I was recently copied on an email exchange that took place between an entrepreneur and an investor.
It was brought to my attention that you have included my name and bio in your company materials as an advisor to your company. Both you and I know that I am not advisor to your company. We spoke at (event redacted) some months ago and that is the extent of it. Please immediately cease and desist from using my name and remove it from your business materials. Thanks. (name of angel investor redacted).
The probability of this firm ever raising an angel round just took a serious hit. At the very minimum it lost a potential deal lead. Depending on how this is handled the water could be poisoned across the entire angel community.
While having a small stable of advisors is extremely important for a startup, you need to form relationships with such folks and seek their permission before listing them as an advisor. And after you get them involved you need to keep them engaged so something like the following does not happen.
Lance: Entrepreneur of Newco tells me you are one of his advisors.
Advisor: Yeah, what's going on with Newco, I have not talked with them in a long time.
Getting good advisors is a bit like dating. You don't want to make it of the high school variety where you tell everyone that you are hanging with the hottie when that is not the case. She is going to find out and it is not going to be pretty. Your rep will take a hit and lord knows what her real boyfriend will do.
Jason Calacanis is stirring up trouble again. He has started a war against angel investment groups that charge startups to pitch. Calls it "low-class, inappropriate and predatory." Pretty strong words.
It's amazing that Jason just discovered this practice. But I agree with him. Not the low-class, predatory part. The part that startups should not have to pay to pitch to angel groups. I agree. Don't do it.
I my little corner of the technology startup world I see lots of deals. I have talked to over a thousand startups over the past three years. I have seen lots of startups get funded. I have never seen a startup get funded as a result of paying to pitch. Never. That right there is reason enough to not pay to pitch. It's a waste of time and money.
Good startups and good entrepreneurs do not pay to pitch. They do not have to do so. Good deals get socialized across the angel community pretty fast. If you have to pay to pitch something is wrong. Bad concept or bad team. Don't write someone a check. Figure out what is wrong and fix it.
I was nosing around the Internet looking for a Shotput Ventures term sheet tonight. Doing a little diligence if you will. While not officially associated with Shotput in any way I went and presented over the summer, went to demo day, and am talking to a few of their companies about various things that might help move them along. My googling led me to Hacker News and this snippet of discussion:
But let us say only 20% of the applicants stay in Atlanta.
This
assumption is off by an order of magnitude. YC funded 61 startups in
Boston. Only 3 are still there, and 1 of those is talking about moving
to SV. So the assumption should be more like 2-3%.
For those that do not read HN, pg is Paul Graham. He is a founder of Y Combinator, on which Shotput based its model. The comment in italics is what an Atlanta hacker said about the TechStars companies staying in Boulder.
Now that the first Shotput session is complete we can put some real numbers on the matter. There were eight startups in the Shotput class. Of those three are still in Atlanta. It's early, but that is 37%. The 20% assumption was indeed off. It was low.
Shotput is one of many Y Combinator style startup accelerator programs. David Cummings and the entire Shotput team worked very hard to select the best capital light Internet startups they could find and coach them over the course of the summer.
Eight companies presented at the Technology Square Research Building auditorium. It was a packed house. Standing room only. The effort of the Shotput team and volunteers showed. All the companies did a great job. And I am not just being nice. The presentations and the demos were all first-rate.
Inevitably the question that was asked over and over again at the reception following the presentations was "which were your favorites". I hesitated to answer the question. But when pressed I did. My top three.
EventHive is an application to make conferences more engaging. They popped out of the gate at shotput.eventhive.com. Nice app for presenters to get real time questions, feedback and polling. Users have the option to comment within a specific event or broadcast more widely via Twitter. It worked like a champ and many of the 100 or so attendees used the app to make the Shotput event more interactive. While currently raw, EventHive has the potential to handle event commentary in a much more elegant way than Twitter hashtags. Like it. A lot.
Looxii is developing web apps that make it as simple as possible for companies to get the most out of the social web. They demonstrated a social analytics dashboard, that really did not impress the back channel. I met the founding team during Georgia Tech's digitial media demo day. Smart guys. My bet is they figure out a play before it is all said and done.
Khush's LaDiDa was the best demo of the day. Literally applause in the middle of the demo. LaDiDa, is a reservse karaoke iPhone application that analyzes sung vocals and composes matching accompaniment. Khush was founded by a group of technologists from Georgia Tech's Center for Music Technology.
Again, a great day for all of the companies, not just these three.
And a great day for Atlanta. Over two years ago I was calling for a VentureLab for non Georgia university system startups and supporting Wayt King in bringing the YC model to Atlanta. Now we have them both.
I opened my eyes this morning to the simple thought that technology entrepreneurs and startup investors are wired to move at two very different speeds.
Entrepreneurs want to move fast, decide, get things done, move on to the next challenge on their road to glory, then rinse and repeat.
Investors want to move a bit slower. They are writing checks. Think about anytime you are considering writing a big check. You think about it a lot. Cover all your bases. Do diligence. Get buy in from others of significance.
As someone that has been in both of these roles I am not saying one is right or wrong, they just are. Deal with it.
