubator at the university. And I worked there for a year and a half and really got some great results. We werenamed one of the top 100 incubators in the country and we were only 12 months old. Wow. So in April of 2015, I left theuniversity and started my own independent nonprofit called the network for entrepreneurs in Wilmington. And if you arefamiliar with the CED, which is the council for entrepreneurial development in the Raleigh Durham market, they at onetime where the world’s largest

Jim: Independent entrepreneurial support organization in the world. And so I just kind of, I’ve been copying their model for thelast 20 years with the things they do with events and connecting entrepreneurs to capital more importantly, preparingentrepreneurs to find capital kind of communications and, and mentoring. And so I just I’ve taken that model for the last20 years of in various organizations. And that’s how I got restarted in Wilmington. We take over a brewery in Wilmingtoncalled ironclad brewery, which is right downtown. And they just, they allow us to, to have our events there for freebecause they get to sell a lot of beer and that works for them. And we fill up their, you know, their events space and oncea month, usually on the third Thursday of every month. And we have fantastic speakers that I invite in usually fromRaleigh Durham, because if I invite them in on a Thursday, they’ll visit their beach house for the weekend. So of the over60 investors that I’ve brought to Wilmington over the last five years, I’ve gotten one no in five years from an investor whodidn’t want to come to the beach. And of course that sticks in my car a little bit about that one person, but, you know, wehave great events. We help the entrepreneurs meet the VIP’s that come in to speak. They learn from the agenda. It’s neverjust networking and we’re very proud of our events and the impact that they’ve had to make Wilmington a betterentrepreneur ecosystem. So

John: It sounds like you started new first. Did you, did you then create whale out of frustrations that you uncovered with new? Or did you just find some synergies or

Jim: There’s a reason that new is called new is because the good old boy network wasn’t helping the new entrepreneurs inWilmington. You know, I’ve never been a fan of the good old boy network because I’m not part of it. Of course, youknow, my, my family is not from North Carolina. As you can tell, I’ve got a little bit of a nasally Chicago accent. Okay. So the, the existing angel network who had been around for a long time was not, was not investing in the local deal flow. They were so heavily involved in kind of the national angel capital association that they were getting deal flow from allover the country and even Canada, and that’s not wrong, that’s their process. But I was there to build an ecosystem. I wasthere to build a local economy and that you have to find the fuel for your entrepreneurs and the field they need to grow. And obviously part of growing and scaling is hiring. And you can’t do that when there’s no available fuel to, to, to grow. And so that’s why I created whale. I created whale in November when the ecosystem organization started in may.

John: Great. So how, how did you get involved in the startup community scene? I know you mentioned that you had done itbefore in Raleigh. I think you have some ties to Charleston as well, but how’d, you really get started in, in building thesestartup communities?

Jim: Well, I was living in your fine city of the queen city of Charlotte, North Carolina. I was selling websites for a small webdesign firm. And I was like I said, I wasnetworking@everyeventaroundtownandnoneoftheseyoungstartupsthatwerethese.com companies keep in mind, this is1999 in 2000. And again, there wasn’t really, there, wasn’t a place where an entrepreneur could meet an investor, couldmeet the lawyer and accountant to meet the media, to tell the story and to meet mentors. There wasn’t an existing, therewasn’t an existing business organization that worked at the speed of technology entrepreneurs. And to keep in mind, thisis the time that Doug Lebda of lending tree is getting started. This is exactly when Michael Prager and avid exchange justgetting started in Charlotte, but there was no help for them at all. Like, you know, that was a time when, if you lived inCharlotte, people ask you what bank you work for.

Jim: It wasn’t really an option of what else you did. It was what bank and what church did you go to? So it wasn’t reallyworking at the speed of the entrepreneur. And so I had, I was trying to sell websites with people, young entrepreneurswho had no money to sign a contract for us to do their website. So that’s how I came up is I was desperately trying to dosales and sales of websites. And I knew that if I created a room where an entrepreneur met an investor that wrote a check, that they would have to come back to me and say, Hey Jen, thanks for that event. I met an investor. We want to do awebsite with your firm. How do we get started? And that happened a little bit, but frankly, the, the entrepreneur events gotmuch more attention and there was a hell of a lot more interest in putting on more and more of these events to the pointwhere we had to change restaurants four times, because we needed more and more space.

Jim: That’s great. And our events would sell out really within an hour of me putting out the email that, Hey, we’re having anevent on March 24th and within an hour, it’d be sold out. And so I just had to keep going to bigger and bigger events. Sothat’s really how I got into this space. My event in Charlotte in 2000, we started February of 2000 and my, myorganization was called first round, which meant you could come to our events and buy the first round of drinks or, andfind your first round of capital. And that’s really how I came up with the name.

John: Oh, that’s really cool. I also see from, from your LinkedIn profile that you spent some time with the NC depart with theNorth Carolina department of commerce, can you speak to how state and local governments interact with the startupcommunities, maybe even talking about how that has changed from when you first got started doing this to, to today?

Jim: Well, the challenge with that is that my role with the department of commerce was really in international trade. So how doyou help? How do you help North Carolina companies sell more overseas? So, you know, you have to achieve a certainamount of growth to even consider selling in Paris and London and China. So that was really my role at department ofcommerce. With that said, I still kept my foot in, you know, in the, in the ecosystem because I was trying to find thesecompanies that are very small stage.

John: Got it, got it. Now, w what is your experience been working with state and local governments now in, in, in Wilmington, in Raleigh and in Charleston, is there a big role for those groups to play? Obviously, the group you were with was focusedon a very different prize, but, but is there a role for these governments to play in and what do you think that is? And howdoes that evolve over time as the, as these ecosystems start to grow and build steam?

