Triangle Tweener Fund adds new startups to cap busy first year
Last January, prominent Triangle entrepreneur Scot Wingo launched an investment fund for startup “tweeners,” newish companies in the stage between incipient and established. His mission was simple: to grow the area startup ecosystem by funneling local funds to local companies.
On Wednesday, Wingo’s Triangle Tweener Fund wrapped up its first year by revealing the latest additions to its portfolio. Among the new companies receiving investments are a firm that helps people find roommates, a startup that helps people offset their carbon footprints, and a mobile car service Wingo himself founded (Wingo said he recused himself from the decision involving his company).
In total, the fund invested $2.8 million in 48 local companies last year, with 128 investors committing around $6.4 million.
“Our results from 2022 exceeded our wildest expectations,” Wingo said in a statement Wednesday.
How the fund picks companies
As founder of the mobile car servicing startup Get Spiffy and the now-private e-commerce company ChannelAdvisor, Wingo has been part of the local startup world since the 1990s. In 2015, he began releasing an annual “Tweener List,” which has expanded in recent years as Durham and Raleigh have become a more attractive location for startups.
To qualify as a “tweener,” a company must generate annual revenue of at least $1 million or have at least 10 employees. A startup graduates off the list if they reach $80 million in yearly revenue or have at least 500 employees.
In 2015, just 50 companies met the criteria for the list. The latest edition, published last summer, exceeds 250.
Wingo and his fellow general partner Robbie Allen cast a wide net in their approach by writing many relatively smaller checks. In its first year, the average investment amount was $50,000 according to Wingo, who said company selection largely comes down to an algorithm: Is the company headquartered in the Triangle, is it a tweener, and does it have reasonable terms and a round led by another investor?
“Yes to all those, and we write a check,” Wingo told The News & Observer.
The fund also invests in certain “pre-tweeners,” which fall below the $1 million revenue threshold. Wingo said these types of startups must typically have both momentum and leaders with track records of starting successful businesses.
A ‘gun-slinging’ fund
Several recipients said they appreciate the fund’s aggressiveness, especially in a market like Raleigh that doesn’t possess the venture capital activity of other major tech hubs.
“I would say they are probably one of the most gun-slinging investment or angel funds out there,” said Zach Milburn, CEO of Nomad, a “pre-tweener” that’s building tiny home communities for remote workers. “I think a lot of local entrepreneurs have been complaining for quite some time about the lack of access to capital here, that we could really use more funding and also a little bit of riskier funding vehicles.”
Among American cities, the greater Raleigh market — covering Cary, Durham and Chapel Hill — ranked 13th for venture capital deals in 2022, one spot ahead of Salt Lake City and one below Dallas-Fort Worth, according to the financial database PitchBook.
“I think our ecosystem is great but we could always be doing better,” Wingo said in an interview with The News & Observer in November. “We’re in the discussion with Austin and Atlanta. I want us to have our own ecosystem and it’s like an organism, if we don’t take care of it and feed it and think about it as a complicated ecosystem, then it won’t grow.”
Latest additions to the Triangle Tweener Fund (4th quarter 2022)
- Pryon
- Validic
- Phononic
- Impact Karma
- Nomad
- Alcove
- HomeCloud
- GetSpiffy
- Equity Shift
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
This story was originally published January 11, 2023 at 2:51 PM with the headline "Triangle Tweener Fund adds new startups to cap busy first year."
