Silicon Valley Bank is my bank of choice when it comes to startup banking. The SVB Accelerator program is pretty sweet choice for startups. No need to go to branches and wait forever to deal with some issue. Great online customer service. No monthly fees. And most importantly great value add in terms of advice, education, and connections.
Recently SVB Analytics held an online seminar "Into the Cloud - Trends in Software Investments and Exits." Interesting topic these days and the presentation was chock full of good information. If you want you can download the presention or listen to the seminar playback via the link above.
They spent a lot of time talking about how the current time is much different than 1999. Concentration of high valuations in a few large companies as opposed to more widespread increase in valuations. The New York Timed DealBook had a nice write up on the same subject, "Investing Like It's 1999." A worthy read.
As often happens with webinars I was duel tasking and my attention started to drift until someone put up and started talking about this slide.
I get all the stats. I get all the analysis. But that complete flip flop in operating philosophies from a focus on revenue and profit margins to a focus on user engagement and growth sure make all those backward looking stats a bit less meaningful. And it sure seems familar to me. 1999.
It's back. For the sixth year The Georgia Research Alliance and the Technology Association of Georgia are teaming up to present the GRA/TAG Business Launch Competition.
The competition takes place over the period of four months, and qualified applicants receive publicity, mentors and the opportunity to present their business plans on several occasions to groups of judges comprised of influencers and investors in the community. If you want to get hooked into the Atlanta technology startup scene this is a great way to do it.
I participated back in 2006 as an entrepreneur. It was a great experience that forced me to meet some milestones in the business. For the past three years I have been heavily involved with the competition as a member of the task force and leading the screening team. This is a great program.
The competition culminates with a final competition where the three or four companies will present their business to a panel of seasoned entrepreneurs, venture capitalists, and angel investors from around the country. The winner walks away with $50,000 in cash and $150,000 in a personalized suite of services.
You can read more about how to apply here. Preliminary applications are due February 17.
Congrats to Prerna and Parag for pushing Khush along. They have a nice product roadmap of music applications as they go forward. I saw Prena sing a portion of her investor presentation once upon a time. It was pretty creative and an impressive demonstration of their first product LaDiDa.
Since the season is upon us here's a nice Christmas song demo of the product.
Paul Graham discusses the turmoil in the world of startup funding and the battle between super angels and venture capitalists at Startup School. Insightful analysis and a must view if you have any interest at all in the funding of technology startups.
Money quote: "The next couple of years is going to be a great time to raise money." That does not quite apply yet in this neck of the woods.
In a few short minutes the companies that were selected for Venture Atlanta will be making their way to the stage for six minutes of fame. There are 20 companies on the agenda for the day but a few that are more interesting to me.
I have been advising and coaching Venture Atlanta participants BLiNQ Media, Preparis, ScoutMob, Toomah, Twitpay,and Wavee for quite some time now. Providing strategic advice on their business, helping them to determine the best funding strategy, reviewing and providing feedback on the presentations they are going to be giving. Some of them are going to do better than others. But a year from now I would venture to guess that five of these companies will close a round based in some part on what they do today.
So I was talking to an Atlanta based venture capitalist type. Told me that they were putting together the paperwork to raise their next fund. Going to be twice the size. Good news. The even better news? It is going to include provisions for seed investments in the $250k - $500k range. Another Atlanta VC has been poking around for deals in this range as well. With IDEA, Novak Biddle, and Vahalla dipping down to fund the likes of SolidFire and StatSheet the VC seed funding trend is making it's way to the South.
Everyone knows Atlanta has a bit of a void in seed stage funding. It seems that venture capitalists are starting to move to fill that void. Everybody needs to know that as well.
So Michael Arrington walks in uninvited to a dinner party of a bunch of powerful angel investors and they all shut up and tell him to go away. He starts screaming collusion in a quite successful attempt to draw page views. Good for him.
Well a bunch of angel investors got together over dinner at a place that has an entry wine price of $60 a bottle. What do you expect them to talk about? Lindsay Lohan? Financers get together and they talk deals. They talk deal terms. They talk valuations. If you don't think they are talking about these things you are naive. There is even a quite popular app that enables angels to collaborate with other investors. No BFD. Get over it.
The more interesting thing is this. Right about the time Arrington was dropping his link bomb about walking into a bar local VC Alan Taetle was preparing for a panel at CapVenture. I literally sent him a text "panel fodder" with the link as he was walking to the stage. The conversation did not go that way. Instead in his closing remarks Alan stated something to the effect of "I have never seen a as big a difference between Atlanta and Silicon Valley as I see right now."
Frothy? Only in a Guinness east of the Mississippi. So what gives?
Well this whole super angel VC debate that has been going on for about 90 days is much more than just theoretical. These dudes are going at it. Big name brand funds are swooping down and writing $500k seed round checks. They are doing this for structural reasons that need no explanation to readers of FoG. But they are doing it for another reason as well. Fear. Fear that their way of life with exotic imports, expensive wine, and hot assistants will go away along with that big fat carry if their funds do not perform. Fear is a very powerful motivator.
Here in the South the seed stage investment environment is parched. There is almost zero competition for seed stage deals (I know of one such situation in the past two years). Deals get done. But only the better ones (not a bad thing) and it takes about six months to get something closed. I do not see anything changing that in the near term. These West Coast early stage investors may decide they need to go where the deal terms are better. They may decide they need to travel. I would not bet on that behavior.
As one astute observer said the other night, "if you are portable, go." At the moment, it's hard to argue with that advice. My advice remains unchanged. Focusing on building product and getting customers. You do those two things and everything will turn out just fine.
With that said the real lesson of AngelGate is that there has never been as large a disparity in seed stage investing than what currently exists on the West Coast and in the South. Deal with it.
Sometime toward the end of the first quarter the deal dam broke. Lots of activity. Lots of term sheets. It seemed like these deals had something in common. There seemed to be a trend. So I did a little math. While I am by no means the MoneyTree I counted up 15 deals that had been funded in the past six months that I some knowledge of closing in Atlanta. All of them in the infotech space. Total of $24 million raised. Average deal size $1.6 million.
It is interesting to break out the angel and venture deals. Seven angel deals closed at an average round size off $508k. The smallest deal was $300, the largest $750. The VC deals averaged out to $2.6 million.
The $2.5 venture round has made its way to the South.
Venture Atlanta is Georgia's largest technology investor conference. It connects emerging Georgia technology companies with top-tier angels, bankers, and venture capitalists. This year the conference is taking place at the Georgia Aquarium on October 12th and 13th.
Venture Atlanta is currently seeking technology businesses in all stages of growth that are currently raising or looking to raise capital within the next year. There is no cost to apply or present. Simply go complete the brief application and submit a two page executive summary. Applications close on Friday, August 20.
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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.