Jim: Well, I think the state could do a whole lot more and I’m very vocal and they know that I’m very vocal about the thingsthat I think they could do. The challenge that they have is they don’t, the States rarely don’t want to get involved in thepicking winners and losers. They don’t want to pick, invest in a company, invest time, invest resources, and then sixmonths later, you know, that that company has died. And that’s why they’re much more interested in, in the recruitment ofcompanies, you know, but I think what States should be doing, there’s an old statistic from the Kaufman foundation thatsays 70% of entrepreneurs that go through structured educational programming about being a better entrepreneur, have a70% chance of succeeding beyond three to five years. Wow. I think there’s a role for that because of course the opposite istrue.

Jim: If you don’t go through it, you know, 30% or 70% of companies fail without that kind of programming in the first three tofive years. And so why wouldn’t you do more of that kind of training, but I think one thing, there are two things, one thatthe state does, right? And this just happened in Wilmington for one of the first times ever is the matching of an SBI, ourgrant. So an SBR grant is when the federal government puts out a request, because one of their largest budgets, let’s put, you know, the military budget, they have a need for some kind of new technology that they want the private sector to dothe research and development of because the government’s not really good at that kind of thing. So put it out and say, we’re looking for this kind of technology to communicate to our soldiers in this kind of rugged environment of the desertor a swamp or whatever.

Jim: And so that’s what an SBI our grant is. And if you get one of these grants, it can be $250,000 in the first round, $1.2 million in the second round of funding. And then really the government becomes a client of yours and that budget’s kindof unlimited. And so since Wilmington has never really had kind of what are called deep tech or hard science startups, most of them have been in the Infotech or now FinTech, of course, Lee is the co the cluster of companies that starting togrow in Wilmington. We’ve never had these deep tech companies that needed these SPR grants. But so now the state hasthrough the department of commerce through my friend, Dr. John Hardin, who I used to work right next door to hasaccess to match the grants from the federal government. So we have a great company that I’m very proud of inWilmington called opiod.

Jim: And they got a $250,000 grant from NIH, the national Institute of health and the state of North Carolina, because all ofthat validation had already been done matched that grant was 75,000 more dollars. So instead of OPA going to find 14angel investors at $25,000 a piece, they have this SBR grant and the match for $350,000. That is non-dilutive. So it meansthat they don’t take any equity. These big SVIR grants don’t take a slice of your company. So the later investors love thatbecause the government has already covered the risk and expense of the R and D budget

John: And, and, and pairing up and doing a matching grant is great because that way you’re not as the state picking the winner, you’re, you’re letting it. You’re, you’re kind of outsourced and validated. Yeah, exactly. Yeah.

Jim: The other thing the state needs to do, and we used to have this before 2014, I believe is the date is the angel investor taxcredit w North Carolina used to have a 20%, 25% angel investor tax credit. That would, if you put a hundred thousanddollars into a company, a young company before let’s say $5 million of revenue, the angel investor could write off 25% ofthat investment on their state income tax. Now all of our States around us have copied that legislation, but in 2014 or2016, 2014, they got rid of that, that tax credit. So we are desperately as a state of innovators trying to get that tax creditback, but that’s obviously a legislative issue.

John: Yeah. And our, our state government here hasn’t shown the ability to, to always make the best decisions for the state.

Jim: The reasons for that is because obviously it doesn’t impact rural communities who aren’t, you know, very active in theinnovation economy yet. So if we have, you know, again, if we have what I want to say, there are 12 urban counties. Sothat makes 88 rural counties that really don’t benefit from something like an angel investor tax credit.

John: Wow. Very interesting. One, one other thing that, that I’ve seen working with doing some economic development, workmyself with the former Charlotte chamber of commerce and Charlotte regional partnership, it seems like we don’t do agood job connecting RTP, Charlotte Wilmington at other regional startup scenes. And, and I don’t think any of us has astartup scene that you could point to and say, wow, this has enough critical mass, but I think if you could pull everythingacross the state and you start thinking of it, maybe even add in Charleston and Columbia into that mix now, you’ve, itseems like you have a critical mass. What do you think we can do to better connect these different startups scenes? Is it agrassroots thing? Does it have to come from the state? Does it have to come from the bigger companies?

Jim: I really disagree. The Raleigh Durham has, has enough density and critical mass. I mean, it’s, it’s a top five. I mean, ju justa rating to rankings just this week or this, you know, in the last, I don’t know, two, two months, I would say, you know, that said that Raleigh is a top five performing economy in the country Wilmington. So in a recent study of ecosystemsdone by a company called startup genome of the emerging ecosystems after places like Silicon Valley Raleigh was rankednumber 10 ecosystem, emerging ecosystem, Charlotte was ranked the 31st ecosystem and Wilmington was tied for 91 inthe world. Yeah. And those you’re right.

John: I don’t mean to say that there is no ecosystem in these places, but I’m more thinking about when you compare it with aNew York or an Austin or Silicon Valley, which we, you know, we, I, I don’t think any of these cities as yet at, at, at thatpoint, but I do think if you put them all together, you combine the research universities, you combine the big businesses inCharlotte, you combine the, the, the information security industry and, and in Charleston, it starts to really compete withthose world-class cities on, in a real meaningful way. But obviously it’s more easily said than, than Don, but point takenthat a lot of great work has been done in each of these, each of these cities is, is certainly punching above their weight in away that probably was hard to imagine 20 years ago.

Jim: Well, I mean, again, CED was started 30 years ago by five service providers who wanted an organization to build theirfuture client base. So CED was started by lawyers and accountants who wanted to have an innovation economy wherethey could find these startups that are a very young age and kind of, you know, have that link up for life, you know, as aFred Hutchison of Hutchison Mason or now Hutch law. I mean, he’s given a million dollars over 30 years toentrepreneurial support organizations in the South. So he’s, you know, I think, I think you’re right that these ecosystemsdon’t work together, but they sure as hell try to work together. But, you know, I, the CED venture connect conference isthe South’s largest venture conference for entrepreneurs and investors, where they have 600 to a thousand people thatcome to this annual event.

