These pitches were all of the single sentence (or paragraph form), and all had common “stop” words removed for clarity.  This cloud is the top 150 terms.

Click for a larger view.  That is all.

Cheers.

As a more “official” announcement (I suppose), I have joined the MFG.com global leadership team to focus on evolving the team, processes, and the technology platform. However, the thing that I am most excited about is the opportunity to also participate in evolving the MFG.com business model itself.

Since I’ve already been there for a few months, we’re knee-deep in a ton of different initiatives already, with undoubtedly plenty more to follow. As time permits, I’ll try to share some of the cooler things we’re doing here in my blog.

In particular, though, we are undertaking some things that will fundamentally shift the landscape of our sector. That’s the kind of stuff that gets me jazzed.

Cheers.

Examples:

• Lack of local funding sources for early-stage companies
• Lack of management talent to take a company from startup to growth stage
• Georgia’s legal inability to invest state pension funds into alternative class investments such as venture capital funds
• Too many smart people are leaving the state
• Lack of this
• Lack of that
• Blah.

Undoubtedly, we all want the Atlanta startup ecosystem to improve (or continue to improve, as I believe is the case).   But for the past few years,  there have been two distinct threads running in parallel.

The first thread is what I described above:  the onslaught of panels, round-table discussions, and speaker events where we continue to beat dead horses. Everyone is searching for the answer – the silver bullet.  And as should be evident by now to all of us – that doesn’t exist.  There is no panacea.  There is no succinct list of things that “if we only did this or that”, we’d be in business.  Lists don’t move the needle.

The second thread, is a veritable tidal wave of radical ideas and new ways of thinking.  And just as history repeatedly tells us, those things move the needle. And that is what I want to talk about in this post.

What I am about to say is going to run counter to many of the things I’ve said or published in the past.  I don’t have a problem with this – I think it  is very healthy, in fact.  As with many startups, here at StarPound, we challenge the ideas of our colleagues each and every day – none of us is the smartest person in the room.  I’d like to think that is a valuable trait of any initiative (startup or otherwise).

When I sold my last business a few years ago (2005) and came up for air, I fell into the trap of saying “hey, there isn’t enough venture capital money in Atlanta.”  That progressed to the position that for some reason or another, it was the fault of the venture capital firms here.   Thankfully, I’ve evolved beyond that narrow thinking.

About 7 or 8 months ago, Mike Blake and I presented our concept of the Atlanta Startup Cloud during a special session of the Atlanta Web Entrepreneurs meetup.  In that presentation, we put forth several ideas.  Chief among them was that we went from a deafening silence to a cacophony of shouts here in the startup community.  In our view, there was too much noise in the community, and we proposed some ways to provide an umbrella for all of it.  I shelved that idea a few weeks later – not because I thought it was a bad idea at the time, but because it seemed to me, at least, that the rebirth of the ATDC was attempting to do a similar thing, so why duplicate effort?

But my thinking has evolved again.  A single umbrella organization or launchpad isn’t the right answer either.  So what is?

How many years can a mountain exist
Before it’s washed to the sea?
Yes, ‘n’ how many years can some people exist
Before they’re allowed to be free?
Yes, ‘n’ how many times can a man turn his head,
Pretending he just doesn’t see?
The answer, my friend, is blowin’ in the wind,
The answer is blowin’ in the wind.

The answer …. is right in front of us.  And if you don’t see it, you are quite possibly part of the problem, and not the solution.

What follows in this post is a fairly unfiltered series of thoughts that I’ve had for the past few weeks.

A Marketplace of Ideas – the Social Media Revolution

Silver bullets do not exist for many challenges in life.  The evolution of any community, startup or otherwise,  requires a marketplace of ideas.  No single idea, group, or cause can move the needle alone. But things have changed – and continue to evolve.  Why?

I’ve said this a hundred times before, and I’ll say it again.  Without the advent and adoption of social media, we likely wouldn’t have any sort of tangible startup ecosystem here at all.  The social media revolution empowered the Atlanta startup community and gave us a much-needed “collective voice.”  In the immortal words of Margaret Mead:

A small group of thoughtful people could change the world. Indeed, it’s the only thing that ever has.

Blogs gave us the ability to not only play the role of citizen journalists, but also the ability to facilitate an ongoing dialog.  Twitter, a tool that I once shat all over, gave us the power to communicate in real-time, overcoming geography and time.    We could now participate in our own marketplace of ideas, unimpeded by legacy stakeholders, traditional media, and bits of stale culture that kept us back.

Social media gave us something that we desperately needed – a vehicle for the conveyance of new ideas, and a way to challenge those ideas.  The end result is a powerful example of group think.  Things like Startuplounge, Startup Riot, Startup Chicks, Shotput Ventures, Startup Gauntlet, Techdrawl, Startup Drinks, and the newly reborn ATDC, would simply not exist had it not been for the mass adoption of social media by the startup community here.  We wouldn’t have cool startup co-working facilities like Ignition Alley, 151 Locust, and others popping up all over town.  We wouldn’t have much of anything.

Remember WifiCat from Startup Riot 2009?  Remember what I said at the end of that presentation?  It was the prolific use of social media that enabled us to pull off that joke.  The fact that we were able to do so told me, at least, that we actually had a startup community in Atlanta now. We couldn’t have done it otherwise.

Even Urvaksh, the technology & startup beat writer for the Atlanta Business Chronicle, is engaged through social media.  And whether you like his ideas or approach, or loathe them, it is a cool thing.  Everyone has, and should have, a voice.  And we do. And voices move the needle.

