I’ll be helping out again with the Georgia Tech Business Plan Competition, which is always a rewarding experience.  And yes, the good Mr. Blake and I are in the process of giving StartupLounge a fresh kick in the pants.  Stay tuned for more on that.

I’m also sifting through over 200 draft blog posts that I’ve started over the years, in an attempt to locate any that deserve finishing.  The vast majority of them will be deleted, as they are no longer timely or relevant.  But there are a few gems I’ve found already.

At any rate, see you on the bitstream …

Cheers.

“Don’t cry because it’s over, smile because it happened.”
~ Dr. Seuss

I guess this is as formal an “announcement” as I’m going to give on this, but after a lengthy period of soul searching, I have made the very difficult decision to largely step away from StartupLounge.com.

Five years ago or so, when Mike Blake and I came up with the concept of StartupLounge, neither one of us had any idea of what we were getting ourselves into.  Truth be told, I think if we had known how much work we’d need to put into something like this, we may very well not have started it at all.  Some folks have called StartupLounge “influential” or “important”, and I suppose to some extent it is.  But really, at the core, it is/was really about helping people help themselves, then to help others – and about 2 guys having fun yapping on a mic every now and then. And I will tell you – I most certainly learned more about our collective craft than others probably learned from me.

My reasons for stepping back from heavy involvement in StartupLounge is complex, and somewhat difficult to explain.  A big part of it is the time commitment required to record and produce podcasts (40 hours a pop), organizing events, PitchCamp, evangelizing, etc.   I simply do not have the time anymore to contribute at a high level in order to continue making a difference.  And when you’ve poured your heart and soul into something for as long as we have with StartupLounge, it makes the decision a very emotional one, to say the least.

Another huge factor in my decision is simply the level of energy required to perform my duties at my day job (StarPound).  Although we have a great deal of work ahead of us, the team is really doing some great things there. We’ve recently raised another round of capital, and are heads down on a ton of different things right now.

Finally, and perhaps the most important reason, is my family.  As it stands now, I am rarely home in time for dinner (thanks in part to Atlanta traffic).  I have a wife and two young daughters at home that I hardly ever see these days.  And this needs to change.  So, something has to give.

I should also add that there has been some speculation that my health is suspect, and that this somehow is contributing to my decision.  This is patently not true.  Sure, I’m battling a kidney stone right now (ouch!), but this too shall pass (literally and figuratively). Trust me. I’m as fit as a horse.  Then again, they shoot horses when they actually do get ill, so maybe that’s a bad analogy to go with.

Through StartupLounge, I have met some incredibly wonderful people over the past several years.  Entrepreneurs, most of which want to do something great.  Investors who actually want to engage with them.  And a wealth of community leaders and stakeholders who want to make a difference. I place an extremely high value on these relationships, and hope to continue nurturing them for years to come.

One person in particular, though, has meant the world to me throughout this journey.  Mike Blake.  I have come to rely on his wisdom and sensibilities for so, so many things.  Not just professionally, but personally as well.  I can only hope to one day even begin to repay him for the friendship, comaraderie, and contributions he has made to my life. Mike and I remain the best of friends, and I appreciate his understanding and patience throughout my rather circuitous decision making process.

With all of that being said, I should add that StartupLounge will continue on.  The inimitable  Josh Watts has agreed to replace me as the co-host of our podcast.  If you don’t know Josh, you should.  I can’t think of a better person to step into that role.  He has a solid understanding of early-stage entrepreneurship, technology, and carries with him a wicked sense of humor that will help keep the StartupLounge podcast as entertaining as ever.  So for you die-hard listeners of our podcasts, rest assured, it will continue to be worth tuning into. Who knows?  I might even make a cameo appearance every now and then :)

All of the free StartupLounge events will continue, including PitchCamp, Startup Seminars, and of course, the thrice yearly StartupLounge gathering in Atlanta.  Expansions are already underway to carry the philosophy and beliefs behind StartupLounge to other areas, including Savannah and Raleigh/Durham.  Mike is 100% committed to doing this, and his continued leadership will turn this into a reality.