Jim: There aren’t a lot of Charlotte companies that I see applying to that. Sure. They have every right. They’re certainlyeligible. No one’s telling them that they can’t apply, but does Charlotte really make an effort to connect to RaleighDurham where actually the resources are? So I have, I have that as one of my top priorities and I have a name for it. It’scalled the coastal corridor where I invite CED. I invite the North Carolina technology association. I invite NC idea. Iinvite them every time they have something that they want to promote. I invite them to come and speak for two minutes atmy event. And because they’re on stage at the end of the event, every entrepreneur in the room can go up and say, Hey, NC idea, how do I get one of those grants? What do I need to do? And what you find is, and I don’t think Charlotte takesadvantage of this.

Jim: Maybe this is important for your listeners is they have a geographic need to spread the resources they need. The North Carolina technology association needs members in Charlotte. The, the NC idea needs applications to come in from theCharlotte market CD as an independent nonprofit would love to have more Charlotte based members. And they’rewelcome to they have that as an opportunity, but I, you know, if I flip it the other way, I’m not sure Raleigh is spending awhole lot of time in Charlotte either, but as kind of the center of this innovation re you know, universe for North Carolina, you guys would benefit a lot if you spent some time, you know,

John: And, and in a prior life, I was involved in a company that was acquired by red hat, and I got to spend some time up there. And it really is amazing that when, when you think about, I mean, the biggest tech success story in the, in the history ofthe world, you know, red hat exiting to IBM for $34 billion fairly recently, and that’s a North Carolina based companyright down the street, and Carrie you’ve got SAS, which is a fantastic success story.

Jim: We’re really the largest privately owned software company. Yeah.

John: And, and you don’t, you don’t have those, I mean, we’ve got success stories. You mentioned lending tree, you mentionedavid exchange, but we don’t really have that, that tech pedigree to nearly in the way that the Raleigh does. And that’s whythe why I asked the question, why, why do we each try to think of ourselves as, as cities? And, you know, theseecosystems that, that, that don’t, I mean, they communicate, but it isn’t, it know if we could somehow brand it as this isNorth Carolina, or this is the Carolina’s welcome to the Carolinas. You’ve got Wilmington, you’ve got the, the, you know, Raleigh and all of the great schools there. You’ve got Charlotte and it’s big banks who are big consumers of technology. You’ve got a lot of really great stuff going on in Charleston. It’s just, it’s baffling. But I think like most things it’s easier tosay than to do. And I’m sure there’s some incentive systems at the city and state levels that, that make it harder to kind ofpull those resources together. It just seems like when you, when you take all of those cities and combine them into one, kind of like they’ve done with the Panthers, branding it as Carolina, not North or South Carolina, but it’s, it’s the Panthers. It just seems like there’s the, we, we, we, we could really be a world-class force to be reckoned with.

Jim: I really don’t. I don’t see how North and South Carolina would, would participate like that as a region where, you know, we’re, we’re all proud of the data that we have accomplished. I mean, the Wilmington ecosystem is really only seven yearsold. Most people in Wilmington, I’m a little biased consider the opening of the UNC w incubator as the start of theecosystem, because, you know, in CNO had only started a year before and right in 2013 is when next class and untappedreally got started. So our ecosystem is very young and did not feel welcome. You know, we Wilmington before I got therereally claimed that they were very isolated two and a half hours East of anything, you know, Charlotte really doesn’t cometo Wilmington. You guys tend to go to Charleston and Myrtle beach for your beach vacations. So we really don’t feelconnected to Charlotte.

Jim: And again, it’s that coastal corridor that I really pushed to invite those investors who really wanted to visit the beach. Justno one had really invited them before for a business purpose, where again, I have my events on a Thursday night and theystay in Wilmington till Sunday. And frankly, between you and I, John, I, I pray for rain because they won’t have anythingto do, except for, Hey, I met an entrepreneur. Why don’t I take that entrepreneur to lunch and, you know, have a beer onSaturday. And, and that happens all the time. Now

John: That that’s great. It’s interesting that you talk about that kind of feeling isolated from Charlotte. I’ve had a few, a fewpeople on from Charlotte who have different events, whether it be our pitch breakfast event, which is a fantastic event thatNC idea actually shows up to, I think, once a quarter and, and it’s very well attended. It’s very, very popular. I’ve, I’vetalked to our angel fund here, Greg Brown, the, the current guy that’s running our angel fund here in town. And both ofthem decided that they had to create a chapter for Davidson. Now, Davidson is 30 miles away from Charlotte, maybe, maybe even 25. And what they’re finding is that it’s really two distinct crowds and you have, they just have to have eventsin both locations back when you had events and locations rather than virtual. But so I can see if Davidson and Charlottehave isolated themselves from one another. I can only imagine how it goes with Bloomington. It’s interesting that you domention the beach thing, because it is, it is, I feel like very much Charleston and Myrtle, and even Savannah to someextent are probably more Charlotte beaches than, than Wilmington is it’s, it’s a fascinating dynamic that, that bleedsthrough in, into something like what, you know, what we’re talking about with the, these startup ecosystems.

