Young Entrepreneurs Bring a New Style of Fund to the Southeast
Palmetto Investments & Exchange Group, LLP is here to stay. We are excited to be one of the newest members of the South Carolina entrepreneurial community, and we look forward to helping advance the knowledge economy that is bringing BIG changes to this state.
Here is a little bit about us. Two years ago we formed Palmetto as undergraduates at Clemson University. We brought on 25 partners who live and do business in North Carolina, South Carolina, Georgia, and Alabama with the idea of both utilizing each partner's expertise and supporting each other as we built a diversified portfolio of both public and private equity. Our partners consist of physicians, engineers, scientists, salespeople, finance professionals, real estate developers, accountants and businessmen. The expressed mission of the group is to both support the entrepreneurial efforts of our partners and to use our partners’ expertise to support the development of the new economy in the southeast. We are open to ownership in everything from physician and engineering practices to early stage technology startups. In addition, we have plans to use our financial professionals and real estate developers to manage investments in public securities and real estate. Our model provides the very best of diversification across many different asset classes. It’s a substantial undertaking, but we feel that it can be accomplished because we have some of the most capable people in each industry advising and investing with us.
The idea caught on and we raised our fund very quickly. In addition to our public securities and real estate holdings, over the past six months we have been trying to move into the startup community and have evaluated several companies. This month we completed our first early stage private investment in BeliefNetworks, Inc, a Charleston, SC-based semantic intelligence and predictive analytics technology provider.
Our business model is unique and affords us great advantages in the angel investing and venture capital marketplace. Having private equity spanning professional practices to high tech startups will give us the luxury of large cash flows that can be coupled very nicely with pre-revenue high tech companies. We will be able to use the ample cash flow thrown off by stable businesses such as physician or engineering practices to fund pre-revenue companies that have the potential to be a complete game-changer. You can equate having a basal rate of return from professional practices as the “bonds” and the truly innovative investments as “stocks” in our effort to create a diversified portfolio. We are currently enjoying a growing monthly cash flow which makes our potential to invest in the new economy perpetual.
Real estate holdings provide further diversification. By holding this asset class independent to the new economy and never using leverage, we are positioned to hold our assets and use them to provide returns to our investors at opportune times.
This is a strategy to both increase returns and to mitigate some of the risk associated with early stage seed finance. We feel that our model blending stock, real estate and high cash flow business interests puts us in a great position to participate in the area of finance that the South Carolina new economy needs us most, early stage seed funding. Our fund is diversified enough and contains enough human capital/expertise that we are able to assume more risk than most individual angel investors or member-driven investor networks. Most importantly, putting together stable returns with the speculative new economy has and will continue to provide outsized returns to our partners, but it will also allow us to fill a niche that is largely empty in the infrastructure of the new economy.