In fact, there is a great story that you may recall about fifty six men that sat around and bantered about what freedom meant, and what it would take to attain it.  Radical ideas combined with passion gets the needle moving.

“Washing the Mountain into the Sea …”

The flow of water in a stream can be a powerful force.  Simple physics, really, but powerful nonetheless.  If a rock lies in the stream, water will simply flow around it.  Eventually, the rock will erode until it no longer impedes the flow of water at all.

There were certain individuals and groups in Atlanta that missed the boat when it came to becoming engaged within the social media discussion.  By not engaging (for the right reasons, or not at all), they made themselves largely irrelevant.

Case in point, and I’ll go ahead and say it here, because no one else will, despite everyone of you agreeing with me in private.  Look at the Atlanta Technology Angels.  The prior administration did not seemingly truly engage in this new movement, or the social dialog.  Sorry, but sitting on panels, while no doubt informative, doesn’t constitute engagement within the community.  It got to the point where many entrepreneurs simply did not view them as a relevant stakeholder within the community (hindering deal flow).  In many cases, the ATA became the “funder of last resort” in the eyes of many entrepreneurs here.  And no, this does not come just from companies that got rejected by the ATA.  The end result, was that the water learned to flow around the rock.

But that has changed – there is redemption.  Gordon Rogers, the new incoming ATA President, has done an amazing job in a very short period of time in engaging the community – listening, and reacting.  And contributing unique ideas himself.  And giving his time to those that can benefit from it.  The ATA is relevant again, and that’s a very good thing. The ATA has helped moved the needle.

And speaking of giving time …

One of the issues that we have historically lamented here in Atlanta is the fact that many successful entrepreneurs don’t “give back” to the community by serving as mentors and advisors to the next generation of entrepreneurs.  In my view, while this hasn’t completely been turned around, I think we are well on our way.

Case in point.  A few months back, Chris Hanks and I were fiddling around with the idea of having a “pitch-off” competition between UGA and Georgia Tech.  The first event was held a week before the UGA/Georgia Tech football game – fitting!  We were very diligent in trying to identify judges that would not be biased either way – which proved to be a very difficult challenge.

I reached out to two guys in particular that I thought fit the bill – Warren Bare (Headhunter/Careerbuilder) and Mitch Free (MFG.com).  Within minutes of sending the email, both of them not only agreed to do it, but also let me know why they were doing it.   These two (and they aren’t the only ones) embodied the sense of community spirit that we need.  In fact, just before the first pitch started, I leaned over to Mitch and said “hey, thanks for coming and helping out with this, I really appreciate it.”  His response?  “Hey man, the community calls and I come!”  What’s not to love?

Gangs of Five are cropping up all over town.  Investors are becoming more engaged (@Unblakeable is working on a companion post that will go into this in more detail).  More and more successful entrepreneurs are getting back in (e.g. Shotput Ventures).  There is a veritable army of people within the Atlanta startup community that are ready to advise, mentor, coach,  and help an entrepreneur make critical connections.  Bingo.

Yes, we need more folks like Mitch and Warren, but this problem has been diminished greatly over the past couple of years.  Why?  Social media.  They are engaged within the larger dialog – they are plugged in – and they want to help make a difference.  The needle moves again.

Event overload?  I don’t think so.

There was a lot of hubbub recently (here and here) about so-called “event overload” in Atlanta.  Yes, there are now cool meetups, events, and groups popping up all over town. And yes, at times, it can seem to be a bit much.  But guess what, folks?   That’s a good thing.  You don’t go from dying of thirst to drinking from a firehose without saying “WTF?”  But I would call that progress.

Why is it a good thing? These meetups, groups, and events spawn new ideas and new ways of thinking.  And those ideas will eventually get challenged.  And the needle will move again. Rinse and repeat – the needle will keep moving.

Can I go to every event that I am either invited to attend, or want to attend?  Absolutely not.  I have a day job, several non-profit efforts that I’m involved in, oh, and my wife and two kids.  But … cluebell here.  I don’t have to go to every event.  But I like having options. It wasn’t so awful long ago that the only events in town for entrepreneurs were held by service providers and the establishment.   Some of these were (and still are) good intentioned – but again, there was no moving of the needle.

We wanted a vibrant ecosystem here in Atlanta, and guess what, folks?  It’s here now.

There has been a seismic shift in the nature of these social opportunities in Atlanta.

Most of the new organizations that have sprung up are non-profit, all-volunteer, grass-roots organizations where the organizers not only do not get paid, they do well not to lose money.  Most of the new opportunities do not have speakers (remember how much we hated speaker-driven events?)

Most of the new social opportunities vigilantly exclude or limit service provider involvement so that meaningful conversations can take place.  There are real competitors to the service-provider-dry-hump-fests of old (nod to @Unblakeable for that one).

As a result, real entrepreneurs and real investors are attending and that flow has increased steadily over time.  Institutional investors, notably the ATA and Noro-Moseley, are actively reaching out.  You may argue with the methods by which they do so at this point, but the fact they give a damn is incredibly encouraging.  And we need that.

All these things indicate that the new ecosystem is here.  It’s not fully baked yet – that’s years away.  But it’s in the oven and cooking along quite nicely, thank you.

A year from now, many of the things we see now will have fallen by the wayside.  And new ones will have taken their place.  That’s a good thing.  But ideas need to have an opportunity to flourish.  That’s called innovating.  Iteration is important. The only thing that moves the needle is the community – and in this case, the community is the market - not a group, person, or single idea.  Listen to the market – it will tell you everything you want to know.

