by John Yates
What do Atlanta, Silicon Valley and Boston have in common?
Answer: In their own unique way, they provide entrepreneurs a special opportunity to succeed.
Silicon Valley has a wealth of VC firms. Boston is home to Harvard, MIT and leading private equity funds.
And what makes Atlanta uniquely attractive to technology entrepreneurs?
During recent visits to Boston and Silicon Valley, I discussed this question with venture capitalists, private equity partners and investment bankers. The answers I received were surprisingly positive and highlight several keys to the future success of Georgia’s technology and entrepreneurial communities.
1. Play to our Strengths – Atlanta’s Fortune 500 – During my meetings in Boston and the Valley, I heard the same accolade for Atlanta — you have an outstanding business community of Fortune 500 companies and leaders. The venture capitalists emphasized the value of these traditional companies as strategic investors and prospective customers for companies founded by Atlanta’s entrepreneurs.
The Metro Atlanta Chamber’s Forward Atlanta campaign is targeted on achieving the goal of nurturing relationships between our traditional businesses and our startup community. With assistance from the Technology Association of Georgia (TAG), we can formalize the relationships between tech entrepreneurs and Fortune 500 companies in Atlanta, creating a direct link for entrepreneurs to find allies in our traditional business community.
Our Challenge: To achieve our goal of fostering our startup community, we need to build a lasting communication channel between entrepreneurs and the CIOs and senior executives of Atlanta’s leading “F500” companies.
2. Educate the national VC community – Atlanta is home to highly regarded venture funds such as Noro-Moseley Partners, TTV Capital and H.I.G. While these funds provide critical capital, our early stage and growth companies still must attract additional funding from national VCs, especially in Boston and Silicon Valley.
We need dramatically to improve the communication between our entrepreneurial community and national venture capitalists. During my visits with venture investors in the Valley and Boston, I was surprised at the lack of appreciation for the vibrancy of Atlanta’s startup technology community. As I reviewed a list of our growing tech clients, every fund manager complimented me on Atlanta’s unique blend of companies in the internet commerce, e-marketing, e-commerce, business analytics and software-as-a-service areas.
Our Challenge: We need to construct an up to date electronic pipeline of information to these national funds and keep them updated on our exciting startup companies.
3. Showcase our Universities’ Innovative Research – Georgia Tech and other universities in our state are involved in innovative research in a broad range of areas of interest to venture funds — internet security, biotech, big data, nanotech, and photonics among them. While areas such as solar research have attracted national funding, many innovative research projects have yet to be widely reported to venture funds in other sections of the country.
During a recent discussion with the executive director of Breakout Labs of the Thiel Foundation in San Francisco, I learned of the interest that many investors in Silicon Valley have in specialized research being conducted at Georgia Tech. Connections like this one with early stage capital sources need to be duplicated on a systematic basis.
Our Challenge: We need to continue improving our communication of these innovative advances in our university system and develop a conduit for sharing this research with prospective investors in other sections of the country.
Based on my visits with over a dozen venture investors outside the Southeast, there are several important conclusions:
- There are plenty of capital-seeking innovative companies in Georgia – but capital is not all in our state.
- Most investors outside the region are oblivious to the entrepreneurial opportunities in Atlanta.
- There’s a need to improve communications between our tech companies in Atlanta and the venture and early stage investors in Boston and Silicon Valley.
- Atlanta and the Southeast are seen as excellent opportunities for investment by national venture funds, especially since they have not been targeted by many funds (with the resulting valuation increases).
Let’s work together with the Metro Atlanta Chamber, TAG and the ATDC/Georgia Tech and our local VC community to build the information pipeline between tech entrepreneurs, our traditional business community and national venture funds.
John Yates, an early supporter of Venture Atlanta, is the partner-in-charge of the Corporate Technology Group at the Atlanta law firm of Morris, Manning & Martin. This column is presented for educational purposes and is not intended to constitute legal advice.
OCTOBER 2012 NEWSLETTER
- MIKE ECKERT: State of Angel Investing in Georgia
- JOHN YATES: Spurring Investment in Georgia’s Entrepreneurs
- CHARLIE PAPARELLI: You Made it Here. Invest it Here.