Atlanta is no different than many places. It’s hard to start a company here as well. And, while it has its own unique set of challenges, Atlanta also has a number of advantages that make it a good
place to start a company.

One of the primary ingredients needed to start a technology startup is smart, geeky people. Atlanta is blessed with three major research universities located within six miles of each other. Georgia Tech where the Advanced Technology Development Center (ATDC) is based, ranks as a top four engineering school by U.S. News and World Report. On top of this technical leadership, Emory University, Georgia Tech and Georgia State University all have top ranked business schools. The Savannah College of Art and Design is also based in this small circle. Atlanta has more than enough smart people to create technology startups.

The other ingredient that is needed to start up a technology company is rich people. One of the things that rich people get to do that others do not is decide where to live, and many chose Atlanta.

So Atlanta has a great pool of smart people and a large number of rich people, two of the primary ingredients necessary to start technology companies. The city does, however, have some unique challenges. The three biggest challenges facing technology startups in Atlanta are lack of investment capital, isolation and culture.

While Atlanta is indeed the home of a large number of rich people, they are not the right kind of rich people. Atlanta needs a stronger pool of local angel investors that invest in technology startups. With the notable exceptions of folks such as John Imlay via Sig Mosley, Tom
Noonan and a few others, there are surprisingly few active angel investors with a demonstrated record of investing in technology startups.

If you look at the most successful Atlanta technology startups since the Internet era dawned, companies such as Cbeyond, CipherTrust, Firethorn, Internet Security Systems, Knology, Jboss, nFront, MindSpring, and WebMD, very few of the founders of these companies are investing in the next cycle of startups. In the not too distant future if companies such as CardioMEMs, SecureWorks, SilverPop, and Suniva have successful public offerings perhaps this cycle will change. To be clear, the Atlanta challenge is not venture capital, it’s early-stage seed capital. It’s just enough investment capital from angels that Atlanta entrepreneurs are not tempted to move.

Earliest-stage technology entrepreneurs by nature work in relative isolation. But Atlanta with its sprawl has an even larger problem. There is no startup density. The only two places you can walk into in Atlanta and overhear conversations around technology startups are Octane and Tech Square Starbucks. Density is extremely important for a successful startup environment and technology entrepreneurs.

There are many organizations working locally to address this issue, but two stand out. The first is Shotput Ventures, an accelerator micro-fund that mentors and invests in pre-formation Internet
companies. The second is ATDC, which recently announced a broad strategy to provide comprehensive assistance to technology entrepreneurs starting at the concept phase of company development.

Finally there is the issue of culture. There is no question that Atlanta is culturally vibrant. One could argue it’s the most culturally vibrant city in the South. Atlanta is also culturally traditional. The majority of the people have values that many would consider to be conservative. The anchors of Atlanta business, such as Coca-Cola, Georgia-Pacific, and UPS, are traditional and conservative. There is nothing wrong with traditional and conservative.

However, to a technology startup, traditional and conservative equates to stodgy and not open to new ideas. Technology startups are all about new ideas. A startup’s very essence is about change. With very few anchor companies to support the development of startups and with the means to engage the broader established business community, Atlanta technology entrepreneurs are culturally stranded.

But despite these unique challenges, Atlanta technology entrepreneurs toll on in greater numbers than ever before. Knowing the unique challenges facing Atlanta startups is interesting. Building on
the strengths of Atlanta is more so. Let’s focus on helping entrepreneurs build the next wave of great technology startups.