A pair of Raleigh entrepreneurs with exits and angel investments under their belts have partnered up to launch a fund they hope will be disruptive to venture capital.
They're calling it Full Tilt,
and that's already their posture. Since finalizing plans for the fund August 1, they've got seven term sheets out and a $100,000 commitment to Trakex, the brainchild of a pair of NC State University students. They hope to close the $10 million fund in September.
The men behind the VC startup are Anthony Pompliano
, who sold a pair of local startups
and then moved to California to work for Facebook in 2013, and Jason Williams
, who founded FastMed Urgent Care, built it to nearly 90 facilities in three states and then sold it last year to a private equity firm.
They're representing a growing trend in the venture capital industry—after successful exits, more entrepreneurs and operators are starting their own funds. The best example of that locally is David Gardner, a seven-time entrepreneur who launched the $12 million Cofounders Capital Fund last year, but nationally, top performing funds like Andreessen Horowitz and Peter Thiel's Founders Fund are case studies.
A mutual acquaintance connected Pompliano and Williams several months ago, when the former moved back to Raleigh after leaving his executive "growth lead" post
at Snapchat in Los Angeles. Over two years in California, Pompliano had amassed a long list of connections on both coasts, and was an active mentor to startups that had raised millions in venture capital and launched top-performing apps in the App Store.
Williams meanwhile has been an active investor both locally and internationally. Through an advisory role in the Innovations in Healthcare department at Duke University's School of Medicine, he's invested in healthcare companies in Hong Kong, Kenya and locally. He's also an investor in Fortnight Brewing in Cary, Undercover Colors, JuiceVibes smoothie company in Clayton and Pierro's Italian Bistro in Fayetteville, all while serving as CEO of a tire recycling startup called PRTI.
The two men bonded over similar experiences during their entrepreneurial journeys. Both built businesses without the early stage money that typically comes from "friends and family". And they realized many entrepreneurs lack that kind of access to capital too—and even if they do raise money from those close connections, it's often "inexperienced uneducated money," Pompliano says.
Compounding the problem, most investors won't be the first to bet on a company. At least not without sales, profits or a track record of success. It's created a sort of club mentality, Pompliano says, where only those in the club get funded.
Pompliano and Williams are out to quash that "elitist approach" to investing and to democratize the practice. Over the next 12-18 months, they'll write 100 $100,000 checks and those dollars will go to first-time founders or entrepreneurs with only a concept or prototype, the founders that "don't have anyone to help them, no professional money or smart people around the table," Pompliano says.
The investors will serve as mentors, advisors and confidants, and will help their portfolio companies crowdfund on AngelList or the local site Malartu, or connect with investors for subsequent rounds.
Full Tilt also operates with founder-friendly terms. Though the men ask for the same shares as a founder holds, there are no special rights or warrants, no ratchets or board seats or preferred shares. Both men intend to find ways to invest in subsequent rounds of each company too.
It's a "1,000-year journey where we do what's right by the founders, LPs, etc." Pompliano says. Unlike some of the investors he's met during his time in larger tech markets, "we authentically care about people and want to see them be successful," he says.
But it'll be a bit more targeted toward Pompliano and Williams' areas of expertise—healthcare, software, energy and consumer products or services.
It's a good match, says Williams, who was working with friends in Charlotte to start a fund before he met Pompliano. He already had interested investors, and Pompliano brought nearly 100 compelling and investible companies to the table. A third partner, Chris Hare, was a head of industry collaboration at Sony Ericsson and comes with a strong background in intellectual property and mergers & acquisitions.
"I think it's pretty disruptive," Williams says. "The space that we've decided to go into hasn't been democratized or professionalized—it's been a 'rich uncle' space."
It's been a big year for venture capital fundraising nationally. According to the National Venture Capital Association
, venture capital firms raised the most money in the first quarter of 2016 in nearly a decade. Though dollars raised dropped to a more normal level in the second quarter, it's still shaping up to be a strong year for fundraising. 32 new funds were created during the first half of the year nationally.
Full Tilt doesn't seem to be having much trouble. Pompliano says he's getting the attention of Silicon Valley investors and founders. Local investors are in the fund too.
"It's a new day. It's interesting and unique for the East Coast," says Williams. "And I think we'll get in really early on some deals."