As for me, well, it isn’t like I’m completely falling off the face of the earth.  I’ll still be around, helping as many people as I can, where I can.  I just may not be as visible. I will continue to attend StartupLounge events when I can, as well as others.  I continue to take enormous satisfaction in helping others achieve success, be it through mentoring, speaking, coaching, etc.  Oh, and continuing to learn new things myself.  I can’t imagine my life without those things, quite frankly.

Enough rambling from me.  I now return you to your regularly scheduled programming.  Peace out.

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.

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.

CapitalLounge

Being a co-founder of StartupLounge, I’m naturally biased.  But hey, at least I’m being honest about it. :)  Our next CapitalLounge gathering is coming up next week, Wednesday, June 10th.  Should be another awesome party for entrepreneurs and investors in Atlanta.  Our old friends J-Cap and DJ from Southern Capitol Ventures (yes, an “o”, not an “a”) are making the trek down from Raleigh, NC, as will the folks from Intersouth (also in NC).  Local investors will be out in full force as well, including Noro-Moseley, Fulcrum Ventures, Kinetic Ventures, Croft & Bender Capital, Arcapita, Grey Ghost Ventures, CEO Ventures, TechOperators, and even the Weather Channel’s venture arm.  And of course, a nice smattering of local angel investors.

If you are interested, you can check it out here.   Cost is free, but there is a vetting process.

Calling All Entrepreneurs: Atlanta!

Speaking of J-Cap and DJ from SCV … they will be in town on the 10th and the 11th.  In addition to hanging out at CapitalLounge on the night of the 10th, they are holding their “Calling All Entrepreneurs” sessions here in Atlanta.  Awesome.  I wish more VCs would do this.  No pressures, no pitching.  Just getting a chance to pick the brain of an investor over coffee.  Very cool.    From Jason:

David and I will be down in Atlanta next week on June 10 and 11. We were an original sponsor of CapitalLounge and will be at that the night of June 10th.

On June 11, we will have Calling All Entrepreneurs in Atlanta from 7-10am. We will find a place close to the ATDC. Again, any entrepreneur or aspiring entrepreneur is welcome to set up a time to come meet with us for 10 minutes. We will try and pack in as many meetings as possible and the coffee is on us! Read my prior post on this so you understand the structure and background. We did  this down in Atlanta a while back and filled it up quickly.

Just email me jason AT southerncapitolventures.com to schedule a time.

CapVenture

Also, don’t forget that the ATDC’s deadline for applications for their annual CapVenture program is on June 16th (the actual sessions are later in the year).  If you aren’t familiar with CapVenture, you should be.  It is an awesome program that aims to educate and equip early-stage entrepreneurs (primarily those seeking their first round of funding).  I have personally talked to several startup CEOs that have gone through the program and they rave about it.  Definitely check it out.

Of course, there are a ton of other events going on, some formal, some informal.   Feel free to drop a note here if you know of another great startup event happening here in Atlanta in June, or tune into the Twitterverse to get plugged in.

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.

“This makes AngelLounge the largest organized angel group in Georgia, and quite possibly in the Southeast.”

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.

As I mentioned in my last post, our next Capital Lounge event is this Wednesday, 8/27. This is going to be far and away the best event we’ve done, on so many levels. More quality deals, more investors (4 to 1 company to investor ratio), and a couple of pretty big announcements, including one in particular that, to quote Mike Blake, that will “change the face of of the Atlanta early stage capital ecosystem.”

There can be no sacrifice of the vision.

If you’ve ever planned a big event before, you obviously know all of the logistics and planning that go into it. CapitalLounge is no different. It’s a ton of work, for sure. But one thing that we do that many other groups don’t do is vet the attendees. This adds an order of magnitude to the effort required to pull off this event.

