As VentureSouth surpasses $100 million invested in startups, Co-Founder and Managing Director Matt Dunbar reflects on nearly two decades of backing entrepreneurs across the Southeast. We caught up with him on what makes a successful founder, where he sees opportunities in AI, and what it takes to build a company for the long haul.

You helped build what would become VentureSouth in 2008, during a period of significant economic uncertainty. What gave you the confidence to start, and what did those early years teach you about building through uncertainty?

We launched the group in early 2008, just before the financial crisis really took hold later that year. That was certainly not the economic environment we hoped for as we got started, but the silver lining was that we had not yet made any investments. If we had, they would have likely gone to zero and put us out of business very quickly. Of course we knew from the beginning that startups are inherently risky, but that period of time certainly underscored just how quickly things can change for new ventures, especially things outside the founders’ control — so it provided a stark lesson that entrepreneurs should maintain a healthy combination of optimism and paranoia when building their businesses.

You've evaluated thousands of startups. What qualities consistently stand out in founders who build successful companies?

Building a successful startup is a herculean task that requires a tremendous combination of skills — and luck. The most effective founders we’ve seen have a keen insight into the market they are serving; they are focused, resourceful, and adaptable; and they are highly effective at building and leading great teams. They also have a high pain tolerance and a dogged determination to find productive pathways around the inevitable obstacles every startup faces.

What’s one mistake founders make when preparing to raise capital, and what immediately catches your attention in a pitch?

The biggest mistake we see founders make in fundraising is not doing their homework on the capital providers they are pitching, so they end up wasting their time and resources pursuing capital partners that are not a fit. Founders should view the fundraising process as an exercise in building credibility with investors — so avoiding obvious credibility killers is essential (for example, lack of preparation or responsiveness, making false claims, or not having the humility to admit what they don’t yet know). On the positive side, validated revenue growth from referenceable customers is (almost) always a positive signal that will get the investor’s attention — in a good way!

The Southeast’s startup ecosystem has grown significantly over the past decade. What trends or industries are you most excited about, and where do you see the biggest opportunities?

Founders certainly have access to more resources and capital in the region than ever before, and we are now living in a brave new AI world that will likely amplify both the opportunities and the threats founders face. I am optimistic that entrepreneurs will do what they have done with every prior technology wave and create highly valuable and impactful solutions with the new tools — while also finding ways to mitigate the risks and costs. I am particularly excited about promising advances in physical applications of AI, from energy and materials to life sciences and healthcare. A large part of what makes our business exciting is that we get to learn new things every day from entrepreneurs solving critical problems across a wide array of industries and applications.

Many of our readers are business owners, operators, and aspiring entrepreneurs. What’s one piece of advice you’d give someone looking to build a company that thrives over the long term?

Especially in the current moment with the pace of AI applications and implications, I like to think about a lesson from Jeff Bezos at Amazon. He famously described his strategy of building the business around things that are not likely to change over the next decade (e.g., serving customers’ desire for lower prices, faster delivery, and wider selection) rather than just chasing the new new thing. Amazon is still world-class at leveraging new and emerging technologies to accomplish those objectives, but I think there is wisdom in seeking those foundational truths to build on.

Looking back on your career, what's one lesson you wish you had learned earlier — and that every entrepreneur should hear?

I'm still learning new lessons every day, but perhaps the biggest one is that startups are much harder than they look and success tends to take much longer than expected. Entrepreneurs (and investors) sometimes need to be reminded that headlines touting easy overnight successes are usually misleading, and they should not be surprised or discouraged when the path to success is rocky, long, and winding.

I really like the way Nassim Taleb captured this idea in his book "Antifragile": “Heroism and the respect it commands is a form of compensation by society for those who take risks for others. And entrepreneurship is a risky and heroic activity, necessary for growth or even the mere survival of the economy…. we are grateful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty.”