Next week I am going to visit Scott and Blake at the StartupLounge to record a podcast about what is happening at the ATDC.
They have this nifty little feature that allows you to ask a question that listeners want to hear. You have to register (openness guys, openness) but if you ever wanted to know anything about me or the ATDC now is the time to ask.
I am sitting at the Ritz Carlton Reynolds Plantation surrounded by venture capitalist types at the AeA Venture Forum. A semi-rich target environment for entrepreneurs seeking capital.
Tom Noonan, whom I last saw in Beaver Creek sipping a beer après ski, started the morning with the history of ISS. Very candid conversation about the most difficult days there when they switched to a SaaS model. Based on the murmurings of the lack of early stage VCs in Atlanta these days it is interesting to note that he could not raise his Series A here in 1996.
All this financial mojo has me thinking a bit more about Rich DeMillo’s deforestation comments at the Georgia Technology Summit. Justin Rubner piled on all the writings in the blogosphere on with a lead article (paywall) nine days later. But there is something about the whole blame the Atlanta VC meme that just does not feel right to me. They are not evil tree cuttings fools.
So I started some conversations with my VC friends. And this is what I learned.
Rich’s comment is considered a gross overstatement. Early stage money is in short supply, but it is still available. In 2006 seventeen early stage deals that raised $61 million were completed. Granted that is only 17% of the total raised, but it is there. However the early-stage money shorter supply is raising the deal quality bar. Individuals with a material track record from a previous venture can raise early stage funding. Vitrue and Damballa are evidence of this. If you don’t have the track record you best max out 32 credit cards like Noonan did.
I have come to the conclusion that it is another factor identified by Diamond that contributes to the weakening and collapse of present societies, as the real culprit. And that would be human-caused climate change.
The climate change is the dot com bubble and bust. From a venture capital ecosystem perspective, Atlanta has yet to recover. The funds previously available for angel investing or VC funds have fled to other vehicles that are viewed by rather conservative South as safer. As evidence, in 2006 Georgia companies raised $353 million in venture capital. In Q4 of 2006 $4 billion, yes billion, was invested in Atlanta real estate.
As a result of this flight the Atlanta VC population has died out. Only two firms, Noro Moseley and HIG invested more than $10 million last year. And with NMP V getting close to the end of its life they are somewhat limited in their ability to do early stage deals.
Regardless, climate change is a slow process. The elements to support early-stage investing are present in Atlanta. Don’t just blame the VCs. The causes are larger then that. The solution is more wins that attracts investment back into the tech sector. And VCs are part of that solution.
Trying to think of a nice little SLA (that would be seven letter acronym) to designate the big seven of the consumer Internet world.
Yahoo, AOL, Microsoft, Amazon, Fox Interactive, IAC, and Google. Yah Ma Fig seems to work a little bit better than Gamma Phi (GAMAFIY)
At the moment it only means something in Japanese, though I can not say what.
Google closed the YouTube deal on November 13, 2006. Today, March 13, Viacom sued Google for $1 billion. Like others, I think this is just a negotiating tactic. It will be interesting to see how far it goes.
Here are some Google actions of the past that I pulled from Infoword:
Google’s announcement of its add-on offering came one day before the anniversary of the company’s IPO initial public offering last year. Google being Google, the precise number of shares in the add-on offering is a geek joke: The company filed to sell 14,159,265 shares, a figure yanked from the first eight numbers after the decimal point of the mathematical constant pi. In Google’s initial IPO filing last year, it capped its maximum offering price at $2,718,281,828 — a multiple of the irrational, transcendental constant e.
Is Viacom trying to be clever with the four month thing?
UPDATE: Listening to “All Things Considered” on NPR this evening on the drive back from Reynolds Plantation I learned that today is Pi Day. They are trying to be clever.
The ATDC is a community sponsor of the Atlanta CEO Council. As such I am generally invited to the CXO networking events (If you meet the criteria these are must attends).
Anyhow, upon registering to attend the March 19 event I was presented with a little survey. I don’t remember the exact questions but one of them was something along the lines of what company would make the next big splash in Atlanta. I had a write in candidate.
Viture is a platform that lets corporate customers solicit, edit, and publish, user-generated videos. Essentialy it is meant to stop UGC from being Tahoed.
Nice space to be in.