Know Massey of the Atlanta Technology Angels pointed me to a great article in The New York Times about angel investors and how to pitch them. Toward the end there is a simple summary. It is from an entrepreneur named Ted Ray currently going down the angel path.
Have a product on the market.
Do not ask other people for money until you have spent your own.
Be concise in your investment materials.
Seek angels in your field.
Focus on achieving one and two before taking steps three and four.
AtlantTech reported today that Twitpay has raised an undisclosed round of funding.
Twitpay, the second Startup Weekend Atlanta company to secure seed captial (Skribit being the first), is a simple way to send payments via Twitter. The service is powered on the backend by Amazon Payments. Twitpay went live two weeks ago.
Busy time in the ATL. A brief roundup starting with three big happenings on Tuesday alone.
Georgia Technology Summit
Everybody that was anybody showed up for the biggest and best Georgia Technology Summit. The past twoyears
I have written posts about the GTS entitlled "The Good, The Bad, &
The Ugly." This year I am just going to say good. TAG listens to
constructive feedback and is always working to improve. Paul Stamatiou has a great summary. He even put on a suit to go to the show.
Shotput Ventures Open House
While the dichotomy with the Georgia Technology Summit is striking, the Shotput Ventures
open house was also a huge success. Much younger, happening crowd.
They start accepting applications on Friday. Paul again has a stellar writeup (somebody remind me to throw down some more serious Skribit objectives on him).
TwitPay Moves Money
Twitpay
went live on Tuesday. Twitpay is a simple way to send payments in 140
characters or less. The service is powered by Amazon Payments which
called the service "innovative". Michael Ivey announced this on twitter and then followed up with a longer blog post. Both Michael and Don Brown are excited. So am I and the rest of the team.
The most frequently asked question we received is "when can I use
real money." The answer is now. Twitpay is the most secure,
trustworthy, and dare I say unlike some others, regulatory compliant
social payment platform. Twitpay is an Atlanta Startup Weekend
company. I am an advisor. Good to see it out the door. It will be
interesting to see where it goes.
Meet The VC
The next version of Meet the VC takes place on March 11 and features John Glushik of Intersouth Partners. If you have any intentions of raising capital this year you need to be on hand to get John's insights. Register to attend.
Southeast Venture Conference
While Meet the VC will be a great show it is just a warm up for SEVC which cranks up a bit later in the day. Produced by TechJournal South
SEVC will
highlight the most promising emerging tech firms in the South. The
opening keynote is by Tim Draper of Draper Fisher Jurvetson. Big VC
hob nob.
StartupChicks
A bit on the other end of the spectrum is StartupChicks. A StartupChick is a female entrepreneur who is interested in creating,
building, growing an innovative business that creates value for its
customers, employees, shareholders and ideally, the world-at-large. They are having their launch party
on March 18. I am not exactly a qualified member. However, I totally
support their aim to connect and inspire entrepreneurial women.
Young Entrepreneurs Society
The Young Entrepreneurs Society is a group of Georgia Tech students focused on providing the resources and access needed to be successful entrepreneurs. I went and spoke to the group on Monday. They have great energy and are attracting some attention. You can find the founder Ajai on twitter and he recently wrote about the backstory on the group. If you are an entrepreneurial student this is a great group to find some like thinking people.
Nine firms. Five of which are less then a year old. Too many individual angels to list, including the Atlanta Technology Angels. Who says there is no money in Atlanta? But why are all these investors flocking to a show put on by Sanjay Parekh and a handful of volunteers?
Because companies that presented at Startup Riot last year got funded and or acquired.
Purewire launched at Startup Riot. Raised $2 million. Pre revenue, pre product. Seed stage.
Global Crypto closed a round led by Imlay and included the Atlanta Technology Angels. Pre revenue, pre product. Seed stage.
Skribit took a little money from the Edison Fund. Money that kept Pul Stamatiou from making the trek to the valley when he graduated. Pre revenue. Seed stage.
Jungle Disk was acquired by Rackspace. While the amount was undisclosed, based on this report I would venture a guess that Dave Wright is going to put something between $5 million to $10 million in his pocket. Good for him. But this is a deal that at least one of the above named venture firms would have liked to take big.
Investors are going to Startup Riot because it is a source of good deal flow. And rumor is more deals are in the works.
Yesterday The New York Times published an interesting piece entitled "Angels Flee From Tech Start-ups" that profiled angels and entrepreneurs across the country. While the title nicely sums up the article, it's not exactly the story I am hearing in Tech Square.
To provide a more specific understanding of what's happening with angels in Atlanta, ATDC is putting an interesting twist on its Meet the VC series. They are bringing in three active angel investors to discuss the state of angel investing in Georgia. Mitch Free, founder of MFG.com, Sig Mosley of Imlay Investments, and Gordon Rodgers, angel investor, will sit on a panel for February's Meet the VC event. The session will
take place on Wednesday, February 11th from 7:30 to 9:30 am.
A great way to gain insight into the current state of the angel market.
The opinions expressed here are mine and mine alone (with the exception of comments by others of course). They do not represent the opinion or position of any other person on entity. All postings adhere to my personal values.
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