Editor’s note: David Gardner, founder of Cofounders Capital in Cary, is a regular contributor to WRAL TechWire. Startup Spotlight is part of TechWire’s Startup Monday package that includes our exclusive Triangle Startup Guide updates, multiple calendar lists, or exclusive list of Triangle meetups, Startup Rewind and more.

CARY – Investing in a company that grows into a Unicorn (a company worth over one billion dollars) is every investor’s dream scenario.  To invest a relatively small amount of capital at a low valuation and have those shares turn into an exit that is literally life changing for the investor is happening more often these days than you might think.

David Gardner (Cofounders Capital photo)

Until recently, however, that may have seemed out of reach for early-stage investors in NC and the Southeast.  Unicorns were typically found/created by mega investment rounds engineered by top tier venture capitalists on the west coast.   But that was then and this is now.

Graphic via David Gardner, Cofounders Capital

Deal flow has continued to migrate from the old valley to the new one here.  I talk to entrepreneurs almost every week who want to move out of California and start or grow their ventures in the more livable and affordable Carolinas.  They often cite key motivators like more affordable housing, a more available workforce, less traffic, less pollution, less crime, etc.   One entrepreneur from the Valley told me, “What does it matter if valuations are typically half in NC what they are in California if it costs you half as much to start your company here?”    It seems like all of the old rules are up for grabs including where unicorns come from.image2.png

Over the last couple of years, the South East has produced nine Unicorns and four of these have been from North Carolina.    What makes this even more amazing is the fact that startup valuations are statistically less than half as much in the South East as in other typically venture markets.  That means that investors owning unicorn stock here own twice as much equity as those in other markets leading to some truly eye-popping returns!

While North Carolina has historically been known for base-hit exits to strategics rather than mega exits, the fact that there have been repeated Unicorn sightings here is just another indicator that our area is fast becoming a major venture innovation hub for investors.