Urvaksh over at the Atlanta Business Chronicle recently published an article providing some coverage of the new $250M fund being launched by the State of Florida.  After reading it, I became engulfed in a sea of emotions, ranging from frustration to anger, finally settling on a mix of sadness and reflection.

The short version: This new Florida Growth Fund will not only provide capital to venture capital firms (in the form of Florida being an LP - Limited Partner), it will also co-invest (follow, not lead) directly in technology and growth companies.  The fund will be managed by a private equity firm on behalf of the Florida Retirement Pension Fund.

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.

If you care at all about the Atlanta startup ecosystem, Mike Blake and I humbly request your presence next week at the monthly Atlanta Web Entrepreneurs meeting (18th at the ATDC).  Mike Schinkel and the AWE gang have graciously invited Unblakeable and I to present our views of where Atlanta is right now, where we’re going, and some ideas around how we’re gonna get there. We believe that we are at the end of phase 1 in the rebirth of Atlanta, and that we are entering a very different phase 2.

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.

Lately I’ve been getting some blog comments and Skribit “suggestions” from an anonymous visitor.  Let’s just say the comments haven’t been terribly “engaging” - some of them have actually been quite nasty. And look, I’ll be the first to admit this - I cuss like a sailor (well, a former soldier), and believe me, I can carry my weight in a bar, but I try to have at least some modicum of class when it comes to what I post on the Internet.  Nothing says “class act” like posting an anonymous comment on someone’s site and using an email address of “dickbastard@gmail.com”.

I normally would not engage in a dialog over these types of comments, but today I am going to make an exception.  I just received this comment from Captain Anonymous:

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

Wow, where do I begin?

Read more »

I dropped a tweet on this earlier today, but thought I’d drop a quick note here on the blog as well - especially since I’ve been incredibly lazy about blogging lately.  Well, incredibly too busy to blog, actually, but …

A while back, I was approached by a team of entrepreneurs here in Atlanta who were in the planning phases of a new wireless startup called WiFi Cat.  Strange name, I know, but they had a pretty novel idea.  As I tend to do with so many startups these days, I offered my advice on how they could get the venture off the ground from a bootstrapping standpoint.  My advice, of course, is/was worth what they paid for it - zero lol.

At any rate, fast forward.  The team has really made a lot of progress with their model and service, and are finally ready to stand in front of investors and share their story.  I encouraged them to apply to StartupRiot (and CapitalLounge) to start getting their message out there.  They were accepted into both, and will be having their big coming out party at StartupRiot on February 18th here in Atlanta.

I am also thrilled, and flattered, that they asked me to serve on their board of directors, a responsibility that I do not often accept, and one that I take very seriously.  In the case of WiFi Cat, it was really a no-brainer, though.  This technology is going to fundamentally change the WiFi scene, with far reaching implications that will absolutely DWARF the WiMax initiative.

The team also asked if I could present the idea at StartupRiot personally.  While I don’t think I am necessarily the best candidate to pitch the idea (I’d prefer the founders), I think my passion around their idea will serve me well during the presentation.

So, I will see everyone on the 18th at StartupRiot!  Can’t wait until I can finally talk about this deal - and no, i can’t talk about it right now, so please don’t ask!

Cheers.

If you are seeking early-stage capital in Georgia, and haven’t heard about this by now, you should check out what Sanjay Parekh, David Cummings, Allen Graber, Suleman Ali, Wayt King, and David Wright are doing with Shotput Ventures.

You can read more about it on their web site, but basically it is a clone (or close fascimile) of Y-Combinator.   They will invest $5K per team and $5K per founder into an idea, then provide you with additional resources and coaching to help bring your idea to fruition.

There has been some debate as to whether or not this investment model makes sense here in Georgia.  Personally, I think that it does, with some caveats.

Who it is good for: Young, aspiring technology entrepreneurs that can quickly prototype an idea into a tangible product or service.

Who Isn’t a Good Fit (IMHO): This list is a bit longer …

• Entrepreneurs that aren’t really entrepreneurs but are looking for a “job”, or individuals that think $250K (or even $100K) is a valid salary for a startup founder here.
• Entrepreneurs that are still trying to apply antiquated business school methods to startups (i.e. those who think pre-money valuations on pre-product, pre-revenue companies is anything over $250-500K)
• Entrepreneurs who still think that it takes $2-5M to get an idea off the ground (see above)
• Entrepreneurs in non-technology or capital intensive industries (manufacturing, nano-tech, bio-tech, and many/most consumer product plays)

Given that Atlanta has a nice cluster of (younger) idea-oriented technology/software-minded innovators, I think this model has a lot of applicability here.  The metrics make sense to me.  Short time-to-market, quick iterations, fail fast, and move on.  Time will tell, of course, but I’d bet on success.