Jim: Hey, I, you know, I’m buddies with people like Keith Lindemann, Mac Lackey, Brandon Nutley. Those, my mentor is aMike McGuire who used to run the grant Thornton office. There he’s been my mentor for 20 years from the time I startedmy organization in Charlotte. So all of those guys have been to Wilmington. I make it very clear. Our events are as longas you’re willing to hustle enough to get to the beach, which how hard could that, should that be? You know, come ondown where, where our doors are wide, open hell I’ll even buy you a beer. If you come from Charlotte, I’ll pay for yourgas. I mean, I just, I’m just trying to introduce our entrepreneurs to as many people as possible, open as many doors as Ican. In fact, you know, you mentioned Greg Brown, Greg Brown, and I are on the same call with the Raleigh-Durhamangel investor leaders every month where we discuss every deal that we’re looking at.

Jim: So we can get other angels involved in our deal flow. And so there’s 25 of us. Sometimes it doesn’t sometimes 20, 25people on this call on a monthly basis. And we go one by one group and say, Hey, I’m looking at these five companies. Does anyone know anything about this industry? Do you know these entrepreneurs, do you know investors in yournetwork that would be interested in a startup in this industry? And we share a lot of information down to the personalitiesof the entrepreneurs. So we don’t waste anybody’s time to say, Hey, we looked at this company three months ago and theDino, the entrepreneur has no follow through. And, you know, didn’t show up and stood us up for a couple conferencecalls and we would not suggest doing business with them. Those are the kinds of things that we talk about.

John: That’s great. That’s great that that’s happening at a kind of a grassroots level. Cause that’s usual, that that gives me hopefor the future of collaboration between the cities that it’s at least happening at a, at a grassroots level. But to your point, ifyou, if there aren’t butts in the seats, people making the effort to come to the events and Wilmington to go to the events inRaleigh to go to the events in Charlotte, it’s, it’s, it’s going to be hard. So I’d like to shift gears a little bit and talk aboutwithin the, within the angel network, what type of companies are you looking for?

Jim: Yeah, all of our companies are very young. There’s not a vertical industry because Wilmington doesn’t have a verticalindustry. We have, we have a company called brilliant soul that has a sensor that goes into the sole of your shoe, andbasically helps you with balance factors for it used to be for gaming, but in health and VR, but now it’s for healthcare. Socan this sensor really prevent people from having a fall when they’re older and breaking a hip? We talked about measureIO already, a company called permits.com in, in Myrtle beach. So even though Wilmington is now forming a FinTechcluster, we don’t really have a FinTech company in our portfolio because those are normally really well-funded companiesspinning out of live Oak that really don’t need angel capital.

John: I’d like to come back to live Oak for sure that I find that whole group. But you, it sounds like you do pre-revenue type ofinvesting. Is that true that I hear you mention that or,

Jim: Well, our investors of course, would love for the companies to be post revenue and have a few clients, but you know, there, we, so Wilmington has a lot of people that end up in Wilmington. You know, you guys can attract an MBA fromsome great university and they want to work at, you know, bank of America for a couple years and then spin out and dotheir own thing. We don’t get those people. We may now with live Oak and Encino, but before 2013, we just kinda gotpeople that wanted to live at the beach and they, their career was kind of second, a second thought, you know, it was thatquality of place that attracted them to Wilmington. So we don’t have those kinds of people. So normally, you know, it’s, it’s a person who’s moved from somewhere else, looked for three months for a job.

Jim: Couldn’t find a job. And now they start a company around something they knew from wherever they move from, fromBoston or New York. And they want to start a company around their experience. And so they’re kind of out of money. Sowe have to kind of fill that, obviously that financial need of helping them for enough fuel, just to survive, to get to, youknow, a place where they have a product and, and revenue. And again, we obviously we’d prefer to take some of that riskout, but that’s just the deal flow that we have. That’s the cost

John: Of building. Yeah. Building some angel and venture capital

Jim: Where there’s never been an ecosystem before, where now you could spend four or five years at Encino, learn from thatmanagement, maybe learn some gaps in the industry that you as an entrepreneur could maybe start. And that’s what we’rehoping to see now that there’s been an exit from Encino. There’s been an exit from untapped or next class, depending onhow you call it. And, and another company called player space. And now we’re hoping the employees of those companiesnow get the itch and the bug to become entrepreneurs.

John: Yeah. I definitely want to revisit that, that theme because I think that’s a really, really interesting theme. And I think you’regoing to have some really interesting opinions on that before we shift to that, though, how you, you mentioned that youlike to help your portfolio companies with further on down the road, capital raises, you mentioned mentoring through, through knew how involved in your portfolio companies do you like to be? Do you go any more deeply than helping themraise capital and helping them match up with the right mentors?

Jim: I think if you contacted any of the companies in our portfolio, I over communicate to them about the things that they need. So I, I’m a terrible sleeper. John, I wake up at 4:00 AM in the morning and I got nothing to do between 4:00 AM and 7:00 AM when everyone else wakes up and maybe watches TV and makes a cup of coffee, I got three hours. So I’m readingevery website, news website, everything I can find Twitter, LinkedIn, and I’m looking for articles that I can send to myportfolio companies to make their day better. Here’s an article today in Bloomberg about, Hey, did you know that COVIDhas actually made the opioid crisis worse? The, the, the anxiety that makes them take these drugs has been grown by thepandemic where we’re all, you know, we’re all a little cabin fever. And so the drug use of opioids has gone up, well, Ifound this article. I sent it to my port. You know, the company that’s in the ecosystem. Unfortunately we’re not an investoryet pushing for that, obviously. But that one article from Bloomberg that has the ultimate headline, they can now use thatin every sales pitch and every investor pitch as their opening slide and say, here it is in black and white in a publicationthat you trust called Bloomberg, and let’s go, let’s go make the solution to the pain point in America.

John: That’s great. What a great, what a great problem to tackle. I mean, it’s, it’s sad that we, that we have this problem, butkudos to that group for going after it. You want to solve the big problems.