Improvise, adapt, & overcome

We had a saying in the military – one that predated my service, and one that still exists today.  Improvise, adapt, overcome. In the face of a dynamically changing battle space, military leaders on the ground have no choice but to evaluate their assets constantly, and make critical decisions not necessarily knowing what the next milestone or outcome will be.  Smart entrepreneurs do the same thing.  It’s called bootstrapping.  It’s called being nimble.  It’s called … well, being entrepreneurial!

So, you think there isn’t enough true early-stage venture capital money in Atlanta?  So what? Who gives a shit?  Stop whining and start executing for the love of Pete (whoever that is). Good deals, should they require it, can get funded. We all know this – this isn’t profound news.

Let me lead you through a concise version of the evolution of our StartupLounge philosophy over the past nearly four years:

• 2006: Not enough money in Atlanta, not enough transparency in the capital raising process, some bits of stale culture.
• 2007: People are getting connected, a real dialog is forming, but the problems still exist.
• 2008-2009: Investors are engaged, but entrepreneurs can’t pitch their deals to save their life.  Let’s do this thing called PitchCamp! (200+ CEOS have gone through PitchCamp to date)
• 2010: It’s not about the money – let’s change the format of our CapitalLounge event.  Entrepreneurs need more free education and training, on pitching, financial modeling, sales, etc. More blocking and tackling.  Kids in high school need to view entrepreneurship as a career path. Let’s tackle these problems now.

Again, it’s not about the money.  As an illustration, consider our upcoming StartupLounge event on March 4th.  We are making a ton of changes.  “CapitalLounge” is being renamed to simply “StartupLounge Atlanta”. There will be fewer attendees, but higher quality deals – ones that show traction, passion, and commitment on the part of the founders.  No more colored name badges – who cares who you are talking to at the event?  You aren’t there to get funding – you are there to hang out with like-minded people who care about early-stage companies (for a variety of reasons).  To make connections.  To help each other. To have fun with startups.  To consume copious amounts of adult beverages. And so on.  That’s what it is all about.

All of us, whether in our entrepreneurial endeavors or non-profit/community activities, have to be open to change, and open to being challenged (one of the many reasons I love things like PitchCamp and Startup Gauntlet).  And if you become irrelevant in the process, so what?  Evolve.  Re-invent yourself.  Find another way to contribute, or try and solve a different problem. Do your part to keep the needle moving.

Sig is retiring!! OMFG! What are we going to do?!?!?!?

Nothing.  Sig Mosley’s financial presence will no doubt be missed by us all.  Besides being a great guy, Sig is a legend, as is John Imlay.  But guess what?  The market will fill the void, just as it always has.  It isn’t the end of the world, because as I’ve said already here, it isn’t about one guy, one idea, etc.  Think Shotput Ventures & Tech Operators.  Ashish Mistry announced last night to a roomful of people that he was involved in a new fund.  There will be others.

Build successful companies and have some exits, and everything else will  just happen.  Trust me.

The needle is moving.

But all of our smart people are leaving!!!! OMFG!!

Whatever.

Sorry, but at this point, I have to question the alleged brilliance of “smart” people that leave Atlanta because they couldn’t get their idea off the ground here.

If you are a guy like Jeff Haynie (Appcelerator), and you raise a round of capital outside the state, and move the company thereafter – great!  I’m not talking about situations like that. Appcelerator had close to (if not more than) $1M in revenues before they raised their round and relocated.  That’s called execution.  That example is a perfect template of how to execute.  Traction. Traction. Traction.  And whatever happens, happens.

And I’m not talking about folks like Russell Jurney, who moved to Silicon Valley to expand his views on startups.  Again, different story – Russel took a great opportunity with Ning – he didn’t go there because he “couldn’t raise money here and everything in Atlanta sucks, and I’m sure they will love my idea in California.”

But, if your business plan is basically “I need to raise money for my idea”, you are most likely going to fail anyway, and spending the money to relocate is simply going to get you to your point of failure faster.  Frankly, if that is your path, and your advisors can’t convince you otherwise – I’d actually prefer that you move away from Atlanta.  That way, you can be a burden to some other city’s ecosystem.

If you execute, and do whatever it takes to get your company off the ground (drive value – financial or otherwise), you don’t have to leave Atlanta.  It’s as simple as that.  Atlanta is full of successful companies that didn’t have to leave to get off the ground – the founders just dug in and kept chopping wood (e.g. MFG.com).  Was it hard?  Sure.  But it’s hard everywhere – trust me.

So ….

This is more of a personal statement than anything else, but I am done sitting on panels to talk about what is wrong with Atlanta.  No more task forces, panels, and round-tables for me.  I fundamentally don’t believe anything is wrong at this point – we have gotten what we asked for. I am out of the “lists of things we can do better” and “10 step plans” business.  No more talking about how we get more investors to open up offices here, how we close the funding gap, and how do we get successful entrepreneurs re-engaged.  Those things will either happen on their own, as a by product of the movement, or they won’t.

Instead, I want to talk about innovation, startup strategies, business models, bootstrapping tactics, and ways to help others succeed.  And you should, too.

After all, that’s how we’ve already moved the needle. And that’s how we’ll continue to do so – together as a community.  Anything beyond that is gravy.

Cheers.

I’ll be blogging more about this soon, but we’ve been pretty busy at StarPound lately.  We ended Q4/2009 strong, including the deployment of our platform to solve some major problems for a Fortune 50 customer (largest global player in their industry).  But amid all of the frenetic activity in Q4, something else emerged.  A really, really cool thing that I’ve decided needs to be it’s own thing.

