When I was thumbing through the executive summaries at the 5th annual SEVC back in March I paused to read the BrightWhistle executive summary a bit more deeply. I had been working with co-founders Greg Foster and Chad Mallory for a while and wanted to see how they presenting BrightWhistle at its coming out party. It was one of the best seed stage executive summaries that I have ever read and I have read a lot of them. Eric Gregg of TechMedia was kind enough to provide me with a digital image of Brightwhistle's executive summary for publication here.
It was written about seven months after Brightwhistle was formed. The company had little operating history. Often times entrepreneurs struggle with adequately describing their companies at this stage. This is a great example that can serve as a template for others. Toward this end Greg offered to provide me with Word docs of both the BrightWhistle and StatSheet (which Greg also penned) executive summaries. They are below.
On Wednesday May 2 from 1:00pm - 4:30pm at the Georgia Tech Global Learning Center in Technology Square senior White House officials are hosting a forum. The objective of the forum is to meet with entrepreneurs and hear directly from them on ideas and suggestions for reducing barriers and improving regulations to build a more supportive environment for entrepreneurship and innovation. In short they want to learn how to encourage business growth.
Officials attending the event include Deputy Administrator of the US Small Business Administration Marie Johns, Associate Administrator of Office of Information and Regulatory Affairs Michael Fitzpatrick,Deputy Director of the US Patent and Trademark Office Teresa Rae, Senior Economist at the Council of Economic Advisors Ronnie Chatterji.
Not 100% of it holds true for every startup but it's a great piece of writing.
Anyone who tells you that you need to relocate to the valley for your startups is giving you bad advice and is not to be trusted.
The only upside of the valley is that VCs are often not interested in investments they have to travel for, but if you're doing a modern startup, you should not be going after VC money anyway. You no longer need it for infrastructure, and the cost of VC money (both in equity and the terrible advice they will force on you) is not worth it.
In the valley everything costs twice what it should, the regulatory and tax burdens are unreasonable, the employees are going to jump to the next hot thing, and are generally of lower quality than the employees elsewhere.
Seriously. Give me a state school educated programmer (or one who never went to college-- even better) over a stanford grad any day.
But if you want to build a feature that pretends to be a product that pretends to be a "startup" and you want to raise a bunch of cash from douchebags in order to flip it to Google or whomever in 18 months--- then the valley is the only place to do that.
If you want to start a business, one that will grow and has a chance of being run well, then you cannot do it in the valley, or at least trying in the valley is handicapping your business from the beginning.
Of course, all the people in the valley think the former is the latter and so that's why they advocate people relocate to the valley.
And I'm not even getting into the fact that if your idea is good you'll have dozens of competitors quickly because there is no integrity in the valley-- no VC keeps his mouth shut.
Sublime.
Further down in the comments Chris Stuckey suggested that atdc line up Reggie for an Entrepreneurs' Night. Great idea, I'll try to make it happen. Or perhaps we should get Jessica to fly in.
Shortly after posting I recevieved an email from Merrick Furst. Merrick is a co-founder of Damballa, teachs an undergrad entrepreneurial class out of Georgia Tech's College of Computing, and is managing director of Profounder, a seed-stage investment company in which I am a partner. With a simple FYI at the beginning this is the content of his note.
Ohio Launches Tech Incubator With Fund Led By Sequoia's Kvamme
The state of Ohio is adopting a tech incubator model that has been successful for others, such as Y-Combinator and TechStars, in an initiative to inspire new business ideas and grow the state's economy.
Ohio State University's Fisher College Center for Entrepreneurship has launched 10x, an accelerator focused on the professional development of young, technology entrepreneurs. The program is made possible through capital provided by Ohio's New Entrepreneurs Fund.
The ONE Fund initiative is being spearheaded by Mark Kvamme, director of job creation for Ohio. Kvamme is also a partner at Sequoia Capital who was recruited to head JobsOhio, Gov. John Kasich's new private, economic-development corporation.
Young entrepreneurial teams will compete for 10 spots that will each receive $20,000 for business and living expenses during the 11-week development program.
NCT Ventures, a Columbus, Ohio-based venture capital firm, has already guaranteed that one team to graduate the inaugural 10x program will receive $200,000 in follow-on funding to further pursue its venture.
The participants must agree to live in Ohio for the duration of the program, and any company formed through the program must be set up in Ohio. The teams will have access to all the resources provided by the Center for Entrepreneurship, ONE Fund, NCT Ventures and the start-up community in central Ohio.
"It's a robust environment, more than you would expect from your typical Midwestern town," said Michael Camp, executive director of Center for Entrepreneurship, in Columbus, and the architect of the 10x program. "The notion that place defines how big or good a business can be is out the window."
During my time at atdc I have had two high-level strategic insights of note.
The first occurred back in 2007. I came to believe that atdc needed be more open and reach out to better serve concept and seed stage startups. This, in part, led to the strategic shift atdc began in the summer of 2009.
The second occured this week. Some entity with staying power needs to step up and systematically tackle the lack of seed and early stage funding in Georgia. To architect a program like Michael Camp put together in Ohio. A state fund, big venture capital leadership, a robust program to vet startups, and local angel/venture capital involvement.