Jim: One city in America for opioid abuse, with 11% of working age people with an addiction. Wow.

John: Wow. Is there any hypothesis as to why that is or,

Jim: Well, again, we’re a place that people end up. Okay. I mean, we’ve got, you know, people that have been pushed out oftheir house, you know, and they’re given a little money to, you know, go to a place that’s warm and we may be the closestwarm place. You know, everyone wants to live at the beach. We have, unfortunately of course, some veterans that we’vealready talked about that may have some, some leftover issues from surgeries or wounds or whatever, and they getaddicted. Those are, those are the kinds of problems that we’re dealing with.

John: Wow. Wow. So you mentioned that you liked to over-communicate and I think over communication is, is almost alwaysthe right answer in any human interactions, personally. What are things that you see founders get wrong when theycommunicate with their early stage investors?

Jim: Well, I, I think I see this every day of, you know, someone is just, they’re so eager to go get that call without thepreparation of looking to the, you know, the background and the portfolio of what that fund has invested in. So we had arecent, I’ll give you an example. We had a deal go in Wilmington, $2.9 million from Jurassic capital. And there was astartup who has no revenue and, and Jurassic capital is more of a early, if it makes sense at all, an early private equityfund, they’re not angels, they’re not a venture fund. They’re kind of an early private equity deal. And so a company wasgetting some mentor advice that, Hey, you should go after drastic capital too. They obviously like Wilmington. Well, thathas nothing to do with what that fund is looking for. And so you can make that mistake as an entrepreneur of trying topresent to them too early without having an established relationship.

Jim: You know, we always talk about, as an entrepreneur, you need to meet the investors before you need their money. Youneed to develop a rapport. It can’t be, you know, I, it’s not going to happen on the first date kind of relationship. And, youknow, you have to, you have to know the investors, you have to know what they’ve invested in. You have to talk to theirportfolio clients. What are the startups think, you know, after they got the check, what was that relationship like? Theyjust got to spend a lot more time developing the rapport, just like in any sales pitch.

John: That’s that’s great advice. I think I heard a story that I’m sure it wasn’t true, but somebody asked Abe Lincoln or George Washington, what they would do if they had seven, seven days to chop down a tree that was very large. And they said, they’d spend six days sharpening the blade. I’m sure neither of them said it, but it’s certainly, certainly is instructive to, todo your homework. Don’t focus as much on the thing, focus on the prep work that goes into it. Cause that that’s the partthat drives a success. I think that’s, that’s, that’s great advice.

Jim: So I would also say that, just know that you are probably not going to be able to raise the whole round that you need inyour town. You have to, you have to get in your car in non pandemic days, shake some hands and bumps, bumps, gym. Yeah. I mean, you gotta, you gotta nothing replaces that are to, I, you know, look of confidence, you know, and, and, andthat is going to return very soon. Hopefully after the vaccines are fully engaged, but you have to know that you’reprobably not going to be able to raise the whole round that you need and future rounds in your backyard. You’re going tohave to go to events in Greensboro and Asheville and Charleston there, they have a great event called dig South, look upthe angel capital association, right on their website. They list every single member, right on their website of, you know, Hey, a hundred angel groups in the Southeast. You know, they’re not just in Raleigh and Charlotte.

John: Wow. That’s, that’s great advice as well. And how do you feel about mixing and matching friends and family or individualangel investors with the network? Is that something that you guys like to see other angel, not just other angel networks orfunds, but individuals investing, or is that something that you shy away from or what

Jim: This is too hard to get picky, man, he gotta take, take that check when you can and find every, you know, finding, findinginvestors who have a taste for risk in North Carolina is hard enough. Obviously you have to make sure that there’s goingto be a good relationship, but I, I don’t, I don’t advise turning away a whole lot. You know, you always want smart money. Of course you don’t. You know, I, I have a million stories of that pretend angel investor that sweats every night, whetherthey’re going to lose their money and they wake up at 2:00 AM and they call the entrepreneur, Hey, what did you dotoday to get my money back? You don’t want those people. You have to have people who, you know, have a taste for risk. You know, we all call it the Vegas money that if they lost $25,000 in your startup, that’s not going to cause a divorce intheir family. You know, you also have to be able to look your aunt in the eye at Thanksgiving, you know? And so youhave to be very careful with those relationships, but you know, you have to, you have your friends and family are going tocome first. The fools are going to follow them, and then you’re going to find more sophisticated angels.

John: I like that advice as well. For sure. Take, take the money when you can get it as long as it isn’t money. That’s tooexpensive. Yeah. Yeah. Very, very cool

Jim: NC idea. You know, you can validate your idea and that’s one of the things that I think I’ve brought to Wilmington is allthese validation points of getting a little media coverage, winning a pitch contest, winning a, you know, best softwarecompany in North Carolina when Pendo, and you know, SAS and measure IO and, and all these companies that peoplehave heard of. And yet you’re the winner. I mean, this, that happened to next class that ha that helped next class. It helpedEncino when there’s 800 people at the North Carolina technology association. And here’s a software company fromWilmington in the FinTech industry that no one’s really heard of yet, they were chosen as best software company in thestate that opened some eyes when you’re Raleigh centric. And you think Raleigh is the center of the universe, but aWilmington FinTech software company wins an award in front of 800 people. That’s one of the biggest awards of thenight that has an impact.

John: Oh, absolutely. Absolutely. We, I mentioned that, that we had a company that was acquired by red hat and we, we, wewere a small firm about 135 people at the time that we sold, but we had really, we were able to get some recognition. Wereally out kicked our coverage. I mean, we, we had a hype cycle that we were ranked as the leader in that hype cyclereport. I believe who is it that puts out the magic quadrants Gardner, I think had us as a leader in their magic quadrant forlegacy modernization. And, and then we got an Ernst and young entrepreneur of the year award for, for our CEO andthose things just get you some recognition in ways that are really hard to quantify. They take a lot of work. There’s a lotthat goes into getting those. They aren’t necessarily easy things to get, but they certainly do validate for, you know, for if, if you want to be acquired by a red hat or get on the radar of a company like that, the more those accolades certainly aren’tgoing to hurt.

