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Happy Tuesday!

The latest Friday Nooner was notable for several things, including CED’s CEO Kelly Rowell revealing some of the plans for CED’s Venture Connect 2022 Summit and Joe’s bizarre contention that January is somehow the "13th month." It’s the former that’s most important, of course, and CED has opened applications for startups hoping to present as part of the summit. The festivities will take place the week of April 4, aka the first week of the 16th month. Damn, now he's got us doing it too!
 


Tweener Fund

Spiffy CEO and serial entrepreneur Scot Wingo has unveiled his newest effort to support the Triangle’s tech startup scene: the Tweener Fund. Loyal GrepBeat readers will surely be familiar with Scot’s annual Tweener List, in which he shines a spotlight on the not-too-small, not-too-big Triangle tech startups with at least $1M in annual revenue or 10 employees, but not more than $85M ARR. Now comes the Tweener Fund, which will invest in many of those same Tweeners—plus some select pre-Tweeners, especially from entrepreneurs with prior successful exits.

You can invest, too, if you’re an accredited investor who can make a minimum investment of $20K for the first year, paid quarterly. You’d be joining an initial star-studded list of 21 Triangle entrepreneurs—14 of whom have been featured in stories on grepbeat.com—who have already come aboard.
 
Now to the nitty-gritty. The Tweener Fund will be a rolling fund using the AngelList platform, with Scot serving as the lone general partner (GP) and all individual investors as LPs. If the Tweener List has 250ish companies, Scot says, he hopes that the Tweener Fund will invest in perhaps 120-160 over three years, with the decisions to made on a case-by-case basis. “We’re not investing in Pendo—this isn’t for companies that are already big,” Scot says. “Then you have some startups that are bootstrapped and don’t want investment. There will be some triaging of the list.”

The check sizes will depend on what stage the startup is at, with very early stage companies perhaps landing $25K, while those who might be raising a $10Mish round receiving $100-$150K. The goal is to be as entrepreneur-friendly and flexible as possible, or as Scot says, “we’re not going to parachute in and demand some weird deal term.”
 
Scot will run the fund and make the investment decisions, though he potentially hopes to find help from students at Triangle universities. The Tweener Fund isn’t intended to compete with the Triangle’s VC funds and angel groups, but rather be additive and share in deal flow. “The easiest comparison to someplace like my friends at Bull City Venture Partners is that they’re like a mutual fund,” Scot says. “They’re like a Fidelity, trying to pick winners. They’ll make maybe 14-15 investments over a 5-10 year fund. The Tweener Fund is more like an index fund. We’ll make lots of smaller investments on a more programmatic basis.”

One other difference: the Tweener Fund will solely invest in Triangle-based startups. Yay!
 
You can find more info on the Tweener Fund here, or apply directly to invest on AngelList here. Here’s the 2021 Tweener List. Also, TechWire has more detail, including the bold-face names of the 20 Triangle entrepreneurs (plus Scot himself) who have already committed to the fund.


 


Aiding Growth

Most elementary school students could probably tell you that animal waste—manure, if you’re being formal—makes for good fertilizer. Of course, it’s not that simple when it comes to industrial-sized livestock operations and produce farms. That’s where Durham-based Phinite comes in. Led by Australian native Jordan Phasey as Founder and CEO, Phinite has developed an uber-efficient manufacturing process aided by AI and robotics that transforms hog waste into a phosphorus-based fertilizer that can be used by farmers. It turns out that North Carolina is the perfect place to make that virtuous circle work.
 
Read our full feature story on Phinite here.


 


Big Scoop

TBJ’s Lauren Ohnesorge scored a coup last week with her extensive sitdown with the notoriously media-shy Tim Sweeney, the CEO of Cary’s Epic Games and the second-richest person in North Carolina (behind only his fellow CEO of a Cary-based tech company, SAS’s Jim Goodnight). The occasion was Tim’s selection as the TBJ’s Business Person of the Year. I don’t want to give away too many spoilers, though it’s fair to say that Tim is a bit of an odd duck—but very passionate about what Epic Games is building in the metaverse and the way that Apple and Google (in his telling) could significantly inhibit development of the metaverse in general.

You should really read the meaty main story as well as the juicy “13 Questions” sidebar.


 


Dude A-bids

Cary-based Dude Solutions announced today that it has acquired Facility Health, a software firm based in Michigan. PE-backed Dude Solutions is a leader in facilities management software, and Facility Health has operated in a similar space—in fact, the two have already shared a joint client for some time. The terms of the deal were not disclosed, but Dude Solutions CEO Kevin Kemmerer tells TBJ that it would help the company grow significantly over the next year, hiring 150-plus people on top of its current 700ish.


 


Rise Of Triangle

A new report on trends in venture capital from Revolution and PitchBook gives plenty of love to the Triangle. The “Beyond Silicon Valley” report chronicles the growth in funding outside of Silicon Valley, Boston and New York, both by startups located in those smaller metropolitan areas and from investors located there. Revolution is Steve Case’s VC and has a thesis (and slogan, basically) of “Rise of the Rest,” so the fact that it issued a report like this is no surprise. Tim Scales, the director of growth at American Underground, is quoted extensively in the report, which includes a number of stats about the growth of funding in the Triangle. (Well, the report actually says “Raleigh,” but my mind generally substitutes “Triangle” in such cases.) TechWire has the full story.
 
As if to prove the point, Triangle Inno recounts some recent fundraises—including one by Phinite from Item 2 above—and a separate story breaking out the $10M fundraise by Durham-based adtech Kevel that we discussed in Thursday’s newsletter.


 


Granddaddy News

Here are quick-hitters from the two granddaddys of the Triangle tech scene: 1) SAS will once again sponsor a global hackathon in 2022. Teams or individuals (who will be matched with teams) can sign up by Feb. 15 to compete in 10 industry categories ranging from agtech to telecom. 2) Raleigh’s Red Hat announced a new collaboration with Microsoft that will bring the Red Hat Ansible Automation Platform to Microsoft Azure for hybrid cloud automation.


 


NC TECH Nuggets

Here’s a doubleheader of NC TECH stories from TechWire: 1) Startup spotlight: NCTECH prepares in-person, virtual options for 2022 Outlook event; 2) How is your company doing on diversity? NC TECH, partners launches benchmark initiative.


 


Appealing Case

Longtime readers of this space know how obsessed I am with Lauren Ohnesorge’s ongoing TBJ coverage of the bribery case of Greg Lindberg, the former CEO of Durham-based Eli Global. Lindberg’s appeal of his conviction reached a federal appeals court last week. And while it’s a temptation to read too much into judges’ questions during oral arguments—they’re often as likely to be playing devil’s advocate to probe the lawyers’ cases than expressing their true views—the Lindberg team may just have found a potential weak point in one of the judge’s instructions to the jury. Also it’s just fun when a judge refers to “the 800-pound primate in the room.” Stay tuned!


 


Build Great Software

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Because too much news is never enough.

 

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Here are some available jobs at great Triangle startups.

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