So, to cut to the chase – here is what I am looking for.  Hopefully, some of you may have someone in mind for this:

I’m looking for an energetic, startup-minded developer (C++, Javascript, AJAX, XHTML, CSS, widgets, maybe some PHP, MySQL, etc).  Some Java would be nice, but not required.  The technology is a very unique IP voice application.  I am willing to give this person:

• Fully paid 3-4 bedroom apartment, including utilities – we’ll eventually give you some roommates to work with :)
• Salary, albeit small, but there nonetheless
• Equity in the newco

This person needs to be here in Atlanta, and is ideally a junior level person and is looking for a cool startup opportunity.  This is an awesome chance to get in on the ground floor of something very cool and exciting.

If you have anyone in mind, you can reach me at sburkett AT star-pound-tech dot com (no dashes).

Cheers.

We were pretty excited about the reception we received both at the event, and afterwards via email and other conversations.  Nevertheless, up to now, we haven’t had much time to get the ball rolling on some progress. Such is the joy of having day jobs :)

Fast forward a few weeks to now.  The ATDC announced a big revamp under the leadership of Stephen Fleming (of VentureLab fame).  As part of the revamp, the ATDC is proposing a number of new initiatives and policy changes.  Many of these initiatives either mirror or complement some of the things we were proposing as part of the Atlanta Startup Cloud concept.  As such, we don’t think it makes much sense for us to duplicate the effort.  Instead, we want to do our part to help ensure that the ATDC’s efforts are as successful as possible – and we ask that you get involved as well!

Note: I do think the first part of the Startup Cloud video is still worth watching, especially if you want some background on the Atlanta startup scene.

If you weren’t able to attend their open forum meeting, check out the video here.  It’s definitely worth the time.  Also be sure to read Stephen’s post (Why Are We Doing This?), and our most recent StartupLounge.com podcast featuring Stephen and David Sung (who manages the ATDC Seed Fund).

Mike and I both think that this new ATDC is going to have a profound impact on Georgia.  Stephen is the perfect man for the job, he has a good team in place, and we think his plan is pretty solid.  There has never been a better time to be an entrepreneur in Georgia, and we hope to see everyone at the upcoming CapitalLounge event in a few weeks!

Cheers.

Music and fashion weren’t the only things torn asunder in the 1980s.  We were locked into the Cold War with the Soviets.  The Soviets had missiles in Syria, capable of reaching Israel, and the Soviets/Cubans were monkeying around on the island of Grenada, not far from our own shores.  Two days after the barracks bombing in Beirut, the United States invaded Grenada.  President Reagan, who later became my first Commander-in-Chief,  delivered a powerful speech to the nation about both events a few days later. It was a crazy time.

Those of you who know me personally have a public view of me:  a tech geek, father of two little girls, wacky sense of humor, and passionate about startups and entrepreneurship.  But there is another side of me that many of you don’t know.  One that is deeply patriotic, and incredibly respectful of the traditions and sacrifices Americans have made throughout our history.

This past Saturday was Independence Day, and like so many of you, I enjoyed the fireworks with my family. Our 3 1/2 year old daughter cackled with glee at each explosion and burst of color.  But as each stream of color and smoke faded into the night, I said a small prayer for those warriors that died on the morning of October 23rd, 1983.  I said a small silent thanks to Lang, Dreier, Combites, Rivers, Cortez, Woodberry, Bamford, Starling, Strieter, Sinke, Fuller, Mitchell, Evans, Sciortino, Teal, Rey, and all the rest of the guys I served with in Delta/HHC companies, 3rd Battalion, 64th Armored Regiment, 3d Infantry Division, VII Corps.  Most of us couldn’t wait to get out of the Army, but as the years have rolled by, I think we all look back fondly on that shared experience.

Through Winter Warrior I and II, four Grafenwoehr gunnery densities, countless deployments to Hohenfels and Area Mud, REFORGER, Border Patrol, and all those 2:00am lariat advances and base lockdowns, we develop a shared history and bond that remains to this day.  To my fellow Marne Dogs of the 64th Armored Regiment, and the 3rd Infantry Division: “Rock of the Marne.  Rampage. We Pierce!”

My favorite song is, and since October 1983 has been, our national anthem.  I still choke up whenever I hear it. During a recent recording of the StartupLounge podcast, I was waiting for my cohort Mike Blake to finish munching a doughnut so we could get on with the recording (yes, I’m not kidding).  For no reason at all, I burst into singing my favorite song.  Of course, the mics were on, and the tape was rolling.  Doh!  Afterwards, I chuckled a bit, but Mike thought we should work it in the final edit of the show, as (at the time of taping that show) Memorial Day was approaching. So, we edited it in, complete with an added stadium effect.   I got a lot of emails about the song after we published the podcast, and I thought I would include an audio snippet here in this blog post.

Me attempting the National Anthem on the SL Podcast

Now with the musical portion of the post over with, I’d like to make a brief announcement.  I’ve teamed up with Jason Jones (CresaPartners), a fellow veteran (TOP-GUN!) who flew A-6 Intruder missions off the deck of the U.S.S. Enterprise, to form VetLoop.com.

VetLoop is a unique (not-for-profit) community of veterans in the Atlanta community that aims to:

• Help service members transition from active military service to the civilian workforce, especially those coming back from Iraq and Afghanistan
• Build relationships among veterans in Atlanta to help each other in business
• Educate the veterans community with an emphasis on business topics, and applying the lessons learned in the military to the business world

Once we roll it out in Atlanta, we would like to see the concept spread to other cities as well.