Jim: Well, it helps when I’m on the committee, right. It helps when I’m the vote in the room and I can fight for a Wilmingtoncompany, you know, with all disclosure, of course, to say, Hey, you know, this is in my ecosystem or, Hey, I’m a mentor, but you don’t have to vote for them, but you can say, I can excuse myself from this vote, but this is what this company hasachieved. And I’m, I’m on all of those committees on purpose. I mean, that is why I participate in all these organizations. I’m on the North Carolina technology association awards event. I’m on the CD committee that chooses the companies thatgo on stage. I’m on, I’m in the room when at NC idea, I’m a, I’m a finalist judge, you know, that kind of votes at the end ofthe day of the 125 companies that apply who are the five winners I’m in those rooms. And I fight for my companies andeveryone knows that that’s not a secret, but it’s something that it’s not so obvious when you’re starting an ecosystem. Sure.

John: Well, I’d like to shift gears to the startup scene in Wilmington. We’ve, we’ve already talked a lot about it, I guess, first canyou, it’s interesting to me, because in your case, or in the, in the case of Wilmington, you know, you’ve got the, anincubator or an angel fund popping up right around the same time that you have a wild success story in live Oak andEncino. And so I’m curious though, how, and you mentioned that that was maybe seven years ago, that, that those two, two sides of your ecosystem kind of came into existence and maybe co-evolved, how has the scene change through thoseseven years? I just to set the stage, Dan Roselli here in Charlotte, likes to talk about when he, when he first came toCharlotte, if you told someone you were an entrepreneur, they were like, Oh, you’re in between jobs at the banks. Right, right,

Jim: Right.

John: But can you maybe talk about how it’s evolved over seven years? Cause it sounds like it’s, it’s been, it’s, it’s evolvedlightening, lightening fast there.

Jim: So, you know, there wasn’t a model or it wasn’t a poster child to put up on the wall and say, if you’re an entrepreneurial orlook at this company and follow what they’re doing there, wasn’t that kind of company in 2013, you know, live Oak bankat the end of the day is the bank. They’re a strange, unique, not strange. They’re a unique bank that they don’t have anybranches. You know, everything they do is online. And so within the bank, and they’re a very large bank, they’re thenumber one SBA loaning bank in America. But in their process, they found a unique problem that they created with apiece of software that became known as Encino. And then in just last year in July, I believe and seen who had the largestone day increase first day increase of an IPO in the last 20 years since the.com bust.

Jim: And so, you know, with that kind of success, then you start hearing, of course, everyone’s asking him to give a speecharound town and the entrepreneurs, little by little start picking up the terms and they start understanding why things aredone the way they are. And the people at live Oak and Encino are very classy people. They are, you know, they doeverything, right? They say the right things. They’re, they’re, they’re more corporate, but with kind of a, well, what theysay is in you’ll love this, they say they hustle and comfort. That is their internal kind of, you know, way that they talkabout how they work. They work very hard, but they believe that, you know, you know, balance of life as well. And ifyou ever come to Wilmington, you really must see the headquarters of live Oak bank, because you will think you are inSilicon Valley. It is the most beautiful offices in all of North Carolina. And they are live Oak trees that they made these, these buildings out of. And they are just stunning and they have their own cafeteria, very upscale. Everything is top-notchthe, the, the best place to work all around town and in the region. Yeah.

John: It’s interesting that coming out of some Roundup, sorry, I was going to say it’s interesting. It was always interesting to mewhen I met and CNO, I met them. They had already raised money from Salesforce and SunTrust and learned aboutcoming out of live Oak live Oak bank. And they wanted to build all their loan origination software on Salesforce. And it, it, it’s, it’s interesting to think that something is unsexy as a bank can spawn a very cutting edge technology company, which now you’d be hard pressed to find a bank doesn’t know about Encino. And isn’t thinking about it. And they’recapturing a big trend, which is all of these mega companies moving to the cloud, which at the time they were doing this, nobody was thinking about that. It could only come from within a bank that has some visionary leadership, because it isn’tgoing to start at a bank of America or JP Morgan. It’s going to start somewhere like that. So it’s, it’s really fascinating. Butone part that, you know, we haven’t talked as much about, but my understanding is that that same group of, of businesspeople started canopy to go invest in FinTech. Do I have that correct? Or is the,

Jim: You have it? Where are the very proud owners of the largest venture capital fund in the South down there at the beach? How about that? S a $545 million plus venture fund for FinTech, which makes it the largest fund in the South. There maybe a biotech fund that’s larger, but that’s not what we’re talking about. So this is for a technology FinTech software venturefund, and it’s right there at the beach. And I know that every city in America is going, what the hell just happened? Howdid that fund get started? And it’s because they have the validation of Encino that they know the pain points of thebanking industry. And they went to 25, maybe 35 different banks and got them to contribute towards this venture fund. With the understanding that if they invested, they had to use the software that was in the portfolio.

Jim: So you just can’t invest in, keep a hands off. If you’re going to invest, then you’re going to use what we’re investing inwithin your bank that invested in canopy. And so that, that is how they started this massive venture fund that now theworld is coming, flying into Wilmington, to be fair, they have offices all over the country, including in California. So theValley is kind of covered, but you know, a place most of these guys have never heard of in Wilmington, North Carolina. Where’s that, is that near Charlotte? Is that near Raleigh? No, we’re actually two and a half hours away from all of that. We’re, you know, right there on the Atlantic ocean. Right.

