“They sicken of the calm, who know the storm” – Dorothy Parker.
We have movement. The early-stage venture capital market here in Atlanta is shifting. There is a storm brewing, and I’m not the only one who sees it.
Through their sustained complacency, prolonged fear of failure, disengagement from the larger entrepreneurial community, and inherent cultural shortcomings, the old guard in Atlanta have made themselves largely irrelevant. They have failed to take advantage of the single biggest current driver of the macro venture market: transparency.
Who are the old guard of which I speak? They include our so-called “early-stage angels” which now only seem to invest in post-product/post-revenue slam dunks being driven by proven CEOs, as well as our former high-flying venture-capitalists who have embarrased themselves (by their own admission) by missing success story (JBoss) after success story (EZ-Prints) after success story (MFG.com). And of course there are the hordes of “I-got-my-hand-out-how-about-you?” service providers and the handful of dubious “pay-to-play” angel “deal matching” networks that prey upon ignorant or desperate entrepreneurs.
The old guard have a rather nasty public relations problem on their hand at this point. And fixing their reputation may no longer be as simple as drifting back towards early-stage deals. As a result, some of them are now struggling to raise new funds, getting passed over by local entrepreneurs (oh, the irony), and getting bypassed by out-of-town dealmakers. Perception is reality.
Just as water eventually learns to flow around a rock placed in the middle of a stream, an entirely new generation of entrepreneurs are largely learning how to work around the “rocks” we have in this stream called “Atlanta”.
I have shaken the hands of more out-of-state investors here in Atlanta in the past year than I have the hands of Georgia-based VCs in the past five. More importantly, there is also a growing groundswell of newer, more vibrant seed and early-stage financiers slowly but surely getting their funds together (I know of at least 5 or 6 new seed-to-early-stage funds that are in the works here).
From holding “no-service-providers-allowed” networking meetings to starting small support groups all over the metro area, the entrepreneurs here are staging a comeback. And they’re largely doing it alone. Overcoming adversity is in their blood, after all.
I want you to grab a pen, and mark this day in your calendar. This is the day that I told you: The successful Atlanta investor of the not-so-distant-future is only going to get quality deal flow by being engaged within the community, playing a constructive role within the larger ecosystem, being an approachable resource for entrepreneurs, and being part of the solution, rather than the problem. The days of sitting on the top floor cherry picking deals are largely coming to an end.
There is a quiet storm brewing here in Atlanta, and despite what some might say, this is a great time to be an entrepreneur here.