There have been several successful exits from Y-Combinator companies.  They have proven the model that small investments can create large returns, especially in the web/software space.

I’m sure the founders might have some other thoughts, but these are mine.  Back to work now …

Cheers.

The folks at TAG asked me to help get the word out on their new entrepreneurial survey.  Details and link below!

Subject:  GA Entrepreneurs: Join TAG’s Research Panel

Let your opinion be known: Opt in to TAG’s Entrepreneur Survey

Dear Georgia Entrepreneur,

Technology Association of Georgia (TAG) requests your participation in an important entrepreneur needs assessment survey currently underway.

Your feedback will directly influence programs and policies that affect all entrepreneurs in Georgia.  This is your chance to be heard.

Please take one minute to join our research panel by clicking here: Entrepreneur Survey Opt-in.

Within two weeks of joining the TAG Research Panel, you will receive the “Entrepreneur Needs Assessment Survey” with questions about your needs and experiences.  After you complete our survey, Technology Association of Georgia (TAG) will send you a free copy of “2008 State of the Industry Report: Technology in Georgia.”  This report, which will be published in March, will include hundreds of charts showing technology job growth, venture funding practices, sector growth, the results of this survey, and much more.

We thank you in advance for your participation.

Sincerely,

Tino J. Mantella - President, Technology Association of Georgia (TAG)

The Entrepreneur Survey is sponsored by the Technology Association of Georgia (TAG), an independent non-profit organization dedicated to the promotion and economic advancement of Georgia’s technology industry.

Cheers.

We made the announcement the other night at our quarterly CapitalLounge event, but here it is again for those that missed it.

AngelLounge is the angel investor community component of Startuplounge.  It is currently comprised of 80+ vetted angel investors in Georgia. The member list reads like a who’s who.

The good news is that not only have we not even scratched the surface of Atlanta, but we are also reaching out to other parts of the state as well, including Savannah, Columbus, Douglasville, Rome, etc.

The group meets each month in an almost “unconference” like setting.  The goals are to have an open forum for the discussion of topics relating to angel investing, to encourage cross-pollination among investors as it pertains to deal flow, to create new angel investors by bringing in high net worth individuals seeking to explore early stage investing as a vehicle, and to create a logical funnel for these investors into the early-stage scene in Georgia.

One of the key pain points that has been constantly brought up at the meetings is the lack of exposure to investment opportunities (”deal flow”).  As evidenced by the over 160 companies that attended our CapitalLounge event the other night (over half of which were new to the event), there is clearly “stuff going on”.  So, putting our entrepreneurial hat on - we listened to the customer, and came up with a solution.  Actually, two solutions - a short term and a long term solution.

The short term solution is available today (the better, long-term solution is in development).

We have rolled out an automated deal referral and distribution system.  To distribute information on your deal, simply head to StartupLounge.com. If you haven’t done so, you’ll need to create a free community account in order to participate.

This is different from investment matching sites such as GoBig Network etc. because this isn’t just matching business plans with a blind database.

The AngelLounge members have organized themselves into vertical markets ranging from IT to consumer products to alternative energy to biotech. Each industry vertical has an angel investor volunteering to serve as an IAC (Industry Angel Coordinator). Any entrepreneur within the StartupLounge community can go online, upload their one pager or executive summary, and select the industries that fit the deal. The deal will be distributed on their behalf to the appropriate IACs. 

Every deal will get seen by the network, period - no bottlenecks - no middleman - no gatekeepers.

The role of the IAC is simply to ensure that the information received is actually a fit for the industry (or industries) that the entrepreneur selected. If it isn’t a fit for that IAC (e.g. the entrepreneur selected the wrong industry by mistake), the IAC simply forwards the deal to the appropriate IAC. Assuming an industry match, the deal is then distributed to the angel members who have expressed an interest in seeing deals in that particular market.

Devlishly simple.

Each angel is free to follow-up with the entrepreneur on their own - this is not a pledge fund, or a fund of any sort, for that matter. This is merely a mechanism to get deal flow going among local angels.

The angels have committed to delivering an initial response to the entrepreneur within within one (1) week. This takes us out of the role of gatekeeper and lets you deliver your opportunity directly multiple investors that actively want to see your deal.

This makes StartupLounge/AngelLounge the largest organized angel network in Georgia, and quite possibly in the Southeast.  This group is growing like mad, and there is little doubt in my mind that we’ll reach 100 members by Q1, and quite possibly double in size in 2009.

A special thanks to Jeff McConnell, Chris Demetree, and the others who logged a lot of time brainstorming the system.  Also thanks to Charlie Paparelli (Paparelli Ventures) who puts a boatload of effort into driving the overall effort with AngelLounge.

BTW, if you are interested in joining AngelLounge as an investor member, contact me. There is no fee to join (why should there be?), but there is an interview process.

Cheers.