John: That’s great. And, and I wanna, I want to talk about that, that like the connection between live Oak and CNO canopy andthat, that when you couple that with an ecosystem that pairs up with mentors now, now all of a sudden you’ve got, you’vegot the recipe, you’ve got the, you’ve got the capital, you’ve got a big client in live Oak. You’ve got a big success story inEncino. I love the concept of the trillion dollar startup. Are you familiar with the trillion dollar

Jim: Startup or I’ve not heard of that, but are you here to learn, sir?

John: So it’s, I hope I get this right. I I’ve, I’ve looked it up a couple of times and I think I’ve got it mostly. Right. But sosemiconductor, if you draw a line showing the lineage to pretty much any of the modern VCs in Silicon Valley or any ofthe big startups, and we’re talking multiple generations, Apple, Facebook, Uber, you know, I mean, but they all reallydraw lines back to Fairchild semiconductor. And at one point a book was written called the, the trillion dollar startup, or atleast the term was coined because if you drew that lineage and added up the market cap of everything that came out ofFairchild semiconductor, it, it add, it was a trillion dollars of, of market cap. I saw this on a smaller scale growing up in, inth in the DC area. So AOL was a huge success story, massive spawned, tons of talent, startups, investors, I thinkrevolution capital I, that, that Steve case his money started from Steve case as money, even something similar happenedwith capital one.

John: Now you’ve got QED investors that came, that came out of Nigel, Nigel Morris, one of the founders of cap one. And theytook all, they had all sorts of talent from cap one. And, and I think it’s this idea that, that these, these companies andstartups success stories, it isn’t just about what they do for themselves. It’s three or four generations down the road, whichit sounds like you guys are starting to, to reap the benefits of, can you just maybe speak to the chicken and egg actbetween investors community and then successful startups and exits? Cause it seems like they’re all super interconnected.

Jim: Yeah. So there’s actually a film on that with Fairchild semiconductor. I believe it’s called the real revolutionaries. And Iactually have a copy of that film on DVD. And I was arranging for the makers of that documentary to come to North Carolina when I hosted a nanotech conference in Greensboro. But back to your question is, you know, you, you can, youhave investors before you have an ecosystem. And, and I think where we are now is we’re trying to build the FOMO. We’re trying to find the investors in Wilmington who missed out on Encino, who missed out on untapped, even though I’mnot sure how you can do that. Cause I, I was everywhere within, with untapped. The next class, I, I worked very hard ontheir behalf in every promotional way. I tried to get investors. I did get investors interested and now that player space hashad an exit as well.

Jim: We are trying to work on that FOMO of, Hey, you missed out on those deals, but now we have three more deals that wethink are equal or, you know, on the same as the ones that you missed. So that’s what I’m doing now. And that’s what I’vebeen doing for the last two years. Cause at a certain point, a company like Encino doesn’t need the ecosystem as much. And you may do a few things around, you know, connecting them to some media relations. But at some point, you know, they’ve got people on staff that do what you can help them with. So you move on to the kind of the next generation ofcompanies, because we all knew that Encino was going to have an exit and we knew they were going to have an IPO, butwe also knew that there were an awful lot of people who wish they had gotten in on Encino. And so that’s what we’redoing now is we’re building the ecosystem to build the next generation of startups and hoping that that FOMO is strongenough that they’ll get much more involved in the next set of companies that need capital. Does that kind of address

John: That, that, that does. You know, and, and I think it is a balancing act because it’s much easier when you have the successstories. It is hard because you look at it and see, and I mean, you, you could argue the same thing for Charlotte. As youmentioned before, Michael Prager didn’t have an avid exchange, didn’t have an, that, that, that, on that ecosystem tosupport them. But it was such an exceptional group of people that they kind of powered through. And, and so it, it justbecause one of your top success stories didn’t need the ecosystem doesn’t mean that it shouldn’t be there, right? You, you, you kind of want to have both because we can’t all be Michael Prager’s. Right, right.

Jim: But Michael Prager can contribute to the ecosystem. He can take what he’s learned from a meeting with Brad Feld, comeback to Charlotte and say, I learned these three things when I was in Boulder, Colorado pitching my company to BradFeld and the Foundry group and Techstars. And that, those, those three things that he learned could mean different thingsto different entrepreneurs at different stages, but you have to share the knowledge. And that’s, that’s what we have beenworking on for the last seven years is how do we take all this retired talent in Wilmington? That’s been moving there sinceI 40 expanded in 1990. And how do you get them to share contacts, experiences, lessons learned, maybe some scars, maybe some capital with the entrepreneurs that are just getting started and that’s the essence of an ecosystem.

John: Absolutely. So, so do you, in, in, in the case with Wilmington, cause, cause in Charlotte, I w I think that we started, Imean, we did have you mentioned lending tree. I think there was an exit with DC 74, there was an exit with peak 10. There were a small number of, of success stories, but not that mega avid exchange type or Encino type of success story. And, and, and so I, but I think if you look at some of the efforts with venture prize and some of the early efforts that youwere talking about, and now with what Dan Roselli and Packard place in queen city, QC, FinTech have been doing and, and, and a handful of others, it feels like they’re starting to come together, even if they didn’t start from the same place, even if the success stories didn’t start in, in those incubators. Is, is it, is it similar in Wilmington or because you started soearly on with Encino, or are they a little bit more closely tied to one another in a sense, or is it, is it just random that theyhappen to start at the same time or around the same time?

