Last week was awesome. I had the honor of traveling with a delegation of community leaders, including Mayor Kasim Reed, John Yates of Morris Manning & Martin, Bernie Dixon of Atlanta Tech Angels, and the Invest Atlanta executives to Silicon Valley to meet with the top investors (both venture and private equity) about Atlanta.
The purpose of the trip was information gathering, first and foremost. We went to hear their impressions of Atlanta. What do they think of Atlanta from a deal perspective? What do they know about Atlanta? What deals have they done here and what deals have they missed here?
Overall, the feedback was very positive about Atlanta. West Coast investors love the town. Georgia Tech was always mentioned in the first breath. The talent wars for engineers is a major challenge for West Coast companies and the fact that we have GT right here is a huge asset, and they know it.
What I was most excited about was the consistency of feedback. There was little variation in the opinions and even less variation in the advice and recommendations. When asked “How do we engage your firm to invest in more Atlanta companies?” The responses were consistent. I will share the top six areas of advice here.
1. Focussing on connecting Atlanta investor community to the SV investor community is a more scalable bridge than connecting individual deals. When investors have close relationships with other investors, things move faster. When a VC receives a call from another VC saying “this is a good one, you need to see this” — it is so much more efficient than the typical ratio of seeing 200 deals to make on investment.
2. Facilitation of visits really does help. 12 to 20. That’s the number of companies that an investor needs to see (in their specific area of investment) to justify getting on an airplane. If the community can help facilitate these pitch days and tours, it is a meaningful needle mover.
3. When investors look at startups, having Fortune 500 customers matters a lot. Investors said it in every single meeting. If Atlanta can connect our large corporations to our startups for the purpose of making the customers, investors will get really excited. Having Home Depot, Coke, Cox, Georgia Pacific, UPS, Turner, NCR, Delta, and their peers on your “current customer” slide deck is a giant deal.
4. Focus on supporting entrepreneurs. This was one of those that is almost so simple it’s obvious. Creating an environment that is super entrepreneur friendly, really does matter. Help the entrepreneur. Make things easy. Help them avoid distractions, help them find each other, help them find money. Make the focus on helping the entrepreneur build great companies and the investors will find them. Venture Capital is a very efficient industry. Money travels with ease.
5. Infrastructure for growing startups matters. I was delighted to hear this direct feedback from Brook Byers and Ted Schlein at Kleiner Perkins. Building community centers like Atlanta Tech Village and ATDC is far from trivial. When they put money into a company they just want to say “GO and GROW LIKE HELL” … they don’t want their portfolio entrepreneurs having to go out and shop for furniture, look at office space, negotiate with internet providers… they just want them to get their ass in gear and go. Incubators and community centers with flexible growth oriented work spaces make a huge difference.
6. Our engineering talent pool, mainly Georgia Tech, is our top advantage. Given that the biggest challenge of Valley startups is finding and retaining solid engineering talent, it is no surprise that the big VC’s see Georgia Tech as a key advantage of Atlanta startups. Bruce Cleveland at Interwest Partners, for example, shared with us his model for offering engineering students who intern with a portfolio company then join full-time after graduation a major signing bonus. It’s the same money you would pay to a recruiter, so just give it to the student instead.
This trip energized me and everyone else on the trip. It was an awesome confidence builder and the great start to many new relationships between the West Coast and Atlanta.
My last takeaway is that we need more trips like this. Startups should get on the plane as often as they can afford and get out there to soak it in, shake hands, get business cards and start to build the bridges. The more surface area that touches the West Coast ecosystem, the stronger our own ecosystem will be. Plus, it’s beautiful out there.