Lance Weatherby’s blog has a very interesting point. His blog leads me to believe that the biggest blow to the so-called venture community here is in the real estate market. That market has provided a pretty high risk-adjusted return and frankly, operating seed stage companies don’t necessarily look attractive next to real estate, and most investment advisors will tell you that real estate and venture investment dollars come out of the same “alternative investment” pool of capital. In effect, real estate has crowded out the venture dollars. Perhaps the sub-prime market correction will make angel investments more relatively attractive.

Now, I love Scott’s point that this lack of an ecosystem in Atlanta (his term in an excellent presentation that he gives around town) has led to some very cynical forces; consultants demanding fees for dubious value (can someone downsized from a Fortune 500 really have an intelligent perspective on the seed stage firm?), consultants demanding fees for advice that is frequently free elsewhere, rampant (unlicensed) finders who want a cut of money changing hands in what amounts to rolodex prostitution, and dubious angel networks. But I don’t blame that on the private equity community. I blame it on the fact that our entrepreneurial community is at least 10 years behind the northeast and California in terms of sophistication, odd social factors that make networking in Atlanta an unusual challenge (as well as rampantly poor networking skills, including my own), and overcrowded service provider market with lots of bit players, and the fact that unemployment really should be much higher – many consultants and finders would prefer to get a full time job again, but can’t get one in Atlanta because of all the downsizing and M&A activity that makes jobs redundant.

Solutions? 1) Encourage organic funds to shepherd seed stage companies. Most of these will fail because most virgin (1st time funds fail). It’s a statistical fact. 2) Welcome out of state funds trying to fill the gap. 3) The state government needs to manage the economy better to keep high quality corporate jobs in Georgia and bring more in. We don’t do enough but that’s another blog. 4) Pass, at all cost, the bill that allows GA pension funds to invest in VCs. Make more funds available and earmark a portion for investments of $500K each or under. 5) Each of us who knows something about growing companies should take a couple seed stage companies under our wings and coach them for FREE, and make useful introductions for FREE. I have 3 right now that I am doing this for, and yes it does take some time but I find it immensely rewarding. They will eventually become large customers that will be indebted to you for life. 2 of my present clients are such success stories. Let us, as service providers, help companies put money into their pockets before we try to take it out.

If you actually read this whole thing, don’t blame me.

– mike

Global integration through the rebirth of the .com age and the exponential growth of bandwidth is creating the new ‘diner’ ~ global collaborative environments that help foster the development of ideas, not shut them down to meet ‘investor requirements’.

Scott has identified the real issue – current methods of finding opportunities are not as efficient as they need to be.

Investors must become more PROACTIVE in guiding ventures from the concept development phase, BEFORE the business plan pitch. Through this means, the diamond in the rough will be uncovered and not rejected because of surface imperfections.

So how can one guide every wanna-be fast growth entrepreneurial venture on earth? I’m sure Scott could give you an excellent answer. But here’s a hint:

Facebook You Tube LinkedIn Adobe Breeze iChat Leopard OS globally connected video conference rooms Universities Incubators Chambers of Commerce Business Service Providers Investors Seasoned Entrepreneurs Global Press Business Coaches $0 cost to entrepreneurs = THE Entrepreneurs Society = Positive Global Impact

Don’t just skim over that last paragraph, re-read it and think! If you don’t recognize all the pieces, learn about them.

Then ask yourself this question, “Am I truly caring for those who will take care of this world, or am I ONLY focused on cashflow?” I believe, focusing on the former, will generate the latter.