A key reason for the success of the CapitalLounge event is our vigilant effort to restrict attendance to direct capital providers and entrepreneurs with fast-growth potential. Investors and entrepreneurs are able to get maximum value from the event when they can spend their time establishing relationships with one another, rather than be distracted by other entities (hordes of service providers, job seekers, low quality deals, investor-wannabe types, etc.)

For the upcoming event, roughly one (1) out of every 4.5 applications was rejected for one reason or another. That’s a lot of filtering – and that equates to a lot of work. We have to do it this way – otherwise, we end up becoming the thing that we are trying change. There can be no sacrifice of the vision.

We get a lot of questions (especially from those whose applications are rejected) about the criteria we use, how we review applications, etc. Even though a lot of this information is automatically emailed to the applicant if their application is denied, I thought it might be instructional to provide a little more insight into how we select entrepreneurs, investors, and observers for this event.

Some General Background Info

Much like an investor is going to take just a few seconds to make a quick judgment call on whether or not they wish to look at a particular deal, we do the same. But we have to do it while drinking from the firehouse of applications that come pouring in each time we announce this event. First impressions go a long way, obviously.

95% of the applications that are approved gain that approval generally within a minute of us looking at it. The other 5% come from those that we have to research, those that appeal and change our mind, etc.

Also, because of the volume of applications we receive, coupled with the fact that this is a not-for-profit, grassroots, volunteer community effort, we can’t respond personally to each and every application that gets rejected. Sorry – we have day jobs, too. Please keep that in mind before writing us nasty-grams.

The Signup Process

Before I begin, it is important to talk about the actual signup process. For some reason, some folks seem to get confused about the process, despite it being described very clearly (and in detail) on the site. The first time you apply, it is a 3 step process – for future events you’d like to attend, it is a 1-step process.

First, you have to create a free community account. No biggie – name and email address are basically all that is required.

Second, you have to login, and create at least one active profile. A profile is way for you to model your presence within the ecosystem. Since you can have multiple profiles associated with your account, it facilitates parallel entrepreneurs that have multiple deals going at any given time, entrepreneurs who are also angel investors, etc.

A note regarding profiles is in order. What you put in your profile is important – it isn’t just fluff or crap to store in our database. Obviously, it is the first thing we look at when we are evaluating the merits of you being in the room. If you give us little information to go on, then that’s what we’ll use when we look at your deal. If you get rejected because you put some lame one-line pitch in (e.g. “We’re a software company”), don’t complain when you get denied.

Finally, once you have a profile, you can simply visit the event calendar on our site, and apply to whatever events you want (CapitalLounge, PitchCamp, etc.). Of course, for subsequent events, you can skip steps 1 and 2, since you will already have your profile in the system.

How We Evaluate Entrepreneurs

There are lots of reasons why we reject an application from an entrepreneur – more so than any other classification of attendee. Here are some of the more common ones:

The event is simply full

Due to the extreme demand for this event, coupled with the limited size of our venue, we have instituted a cap on the number of deals that we can facilitate at each events. It is entirely possible that we are simply full for the current event. The chances of this happening are much higher the closer we get to the date of the event. We typically approve applications for somewhere between 125-150 companies for each event.

Geography:

The venture must be located in the Southeast United States (preferably in Georgia) or anticipate a relocation to Georgia in the near future. While we certainly want to pull regional deal flow, deals from Georgia will take precedence over deals from other parts of the region. Again, the closer we get to the actual date of the event, the worse your chances are of getting in if you are a non-Georgia company.

Service Providers:

The primary business of the applicant must not be the provision of consulting, legal, accounting, design, marketing, recruiting or other professional services for cash. This is obvious, and a core part of our StartupLounge mantra. In fact, I’d go so far as to say we helped pioneer the “no service providers allowed” rule in Atlanta. We’re proud of it. It’s a key reason why this event rocks. It’s a key reason why a lot of other events aimed at entrepreneurs are not as successful – because those events are often overrun with service providers, and that scares off most legitimate entrepreneurs and investors.

