I can't tell you how ironic it was when someone create secretcabal on Twitter. Ironic because there was one. Some time ago the good folks at Noro-Moseley Partners had invited me to a dinner meeting at White Space Gallery. The purpose of the dinner was an open discussion of what's happening in the Atlanta startup community. There was a request not to mention it online, which I respected. As did everyone else. Intriguing.
So last night the entire Noro team assembled along with about 16 people from the tech community. We broke out via dinner tables and Mike Elliott and Alan Taetle opened the proceedings with an overview of Noro. Essentially the firm focuses in a geographic area from Virginia to Texas. They talked a bit about their investing criteria. Noro plans to make about 20 investments across the region from Fund VI. Since that fund closed in 2007 they have made 13 investments. Not a bad pace.
Mike also spoke about the contraction of venture firms both locally and nationally. There is tremendous pressure on the entire venture industry to deliver returns to limited partners. Funding devoted to venture could shrink by another 40% in the future. VCs, including Noro, are fighting for survival.
On to the meat of the matter. All those assembled had two menus. One with food and wine pairings. And a second topic menu.
What's the state of the early stage and growth startup community?
What is the best way for all those assembled to work together?
What are Atlanta's strengths?
What needs to change to foster a stronger community?
There was some great discussion. I was fortunate to sit at Mike's table. I did not know him well before. He is smart and engaging. The table and the assembled group reached some interesting conclusions. Personally my biggest conclusion is this. It's great to see the Noro team creating conversation and showing community leadership.
I'll be darned of I know. But I am going to make my way out to the Ashford Club on Thursday night to hear Fred Sturgis of HIG, Mike Elliott of Noro-Moseley, Nelson Chu of Kinetic Ventures, David Sung of ATDC, Tuff Yen of Seraph Group, and Said Mohammadioun of Tech Operators discuss where the investment opportunities lie at the Wireless Technology Forum meeting. This panel pretty much includes every VC firm in Atlanta. Come on out and learn directly from the guys that are writing checks.
Back in September the fine institute for which I have the honor to carry on my work published a piece entitled "Atlanta Kills Off Start-Up Companies." The words chosen for the headline were, shall we say, unfortunate. It could have just have easily been called "Connectivity Key to Atlanta Startup Ecosystem" or by the paper's official title "The Communal Roots of Entrepreneurial-Technological Growth? Social Fragmentation and the Economic Stagnation of Atlanta’s IT Cluster." Not as catchy I suppose.
Regardless the study's author, Dan Breznitz assistant professor in the Schools of
International Affairs and Public Policy within the Ivan Allen College
of Liberal Arts at Georgia Tech, has taken to the local speaking circuit. He recently presented the findings from his study to the Atlanta Technology Angels.
I have writtenextensivelyabout the Atlanta technology startup ecosystem for the past three years. I don't disagree with Dan's findings. I do have some questions about his conclusions.
On Thursday morning I intend to get those questions answered at the TAG/ATDC Entrepreneurs Society meeting. Dan is being joined on a panel with Linnea Geiss of Arcapita, Mark Johnson of Total Technology Ventures, Patrick Taylor of Oversight Systems, and John C. Yates of Morris, Manning & Martin.
If you have an interest in the Atlanta startup ecosystem this is a must attend event. It's going to be a good show. You can register here.
Shortly after the attention grabbing article entitled "Study Shows Atlanta Kills Off Start-Up Companies" I found myself sitting down with Wright Steenrod of Chrysalis Ventures. Wright leads Chrysalis' technology practice. He likes Atlanta, he likes Atlanta entrepreneurs, and he is looking to make some more investments in Atlanta.
It seems like all this public weeping and gnashing of teeth has led to a good outcome. Wright and other venture capitalists have come to the conclusion that Atlanta might be a ripe place to make some investments. They are getting on planes looking for opportunities.
Back to Chrysalis, on the tech side of their business they invest in companies that make information and
networks more productive and efficient. They are focusing on businesses that use information to improve people's lives by organizing fragmented, diffuse date to make it more relevant and useful. To make it more valuable. Its a great investment thesis and one that has become my own personal area of focus.
Take a peek at Chrysalis' investment criteria and if there might be a fit Wright is in Atlanta quite often these days.
Big news last week in the world of Internet applications was Mint's acquisition by Intuit for $170 million. It seemed to set off quite the storm.
The 37signals blog called it the result of a "VC-induced cancer" to which Fred Wilson responded with his thoughtful post on how exit decisions are made. And it seems that the decision was made by Mint founder Aaron Patzer (which would be the case according to Fred's analysis.)
Here's the deal. There are three types of successful exits for startup founders. You get a new car, you get a new house, or you get a new life. When someone offers $170 million for your startup you get a new life, whatever type of life you want.
I can't sleep. And it made me think of this theory that I have heard from time to time over the past sixty days or so. "I'll sleep when I'm funded" or something to that effect. It's the result of a Russell Jurney asking Hacker News "how much do you work?"
Here's some news of my own. Regardless of the results of the poll, the mean was 57 hours and the mode 60, no investor wants to fund a company so that the founders can sleep more. And any startup that has employees that work less than 50 hours a week is not managing their employees correctly or their funds frugally.
Investors fund startups to capitalize on an opportunity. So they can go grow. Only in the instance where new management is brought in as a part of the funding event have I seen a founder of a funded startup work less rather than more after a funding event. I have been confidentially asking quite a few funded CEOs if they work less as a result of their funding event. Every one said they work more. They might be more efficient because they can afford some things to make them so, but they work no fewer hours.
Investors don't want you to take a break when they fund you. They want you to go faster. They will tell you to go faster. They will demand you go faster.
If you get funded you are not going to get fat. You are going to go faster.
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.
The Liquidity Event Proceeds Calculator, developed as a joint project between the Atlanta Technology Development Center and Siavage Law Group, is a nice tool to figure out the affect a funding round might have on your particular situation.
I bet a spend somewhere between 5 to 10% of my time listening to entrepreneurs give pitches, helping entrepreneurs create pitches, or providing suggestions for improvements to pitches. More often then not I point entrepreneurs to online resources such as the ATDC presentation template or a presentation that I gave at CapVenure on "Communicating With Investors" that made its way onto the Peachseedz Library. And of course Guy's infamous 10/20/30 Rule of Powerpoint is a mainstay as well. But yesterday Paul Freetpointed to this fantastic presentation by Canaan Partners called the "Entrepreneur Pitch Workbook" that instantly became a favorite.
The structure of the pitch section on slides 5 through 11 is a most excellent explanation of the key elements needed in any pitch. Very
specifically follow slide 7. By the time you are finished with the intro slide everyone in the room should know the basic idea and the value proposition of what your company is doing. And at the end, the presentation has a nice summary slide of the structure before closing with a billboard slide with contact information. If you are pitching you want such a billboard up on the screen during Q&A.
An entrepreneur that follows Guy's simpe rules coupled with the objectives based structure laid out by Canaan will be well prepared for a successful pitch.
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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