OPEN DOOR: A KINGPIN OF NORTH CAROLINA'S STARTUP INVESTMENT COMMUNITY DISCUSSES HIS APPROACH TO SUPPORTING ENTREPRENEURS.

• Author: Mildenberg, David

Ninety percent of Cary-based Cofounders Capital's early-stage investments are in North Carolina-based companies, confirming partner David Gardner's central role in the state's venture-capital investing community.

Having started eight companies in his career, he formed Cofounders by raising $12 million in 2015 for a fund that invested as much as $500,000 in 18 businesses. Its success prompted a second fund that collected $31 million in capital last year from N.C. business leaders including Anthony Dilweg, Bob Greczyn, Ven Poole and Scot Wingo. The second fund is making investments in the $1 million range, while setting aside an equal or larger amount as the startup progresses.

Gardner and his partner, Tim McLoughlin, added Tobias Walter as a third principal in January after considering about 100 candidates. Walter was CEO of Durham-based Shoeboxed, which digitizes documents, when it was sold for an undisclosed amount to San Antonio-based Earth Class Mail in 2018.

The author of The StartUp Hats, a book about entrepreneurship, Gardner, 56, has a master's in divinity from Southeastern Baptist Theological Seminary and a master's in information science from N.C. State University. He's a big supporter of Opportunity International, a Chicago-based nonprofit that makes microloans to entrepreneurs in developing nations.

He discussed his work in an interview edited for clarity.

What does a venture capitalist actually do?

We don't run the business. Our job is oversight and helping with strategy, approving budgets, and making sure that funds are being spent according to the budget. We also provide free consulting services. Our CEOs have got to make all of the decisions, but if you ask my advice, we will tell you.

We also do a lot of interviewing for senior manager jobs. And then if someone is not working out, we will do a house cleaning if necessary. Investors are also our stakeholders and sometimes the leadership team is the problem.

How often do you have to change CEOs?

We've never fired a CEO, but 10% to 15% of them haven't worked out. Sometimes they say, "I'm in over my head." Other times, they will say, "I need a mentor," and it worked out where we brought in someone who they reported to, and they became the chief marketing officer or something. Every time, the entrepreneurs have said, "Now I get it."

You are famous for your openness to meeting with entrepreneurs. Why is that?

While I'm very stingy with my time, I also have a personal passion in...