The Triangle Tweener Fund, which stemmed from Spiffy CEO Scot Wingo’s Triangle Tweener List, announced its first investments yesterday in four Triangle startups: Vertroos Health (Cary), MemberHub (Raleigh), Bristles (Durham) and a fourth company that did not want to be disclosed yet.
“What we want to do as a community is make this virtuous cycle go faster,” Wingo said. “The top of the virtuous cycle is more startups, and we want more of them to be successful.”
The Tweener Fund has secured pledges of more than $525,000 per quarter, or a total of $2.1 million per year, to invest in local startups chosen by Wingo. The minimum investment is $5,000 a quarter for $20,000 a year, but several investors went far beyond that.
Wingo said the fund has already exceeded his expectations since he formalized it late last year. His original goal was to get around 40 investors on board, kicking in around $200,000 a quarter in investment capital. But now the fund has doubled that in investors with support not just from other founders but from the Triangle tech ecosystem more broadly, he said.
Some of the new fund investors include Glen Caplan, a partner at Robinson Bradshaw in Chapel Hill (and two-time GrepBeat podcast guest); Drew Schiller, the CEO of Durham-based Validic and a past Download Q&A subject; and Jayant Khadilkar, the Co-Founder of Raleigh’s ImpactKarma, a GrepBeat story subject in April, 2020.
The Tweener Fund invests in both “Tweeners”—which Wingo’s annual list defines as Triangle-based tech startups with at least $1 million in annual revenue or 10 employees, but not more than $85 million annual recurring revenue—as well as a few select pre-Tweeners, like Vertroos Health and Bristles. Wingo says the goal is for the mix to be roughly 70 percent Tweener, 30 percent pre-Tweener.
Earlier this month, one of the startups—MemberHub—raised $3.25 million to launch a new software product in 2022. Its core business to date is a platform to help schools’ parent-teacher associations raise money and manage their membership. The new platform will enable consumers making purchases on the platform to get up to 10 percent cash back, with up to 1 percent going directly to the nonprofit of the shopper’s choice.
“It’s a company that has good leadership,” Wingo said. “You can do all this due diligence, but you can’t argue with revenue.”
Tina Tang co-founded Bristles to help consumers optimize their home improvement processes. With Bristles, customers can envision new furniture in their home spaces without the complexity of a green screen.
“It’s pretty unusual to find not only a female founder, but a female tech founder,” Wingo said. “She’s a really good storyteller, so she’s got a very clear vision of what she wants to build and then technology that underpins that I think is pretty unique.”
Vertroos Health was co-founded by Doug Kaufman—a serial entrepreneur best known locally as CEO of Durham-based TransLoc, which was acquired by Ford Motor Company—alongside David Rasch, a former VP of Engineering for RTP-based Infinia ML. The startup’s current focus is building a social network for mental health professionals called Belongly.
“You have a serial founder (Kaufman) that many of us in the community have known for quite a while starting something new, and that’s always very attractive,” Wingo said. “It’s in his wheelhouse. He is from the mental health world, so having him build something in mental health, it feels like a no-brainer.”
Wingo said the Tweener Fund’s average check size right now is $50,000, but there’s room for growth.
“It’s good, but it’s not going to totally move the needle for a lot of companies,” Wingo said, adding he would like to work the average check size up to $100,000 or more over time.
Moving forward in the first quarter of 2022, Wingo said the Tweener Fund is well on track to add 9-11 companies to its portfolio. He intends to end 2022 with 40 investments.