I found this great definition of a veteran online somewhere:

A veteran is someone who, at one  point in his life, wrote a blank check made payable to “The  United  States of America” for  an amount of  “up to and including my life.”

Cheers.

The only thing that can save us now is the passing of time.

Georgia is the last state in the Union that does not allow private equity investments out of the state’s pension funds.  “Last.”  Wow.  Now there’s a word that simply emanates innovation.  Nothing says “cutting edge” like being listed as “last”.

“Last.”  That means that North Dakota is ahead of us in terms of allowing private equity investments from state pension funds.  WTF? Pinch me.

For all the hemming and hawing we hear from the state government about how great Georgia is for innovation, we’re really doing a pretty lame job of walking the walk, and leading by example.  We can pass a bill that invites the 2009 Georgia Peach Queen to appear before the House of Representatives, and slash the budget of the ATDC, but we can’t drive through a key piece of legislation to propel the Georgia economy into the 21st century.

“Last”.   You may also recall that Georgia is also “last” (or at least close to being “last”) in another category as well – public education for our children.  It is no coincidence.  We clearly have a remarkably uneducated group of people keeping us from joining the rest of the country in diversifying the state’s investments in the private sector.  Guess that lack of education has already caught up to us.

Does our state government really take these issues seriously?  Certainly there are some – many of whom I’ve met and had great conversations with.  But as a whole, no.  There are those that are hell bent on laying down in the middle of the street and preventing progress.

The most common arguments that I hear from opponents of such legislation is that it is “too risky” and “wouldn’t provide much in the way of economic development for anyone but Altanta.”  Humor me for a moment.

The Georgia Public Policy Foundation, which is a non-profit, independent, public policy think tank, recently published a very interesting article.  In the article, they cite the “lack of diversity” within the investments of the state’s pension funds.   Every investment has risk, but obviously the only defense against market risk is diversification of investments.  “Diversify or die”, as I like to say.  Not diversifying is even riskier. They lay out a pretty compelling case across the board. Read the article – it’s short and worth it.

With respect to the whole notion that Atlanta would be the sole beneficiary of such investments – that is simply ludicrous.  What these pundits fail to realize is that this is an ecosystem, not a one-way street.  All boats rise with the rising tide.  Would those dollars necessarily create direct jobs in rural areas?  Probably not, or certainly not that many.  Companies that attract venture capital and private equity investment tend to be fast-growth and/or high-tech companies, and those require infrastructure and a large labor force.  And those things exist in abundance in Atlanta, but few other places within the state.  But, what those investment dollars would do is create an economic return for the state.  And those additional dollars eventually make their way into port projects in Savannah, highways, schools, agricultural programs, and other projects around the state. Viewing this issue through any other prism is negligent in my view.

Normally, I would tell everyone reading this to contact your local state representative or senator, and tell them why you think passing legislation to allow the state to invest in private equity funds would be a good thing.  But we’ve all done that already.  Several times (SB80, HR249, etc).  I tire of the whole thing.

The only thing that can save us now is the passing of time, and the hope that at some point, enough rational people are voted into office to get us back on the right track.

“Last”.  I hate being last, don’t you?

Cheers.

We are bringing ideas to the table, and we want to hear yours.  And more importantly, we want to recruit you to help in the effort.  The only way we’re going to get there is if we execute together.  Gee, kinda like a startup team. :)

Click here for full details. Schink does a great job of laying it all out there.

If you currently play a current role in the Atlanta startup scene, want to play a role in it, or give a crap about it at all, you need to be there.  We are going to try and record the session for a slidecast/podcast for those that can’t make it – but no guarantees.

If you have ideas, bring ‘em on.  But don’t forget to bring your spirit of volunteerism with you as well.  Because you are quite likely going to be put to work.  Sitting in the crowd like a knot on a log is going to add zero value.  Throwing out ideas and not stepping in to help bring them to fruition adds only marginal value.  We want those people who are ready to step up and play their part as a software developer, web developer, mentor/advisor, educator, marketer, public relations guru, etc.

Let’s get it on.

Caveat: my wife and I are expecting our 2nd daughter to arrive at any point in the next week or so.  There is a possibility that either Unblakeable will have to go it alone, or that the event gets moved to another time.  Or, that I will run screaming from the building in a panic to get to the hospital right in the middle of something important  :)

Cheers.

We get a TON of applications every time we put together a CapitalLounge event. While most of the applications have some degree of merit, and eventually get accepted, there are many that don’t.  Historically, we have a non-invitation rate of anywhere from 20-30%.   Despite the enormous level of detail that we’ve published as to our selection criteria and process, invariably, we get a flood of emails the week or so leading up to the event with people appealing and arguing with us (or trying to) about why their deal was rejected.

Here is a tongue-in-cheek look at some reasons why the event applications for some entrepreneurs and investors get rejected.  If you don’t find any of this at all funny, then you most likely fall into one of these categories.

Jorg...@wytehowse.guv

We can’t bloody well deliver a confirmation (or rejection) email to you if you can’t even type in your own email address properly.  Please be sure to double-check your email address before submitting a company profile or application!  There have been some really interesting looking startups that have excluded themselves because we just couldn’t reach them.

The Gettysburg Haiku Tapes

Your “pitch” comes across as a rather arcane series of mutterings that is reminiscent of an amalgam of Haiku, the Gettysburg Address, and the WaterGate Tapes.