Vitrue was founded by Reggie Bradford of WebMD and N2Broadband fame. Based on his success there, he was able to raise $2.2 million on the concept from General Catalyst Partners. They used that cash to promptly buy Sharkle and then went out promptly raised a bit more from the likes of Comcast, Turner, Ron Conway, and some local Atlanta investors that I used to share an office with to bring the total to $5 million.
Reggie is doing a grand job building out a first class team. Robert Sanders was recently hired to architect the platform and make it more scalable and he dragged Sudish over with him. I hear they are looking for a CFO with public company experience.
On top of all of this Vitrue was named as a Business 2.0 Next Net company.
Let’s see, proven manager, strong team, big market, PR mojo, and well-funded by quality backers. Pretty good mix.
The only question that I have about the business is will users want to generate content within a walled garden? Me thinks not but enabling them to put the content generated out into the wild of YouTube, Revver, and the like should solve that.
I was weened on U of L basketball. Put attending Indiana University on top of that and I tend to follow college hoops this time of year.
Techcruch posted today about PicksPal. They have this way cool Ajax bracket site. Easiest bracket I ever completed.
Here is my Final Four, to be updated, that I put together with not enough thought.
I currently have Louisville making it to the Elite 8 and IU to the second round. I fear EKU, where i went undergrad, will not make it out of the first round.
I swear I am trying to give up Google. But this cracked me up.
That’s all folks!
I am working on a little project to create a list of the 10 biggest success stories (as measured by valuation) in Atlanta since the beginning of the third age of computing (Mainframe, PC, Internet).
Well I think things have gotten to the point where there is enough intelligence here to answer the question better than I can answer it alone. Here’s the start of the list. Let’s complete the rest.
1. Internet Security Systems. The name pretty much says it all. So does the sales price. Purchased by IBM for $1.3 billion. Lots of jobs remain in Georgia.
2. Cbeyond. A voice and broadband Internet provider built exclusively to serve small businesses. Current market cap as I write of $867 million. CBEY
3. MindSpring. Merged with EarthLink in 2000. At the time the deal was announced MindSpring’s market cap was around $1.8 billion, arguably making it the biggest success of all. Perhaps the bigger story was how the company brought Cali culture to the ATL. EarthLink’s market cap is down to around $850 million so I have them in the number three slot. CamCo. ELNK
4. Knology. Fine folks who we worked with at MindSpring to create a duel Internet service provider infrastructure when TimeWarner told us it was not technically feasible. They are essentially a cable over builder offering triple play services. Market cap just over $500 million. Good values, good people, good jobs. CamCo. KNOL
5. nFront. Provided electronic commerce software and services to community banks so that they could get into Internet banking. Went public. Acquired by Digital Insight. Double whammy. Tripp Rackley drives eight dream cars. CamCo. Looks like Digital Insight was just purchased by Intuit. I fear bad things.
6. Jboss. Open source middleware. Acquired by Red Hat for $420 million. Fluery moves on.
7. CipherTrust. Provides email security to enterprises in via an appliance. Purchased by SecureComputing for $273 million.
So fans of FoG I need your help completing the list. Whose missing? What’s their story?
I have been a loyal subscriber to The Wall Street Journal since 1987. Or I should say a loyal subscriber until last week. It seems that the WSJ has decided to reward my loyalty by charging me 76% more then what they charge new customers.
As a new customer I can get a deal where I pay $99 for a year of service plus eight weeks free. As a subscriber of 20 years the best deal that I can get is $353.62 for two years. When a sales rep told me that the only way I could get the deal was to cancel my account, I did. My thought at the time was that I would just start over in 90 days
But now I don’t really miss it that much. I might not renew at all.
Moral of the story; don’t take advantage of your most loyal customers. If you do, they will find out, get annoyed, perhaps come to the conclusion that the value is no longer there, and then tell all their friends about it.
That’s what Kate knows about skiing. French fry means go and pizza pie means stop to a third grader when learning to ski. Makes sense.
The Kokomo Kid, Kate, Jack, and I are going on our first family ski trip.
We will be in Beaver Creek at the Park Hyatt for four days courtesy of Membership Rewards. If you are not on that program you should be.
They have had 30″ of fresh snow over the past few days and now the forecast calls for sunny and 40 degrees. Should make for great spring skiing.