That in, 500 words or less, is what I mean by ownership.
I suspect that if some professor where to invite Mr. Blank to Georgia Tech he would have many of the same observations and the challenges would be the same and as equally apparent. Those challenges being the lack of venture capital (this includes angel funding) and the lack of a startup culture. I have never been to Ann Arbor but I suspect that Atlanta's startup culture is a bit stronger than that of Ann Arbor. Regardless Steve states that an influx of venture capital will solve the startup culture problem. Perhaps he is right. But the interesting thing (Steve says so himself) is this.
The interesting thing is that no one seems to own the problem. The University of Michigan tech transfer office has an incubator but 1) mixes software, hardware, med devices and life sciences deals in the same program, and 2) takes no ownership of figuring out how to get a risk capital ecosystem in place. Surprisingly, the same with the entrepreneuship center in the Business School. I would have thought they’d be leading the charge.
Cut University of Michigan and paste Georgia Tech and the paragraph holds true. The closest I have seen to anyone taking ownership is Venture Atlanta, with a hat tip to Morris Manning & Martin and DLA Piper for making an effort to get outside venture capital to invest in Atlanta startups.
But the really truly most interesting thing is that I believe the paragraph above is a prescription on what Georgia Tech and ATDC need to do to drive technology enterpreneurship in Atlanta and Georgia. Stop mixing software, hardware, medical devices, life sciences, and cleantech in the same program. Start taking ownership of figuring out how to get a strong risk capital ecosystem in place. Expand beyond helping entrepreneurs launch and build successful companies. Be on a mission to create a strong innovation cluster.
We are so close. It is so obvious. It would be a shame if we did not make it happen.
So I was having a chat with a VC the other day and he said something quite simple and obvious. To parapharse:
"Sales is everything in the early stage. I really wish that we saw more aggressive CEOs that had what it takes to close deals."
Yep.
All too often entrepreneurs take a build it and they will come mentality. Much more often than not it does not work that way. It is a big reason that founding CEOs get replaced. It is a big reason that the Series B or C is not an up round.
In the early stage sales is everything. Have someone on your team that can close deals.
The continual self consternation of the Atlanta startup community borders on amusing. Dozens of well intentioned people associating and coming up with solutions to what supposedly ails starting a technology company in the South. The solution is really quite simple and straightforward. Atlanta needs more people with FU money.
FU money removes a lot of annoyances and provides a level of day to day autonomy that you just don't have without it. If you don't have to worry about money you can pretty much do what you want. Sure a bunch of people with FU money will buy a new Lexus and drive off to their new second home. But a bunch of folks will want to and have the means to start another company with a win under their belt, which creates a positive reinforcing spiral.
Let's take a recent example, Dell acquing SecureWorks. When the deal went down the infotech circle started buzzing. Lots of discussion on the value of the deal. My thought was it had to be more than $500 million otherwise they would not do the deal but I had a hard time seeing more than $750 million. Splitting the diff I told people that $600 million felt about right. Well it just so happens when Dell released its 10K it disclosed it paid $612 million for SecureWorks (page 112). The point being I have a feel for these things.
So who got the $612? Investors for sure. Employees as well.
If Mike Cote, the CEO of SecureWorks, had rights to the startup CEO median equity of 6% he pocketed $36 million or so. Mike Cote had seven members of his senior management team. The median equity holdings for these types of folks is 1%. Do the math. Eight members of the SecureWorks team have very serious FU money. If I were guessing, like I did with the sales price, I would venture that somewhere between 25 and 50 member of the SecureWorks team are now millionaires. Take the average and you get to 37 or 38.
Some of these folks will start new technology companies. Some will become angels. There are a few VC limited partner types in the bunch and perhaps a actual VC or two. Some will drive off into the sunset behind the wheel of a large self parking automobile. But you wait and see. FU money is the answer to jump starting the Atlanta startup scene. It's as simple as that.
Depending on who you ask Rachel Sequoia gives either the greatest or worst pre-launch startup pitch ever. Either way you have to listen to her. It's an engaging pitch for a ridiculous concept
Last week the Kauffman Foundation released its annual Index of Entrepreneurial Activity. This study is a leading indicatior of new business creation across the United States. The headline was "jobless entrepreneurship" but underneath that were some interesting facts.
Perhaps the most interesting of these was that Georgia, along with Nevada, had the highest entrepreneurial rate in the country. In these states 510 out of every 100,000 people started a company each month in 2010. In Atlanta, 580 people per 100,000 launched a new business each month, second only to Los Angeles. Moreover, over the past decade Georiga led the nation with the largest increase in entrepreneurial activity. While the study is not technology centric these are encouraging stats for a state that has a bit of a startup inferiority complex.
Other interesting facts:
- No surprise but native born white males dominate the entrepreneurial landscape.
- Latino entrepreneurial rates have jumped from 11% in 1996 to 23% in 2010 and index the highest of any race.
- The 20 - 34 age group indexes the lowest on entrepreneurial activity while the 35 - 44 age group is the highest.
- There has been a sharp uptick in less than high school educated entrepreneurs reflecting the current state of unemployment for uneducated workers.
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DISCLAIMER
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 or entity. All postings adhere to my personal values.