Four score and seven
I was not a criminal
You must invest now

Seriously – here are a few gems that were rejected (no, I’m not kidding):

COMPANY works closely with our clients to ensure they are dealing with only the best.

We innovate technologies to creation for selected markets within the U.S. and abroad.

We are a leading consumer products company that is seeking angel funding.

Our firm is about MAJOR ROI while innovating the solutions that are needed.

We need angel funding to get our first customers that will be Microsoft and possibly Oracle.

We are a subscription based SaaS company that is vertically focused for maximum ROI.

We are passionate about the overall benefits of our product.

COMPANY is the innovator that will bring many industries to the next level.

Apologies to those who actually submitted these pitches – I was careful not to reveal your company name.  If you recognize any of these pitches, well … now you know at least one reason why you were rejected.  That’s progress in and of itself!

The good news is, these types of pitches are outliers – our educational efforts with PitchCamp (for example) seem to be of value to the broader community, which is cool.

The Great Zorba says you are a SaaS company, no?

If you decide that providing a “short pitch” is not worth your time and leave it blank, or you completely half-ass it, well, you aren’t likely going to get approved.  We aren’t mind readers, and we don’t have time to chase you all over the internet to try and figure out what it is you do.  Luckily for us, The Great Zorba doesn’t approve CapitalLounge applications; we do.

Meaningless Wall of Text Syndrome

We ask all entrepreneurs who have attended CapitalLounge before to provide a brief “progress report” when they apply to the CapitalLounge event.  The idea is simple.  Deals that seem to making tangible progress in between events are going to score higher and move ahead on the list.  Those that are stale, or just flopping around waiting for someone to write them a check, are going to get rejected. If your “progress report” on the application is a copy/paste text version of your business plan, or doesn’t actually mention any recent milestones for your venture, you turn our vetting process (at least in terms of looking at your deal) into a very simple one.  Fail.

According to GoDaddy, my Venture is Coming Soon!

If you have no web site, and you are using an email address of biz...@hotmail.com, you have relegated the status of your deal to a split second, one-way decision on our part.  Sorry, but in this day and age, there is no excuse.  Even a simple teaser web site goes a long way.  And get your own domain for email, for the love of Pete.

Stealth Company That Will Change the World!
If you are in stealth mode, we understand.  Sometimes you don’t want to reveal what you’re doing until you are ready.  We get it.  But if you apply as a “stealth mode” company, you have to give us something better than these for your pitch:

Early stage stealth startup.

Changing the way we work.

Early idea still.

Mulling my next trick.

While we “get” the importance of stealth mode at times, we also “get” our need to figure out what it is that you do.  Otherwise, we’ll just assume you’re a job seeker, consultant, service-provider, etc., and you get a quick trip to File 13.  And no, we aren’t going to sign an NDA in order to learn about what you do (yes, we get asked that from time to time).

Everyone Will Want to Buy a Thin Llama Wearing Raybans!

If your startup focuses on establishing a chain of weight loss clinics, Llama ranches, or Sunglass Huts, the closest you’re going to get to our event will be the coffee shop across the street.  Come on, already.  Have you not read the event details?  The blog posts?  The rants and raves on our podcast about the criteria for getting in?  If you use the words franchise, consulting, clients, strip mall (“mall” in general), or  importer, that is almost a guaranteed rejection.  Nothing wrong with those businesses, mind you.  Just not a fit for CapitalLounge.  Talk to the SBA or your bank.  They are probably going to turn you down, because that is what banks are supposed to do.  But that should be your first stop.

And for the love of Pete – don’t send an email telling us how “we just don’t get it” because we didn’t put your REI or franchise opportunity on a pedestal.  Trust me.  We do.  That is why you aren’t allowed to come.

Have you been injured on the job? Suffered a car accident?

If you are an attorney, accountant, consultant, etc. , wow … you must be completely incapable of comprehending simple English.   We realize that lots of entrepreneurs (would-be or otherwise) work for service providers.  We really do.  But when you apply to attend our event as an “entrepreneur”, and then we research you online, only to find out that you really work for a marketing consulting company, a financial services advisory firm, etc., we have to stick true to our vision and reject your application.

Additionally, we have to be respectful of our small stalwart band of sponsors who pay us money to offset our costs.  We give them exclusivity in terms of attending the event (e.g. we have a legal sponsor, and they are the only law firm in the room).  Works out well for everyone, except you.

Um.  Jimmy works for our startup.  Yeah, that’s the ticket.

If we reject someone’s application to attend, and then you apply and list that person as your “guest” – not so good.  There is a reason we try and vet the attendees for this event.  If you can’t be respectful of this, then you can’t come and play.

Confucious say “man who have bad reputation, doesn’t get to attend CapitalLounge”

If you are known around town as a slimeball, predator, shyster, trickster, slickster, spinmeister, or just someone who “loves me some me”, you can sit outside and pat yourself on the back all night long – because, well, this is America, and you can do that if you so desire. But if you’ve ever taken advantage of an entrepreneur or investor, asked people to pay to pitch, have a reputation for taking but not giving, provide introductions for a “fee”, or  served hard time because you got caught up in one of Mike Blake’s “schemes”, you aren’t getting in.

You don’t know me, but I was the guy who invested first in Google.