Jim: Well, what really happened was that the leader of the entrepreneur network who was working at the university actuallytook a job at Encino. And that’s what created the job opening for me and the opening for the ex the chancellor to start theincubator building. So I wouldn’t say that, you know, Encino really, again, had such experience management, that theywere really weren’t that active in using the ecosystem other than I would nominate them for an award or a reporter wouldreach out to me and say, Hey, what is this company and CNO? And I would put them in touch with the leaders that Iknew, you know, in two days later, there’s a great article on the front page of WRL, WRL tech wire, or hippopotamus outof, out of Atlanta. Or I had connections in Nashville and Charleston and new Orleans that if I send them a press release, they’re looking for content. And, and I think that’s something that Charlotte could probably do a little bit better is, youknow, working on behalf of the entrepreneurs and the startups and getting some external media coverage to build somebuzz for Charlotte and the ecosystem.

John: Well, even, even buying from, from the, you know, have the city buy the services that are developed here. Right. We, Idon’t know if you heard about, if you’ve heard much about passport, they’re probably a second generation success story. Everybody’s heard of red ventures and avid exchange, but, but passport’s a really, really big success story here and earlyin the going, they went and pitched their solution to Charlotte and didn’t even get shortlisted for a parking solution. Andthe answer from the city government at the time was that they weren’t, they weren’t yet at a scale where they couldsupport a city, the size of Charlotte and not one month later, they went a deal for city of Chicago. And it’s just kind of ahead-scratcher we’re, we’re, we’re, we’re good enough for, for Charlotte or for, for Chicago, but not for Charlotte,

Jim: But that’s that, that’s the DNA of Charlotte, right? Where it’s not a re you know, where it’s not a venture, a community, it’sa, you know, a alone community, you know, it’s not the risk taking is very measured, and that is what entrepreneurship isall about. And if your DNA is in banking and, you know, I’ll apologize in advance, but if banking in the church are yourtwo priorities of your city entrepreneurship really isn’t in the mix. Is that fair?

John: That is fair. And to be fair to Charlotte, they, when they did look for a, a, a, a payment solution for the blue, the blue lightrail line, my understanding is that they went straight to passport. But obviously at that point, there was not a lot of risksbecause passport had become one of the biggest players in the space. Right.

Jim: Right. Yeah. I mean, there’s, there’s a lot of wealth in Charlotte that could be put to work. If, you know, you took, youknow, the diversifying your portfolio to five, to 10% of, you know, some of these really wealthy people who are living inCharlotte, you know, that, you know, it’s a real challenge to find angel investors. They don’t just put up their hand in themiddle of a, you know, of a football game and say, Hey, I’m on the big screen. I’m an angel investor come and find me, you know, we, I think there’s just an awful lot of wealth in Charlotte that if he could find a way to approach them and, anddefine, you know, the portfolio diversity, and, you know, at some point, this is an emotional game that my lead investor inWilmington is the owner of the brewery. And he’s got a son in college and he’s thinking, where’s my son going to work?

Jim: Is he going to be able to live in Wilmington? Probably not when we got started, but could he find a job now that he’sgraduating with an MBA? And he came back and we had some connections at Encino or the new spinout under live Oak, it’s called aperture. That just raised $30 million this year. Yeah. Could he go work for our next glass, even though they’dbeen acquired by a private equity firm, they still have an office they’re still growing. They’re still investing. Yeah. Youcould go work for that. So that’s why he became an angel investor. It was just as much about the emotion of finding jobs, creating jobs, being a good corporate community citizen. And Hey, one of these is going to hit big and I’m going to getmy, you know, my money out of it and hopefully make a profit, but you, you have to find those people. And that again isas much an emotional pitch. And it is it that it is a financial risk proposition.

John: Well, not nothing motivates people like legacy and, and what are my, how are my kids going to have a better life than Ihad. Right. I think that that’s a really good, a really good message for angel investing in, in, in cities that don’t have a longhistory of entrepreneurship, a long history of venture capital, a long history of, of early stage investing is, is to really thinkabout those future generations.

Jim: For sure. You know, it is it’s about kids and grandkids, you know, do you want your children when they become adults? Do you want them to live by nearby? So when you have your first grandchild that they also live nearby, or you’re going tohave to go visit them in Boston or New York or Silicon Valley or Chicago, why not help build part of the economy right? Where you live and they can grow their family right next to you where you already live, which is, you know, Wilmingtonand quality of place where people want to live by the ocean. Why can’t you have a great economy and a great quality ofplace. And that’s what I talk about with Austin, Texas. The only place that gets me out of North Carolina to live is that Iwant to live for less than 20 years. I wanted to live in Austin.

Jim: Why? Because it’s live, work, play every night. There’s a hundred places for live music, and I’m a little old for live musicnow, but there’s college basketball, college football. There’s great weather when it’s not 125 degrees, but I mean, it’s gotlive, work play. And I think cities, if they focused on that, you know, what I do is not rocket science. I’m, I’m not, youknow, again, I’m not an MBA. I just have, I bring a blue collar work ethic to a white collar industry. And I push things. Ipush the barriers out of the way for the entrepreneurs. I clear the way I make it a little bit easier to find the things that theyneed. And that’s really what I do every day as an ecosystem leader. What will that do?

John: Awesome. And that’s a great, great note to end on. I think we covered everything that I was hoping to get out of this. Thank you so much for, for joining me today, Jim, and I’m going to, I’m going to go back and, and, and, and listen to afew of the resources that you mentioned. If you’d shoot me an email with a couple of the, a couple of the resources thatyou’ve talked about, I’d love to put them in the show notes so that people can, can, can check those out and read moreabout everything that we’ve talked about. You, you were kind enough to share a handful of links about the ecosystem withme prior to our, to our interview. And I’ll also post those to the show notes as well.

Jim: Okay. Sounds good. Awesome.

John: Well, thanks so much, Jim really appreciate having you and, and best of luck.