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Wilmington Investment Network Makes Two Successful Exits

By Jenny Callison, posted Jan 22, 2016
The Wilmington Investment Network, a group of 35 local investors, recently exited two significant investments.

This week, the network got a return on its investment in Oak Court Apartments in Wilmington with the property’s sale to a Charlotte-based group for $4.2 million. In late December, it had another successful outcome with the sale of Raleigh-based Consolidated Asset Recovery Systems (CARS).

Oak Court, a mixed use development with 6,000 square feet of commercial space and 30 graduate student apartments at 251 S. Kerr Ave., was WIN’s first dive into real estate investment, according to the network’s member manager Michael Cain.

Matt Scharf, the managing member for Oak Court’s investors, Ritz Development 7 LLC, made a compelling case to its original backers, Cain said earlier this month. He added that his group had received a “great return” on its investment in the form of a share of monthly revenues during the 18 months it had an ownership stake in the property.

“There’s a time to buy and a time to sell. This was a good opportunity for the investors,” Scharf said Friday.

WIN was part of two rounds of investments in CARS, according to Cain. The Raleigh Software as a Service startup fueled its growth through angel investments alone, he added.

In addition to funding from WIN, CARS was financed by Springboard Capital in Jacksonville, Florida, CARS officials stated in a news release.

Greenridge Investment Partners, based in Austin, Texas, purchased 80 percent interest in the SaaS company, according to the release. CARS’ senior management team, including co-founders Steve Norwood and Terry Groves, “will remain in place and retain 20 percent ownership of the new company,” the release stated.

The sale provided a “classic” exit for WIN – one that all investors hope for, Cain said, explaining that, after a seven-year involvement with the startup, WIN realized a close to ten-fold return: “what we’re all shooting for with an investment,” he said. Details of the purchase price were not disclosed.

CARS’ IBEAM portal technology is designed to help lenders manage repossessions and remarketing of assets – primarily automobiles, but also boats, planes and other heavy equipment, Cain said. IBEAM manages the entire process with everyone involved in the process, including lenders, customers, repossession agents, auction officials and field agents.

Chip Mahan, chairman and CEO of Live Oak Bank, helped mentor CARS, Cain said. The relationship was logical, since CARS’ software connecting parties involved in the repossession and remarketing process is similar in concept to the software Live Oak Bank designed for its nationwide SBA lending business.

Tom Skelton was WIN’s representative on the CARS board, according to Cain.

WIN, which was formed 10 years ago, has 28 active investments after exiting CARS and Oak Court, Cain said. While the group typically invests in technology or biotechnology startups, it is beginning to diversify, he said.

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