If you claim to be an investor of any level, but:

• no one has heard of you
• no one can vouch for you
• you can’t cite or refer to any past deals that you’ve done
• you don’t have a web site (in the case of VCs)
• trying to find you is like trying to infiltrate the Witness Protection Program
• you wear a seersucker suit, put three gallons of Vitalis on your hair every morning, and live out of a 1974 Chevy Vega

… you can sit outside and invest in the guy who is patting himself on the back, while he tries to take advantage of the entrepreneur peddling the Llama ranch PPM.  I will admit, VCs are pretty easy to vet.  If you are a VC, you have a web site, and have raised money from LPs.  If you are a “corporate venture” type – we’ve heard of your company.  If you claim to be an angel investor, well, you better come strong with your pitch and application, or be referred to us by someone – because out of the box, we just assume angels are service providers, consultants, etc.  It’s much quicker than playing the Google game for 30 minutes trying to figure you out.

Oh man, I’m so messed up.

Any combination of one or more of the above is going to be an insta-fail.  We’re happy to be proven wrong …. we just haven’t been yet.

Cheers.

You had the semi-conductor revolution and built a cool ecosystem around it. Great. We get it.

any successful startups in Atlanta?  Seems like alot of “talk” and no meat.  When was the last exit?

For starters, we don’t claim to be on the same playing field as Silicon Valley.  Everyone here in Atlanta realizes that Silicon Valley is an outlier when it comes to startup ecosystems.  As has been pointed out by many (including me), the Valley is a second (some would say third) generation capital market.  Atlanta is still a first-generation market.  You had the semi-conductor revolution and built a cool ecosystem around it.  Great.  We get it.  We also realize that Atlanta, and every other metro area in the country, will likely never reach the level of innovation and high-tech capital investment that occurs in the Valley.  And no one here is saying that we can, should, or will, ever achieve that.  In fact, if we did achieve that, I would leave – because along the way, we would most likely lose focus of the things that do make Atlanta such as a great place to be.  But we do know that given the amount of innovation that does occur here, we can be a better Atlanta, and that is an admirable goal.

Much effort has been put into the startup scene in Atlanta over the past couple of years.  I sold my last venture in 2005.  When I came up for air, I realized that the ecosystem here for startups was practically non-existent.  So a small group of us got to work to try and improve things. Since that time, countless initiatives, groups, funds, and other vehicles have surfaced – all of which have provided the foundation of a real startup community here in Atlanta.  Consider this really profound slide (see the animated version) that Stephen Fleming at Georgia Tech’s VentureLab put together, which illustrates just how many components of our startup infrastructure were not even around just a few years ago.

All of these new funds, events, groups, communities, and educational opportunities have been funneled through social media, which has effectively resulted in a completely new startup ecosystem here.

So, Captain Anonymous, I’d rather talk about what is happening, rather than what you think isn’t happening.  You aren’t even here.

Curious as to exactly what part of the world Captain Anonymous hails from, I looked up his known IP addresses from his various “contributions” to my blog.   While I have no way to verify this, it would appear that the posts were made from IP addresses belonging to Yahoo!’s corporate campus.  Hmm.  They are a pretty big company the last time I checked.  Yahoo! hasn’t been a “startup” in years.  If you are such a startup guru, Captain Anonymous, quit your job at the 600 pound gorilla, venture out on your own, and take some risk.  Then let’s talk again.  For all I know, you are a serial entrepreneur with 10 exits under your belt.  You see, that’s the downside of hiding behind an anonymous moniker – I’m just going to assume that you are an uninitiated troll.

Captain Anonymous wanted to know what exits have occured here in Atlanta.  Well, off the top of my head, here are some that come to mind (a definitive list would be longer, I’m sure – these are just people that I know or deals that everyone knows about – except for Captain Anonymous):

• Scientific-Atlanta: acquired by Cisco for almost $7B
• ISS: sold to IBM for $1.3B
• Jungledisk: acquired by Rackspace
• AirDefense: acquired by Motorola
• CoreHarbor: acquired by USI/AT&T
• Harbor Payments: acquired by American Express
• Digital Insight: acquired by Intuit for $1.33B
• CipherTrust: soldto Secure Computing Corporation for $295M
• Witness Systems: sold to Verint for nearly $1B in cash
• Firethorn (Tripp Rackley, one of our board members at StarPound) sold to Qualcomm for $210M
• APEX Analytix (1/3 of Fortune 100 companies as customers, Noro company, sold to PNC Equity Partners)
• Engineous Software (sold to Dassault Systèmes)
• Gametap: founded by my friend Blake Lewin, acquired by Turner, then sold to Metaboli
• JBOSS: snapped up by Redhat for $350M
• N2 Broadband: Acquired by Tandberg for north of $100M
• Firearms Training Systems (FATS): Sold to Meggitt, a U.K. based defense contractor for $144M
• Weather Channel: acquired by Bain Capital ($3.5B)
• Sciele Pharma acquired for $1.3B
• Procuri: acquired by Ariba for $425M

More importantly, let’s take a look at a list of successful (current) Atlanta startups that have been funded AND are growing (again, off the top of my head – there are plenty of others):

• MFG.com: Completely changed the global manufacturing landscape – invested in heavily by Jeff Bezos and the Samwer Brothers.
• Suniva: seriously revolutionary photovoltaic technology out of Georgia Tech – recently secured a half billion dollar order from their first major customer)
• Vocalocity: A fellow Atlanta VOIP player (to what we’re doing at StarPound), a large customer base, and recently pulled in another round of growth capital
• CCP Games: Developers and operators of EVE Online, one of the most popular (and profitable) MMO’s in existence
• PureWire: Security in the cloud (already snatching up plenty of award hardware, including the coveted DEMOgod award at DEMO 09)
• Everyone at the ATDC – including recent graduates (Global Crypto, Emcien, VendorMate, Synthis, ClearLeap, Biofisica, CogentWare, Damballa, Izenda, Invistics, Sentrinsic, Qualtre, etc.)

It is only a matter of time before we start seeing successful exits from these companies as well.    Considering we’re a first-generation capital market, and still a city that is still shedding it’s industrial legacy, it  isn’t bad at all.  These deals above all happened here in Atlanta, and are all technology companies. Many were acquired by companies located in California, by the way.  If we add the non-technology startups to the mix, the list would obviously get a lot longer.  If you expand the grid to include our closest startup ecosystem neighbor in Research Triangle Park/North Carolina, the list gets even longer.

EDIT: I could have taken an easy shortcut in my original posting here by simply linking to the excellent AtlLogos.com site (maintained by Paul Freet down at VentureLab).  Right now there are 157 early-stage technology companies in Atlanta per Paul’s research.  Obviously, there are plenty more that are in embryonic and/or stealth mode.  One look at the AtlLogos home page pretty much tells you everything you need to know about the Atlanta startup scene.

Is this on par with what is happening in the Valley?  Common wisdom would say it isn’t. But keep reading.

Out of curiosity, I asked Mike Blake, my StartupLounge co-founder (and valuation guru over at HA&W)  to pull some data from S&P (Standard & Poor’s).  I wanted to know how many successful acquisitions or public offerings there were in both the Atlanta and San Francisco bay areas.  We ran the report to cover transactions across all industries (after all, a startup is a startup), and excluded bankruptcies, spinoffs, etc. The timeframe used was from January, 2007 through today (6/3/2009), or just about two and a half years.

There were 754 such transactions in the Atlanta metro area during that time frame.  There were 700 such transactions in the San Francisco bay area.  Expanding the search southward into Silicon Valley reveals an additional 317 such transactions.  So, Atlanta has more than either one of those areas.  Even when you combine the two areas to form the broader bay area, Atlanta has still performed pretty well (754 in Atlanta, and 1,017 in the bay area, or almost 75% in a straight comparison).

Caveat: There are two categories where San Jose had no exits at all.  Since you can’t technically calculate a percentage against a zero value, I cheated a bit, and in the formula gave them a value of “1″.

Here is a breakdown of valuation metrics of these exits:

And finally, a breakdown of the deal sizes:

Some quick observations:

• Atlanta has over twice the number of exits of the San Jose/Silicon Valley region, and slightly more than San Francisco proper.
• Atlanta holds its own even against the aggregate of the larger combined bay area
• Atlanta generated more $1B+ exits than both valley regions, and only slightly less than the larger combined area
• Atlanta generated more total deal value than San Jose/Valley, but less than San Francisco and the larger combined area
• The only sectors where the Valley is clearly far beyond Atlanta in terms of exits is in Healthcare and Information Technology – no surprises there
  
• Atlanta has a commanding lead in several other sectors, though, including Materials, Financials, Industrials, and Consumer
• Atlanta has more sector diversity, which in my view, is healthier in the long-run
• Atlanta has a slightly lower average valuation than the San Jose/Valley region, but less than San Francisco proper and the larger combined bay area

Now, we all know that numbers are like clay in an artist’s hands — they can be molded to represent practically anything you want.  But I think it is safe to say that there is exit activity here in Georgia.  Yes, the $1B+ exits were not all startups a few years ago – most, if not all, were older companies. But the same can be said of the Valley.  Every company is a startup at some point.  And when companies are acquired, some portion of those dollars ultimately factor into regional economic development.

As a point of reference, the bay area in California has a total population of around 7M people, whereas the Atlanta metro area has around 5M.  Also consider this side-by-side comparison of the two geographies from the air at night.  Notice something?  As I’ve pointed out in some of my presentations, Atlanta is effectively an “island”.  We don’t have the benefit of large, adjacent metro areas in our ecosystem.  Not that I’m complaining mind you – the traffic here is bad enough as it is.  It’s just an observation, but an important one.  An angel investor from Cupertino is not going to have a problem doing a deal up in San Francisco (and vice-versa).  We have to make do with the limited resources we have available – there are no other substantive angel investors around us.

Click on the image below and you’ll see what I’m talking about.  In California, it is one big light from San Francisco all the way down to Los Angeles.  Same for Boston and the Northeast corridor.

We have a number of growth sectors here – and they probably aren’t the sectors that would typically come to mind (e.g. enterprise software) when one thinks of Atlanta.  The stretch from Atlanta up to RTP in  North Carolina has more biotech wet labs than most anywhere else in the world.  Digital Entertainment/Gaming is really coming on strong here – Atlanta is home to four MMOs (that I know of), and has an incredibly vibrant community around interactive content, game development, etc.  We have a lot of stuff popping up around nanotech and cleantech as well.

With all of that said, is Silicon Valley a great place to start a company?  Sure.  But so is Atlanta – for lots of reasons.  Are they evenly comparable?  Of course not.  But there are plenty of things happening here in the startup scene.

In my view, the comments from Mr. Anonymous belittle the hard work that has gone on here in Atlanta to improve the ecosystem for startups. Stop hiding behind an “anonymous” moniker – be a part of the solution, not a sideshow distraction.  I invite you to join in the conversation and play a constructive/productive role.  What can we learn from you?  What can you share with us that can help us evolve? All boats rise with the rising tide, as they say.  Doing anything less just makes you look like an asshat.

Cheers.