We do realize that often times, entrepreneurs have to bootstrap their company by earning money doing whatever they can. Often, this means the entrepreneur is not only the founder and CEO of Acme Software, but also a marketing consultant for hire (or some other service profession). I will admit that these are almost always judgment calls on our part. There is no silver bullet. While we want to help every entrepreneur we can, we also have a responsibility to the larger StartupLounge community to preserve the integrity of the event by keeping service providers out. Often times, we’ll talk to the entrepreneur to make sure that they realize that they are there to represent their startup, not their services business.The few that have gone against their word won’t be coming back.

If we do approve the application of someone who also has a services business going to pay the bills, it is absolutely imperative that they represent only their startup while at our event. Representing the services business in any form at our event, be it verbally in conversation, handing out another set of business cards, following up with someone after the event and attempting to sell them services, etc. would most likely prevent the entrepreneur, their guest, and their company from attending future events, and could likely generate some ill-will out there among the StartupLounge community of entrepreneurs and investors. Our community is incredibly protective of the environment that we are trying to create at CapitalLounge, and most violations – even slight perceived ones – get back to us as organizers pretty quickly.

Non Fast-Growth Company

The primary business of the applicant has to “likely be of potential interest” to investors as a fast-growth opportunity. This type of venture will eventually employ between 20 and 500 people, have sales growth of at least 20 percent projected each year for four straight years, and target five-year revenue projections between $10 and $50 million (at least). Typical industries would include (but are not limited to) information technology, healthcare/medical devices, life sciences/biotech, pharmaceutical, nanotech, alternative energy/cleantech, and new media. Ventures within industries such as newspapers, gambling, franchises, real estate, food/spirits distribution, pornography, or other such markets are not a good fit for this event.

While we are certainly staunch advocates of small business, the CapitalLounge event is not aimed at providing the level and type of capital needed to launch small businesses that are generally not considered to be venture-capital type opportunities. These include, but are not limited to: franchises, restaurants, consulting businesses, professional services such as accounting, brick-and-mortar retail opportunities, fitness clubs, health spas, faith-related businesses, real estate development, distributorships, and certain consumer product ventures. If your application described what would be considered a “lifestyle” or services business, we would almost certainly deny your application on this basis.

We do recognize that sometimes, companies that would not initially be classified as a “fast-growth” opportunity could take off, and turn into billion dollar companies. Unfortunately, we can’t predict the future, so we have to draw a line in the sand somewhere.

Freshness of Deals

We strive very hard to keep the event “fresh” for our investor community by trying to get as many new deals in the room as possible. New deals will almost always take precedence over deals that have attended the event at least 2 or 3 times in the past.

Lack of Progress

If it is our perception that the venture has not materially progressed since the last “n” times that you attended CapitalLounge (if applicable), your application to attend will likely be refused. Examples: After attending CapitalLounge for 2 or 3 events in a row (better part of a year!), you still don’t have a web site, your product hasn’t launched yet, you have no PR stream, your expectations of investors were and continue to be out-of-synch with the current market, etc. In short, you seem to be waiting for someone to write you a check in order to further your idea.

We did a lengthy “Under the Bus” segment on this type of entrepreneur in our recent podcast with Noro-Moseley Partners.

Low Quality Deal

If your deal is perceived to be of a level of quality beneath what we consider to be the “minimum threshhold”, your application will likely get rejected. We research each new deal that is submitted prior to making a decision on them. Things that may count against you: not having a web site, having an email address from a free email provider such as Yahoo! or Hotmail, some negative information from your past that we found on Google, you have a day job as a service provider – but no web site for your new venture, you have a web site for your services company but not your new venture, etc.

Yes, this is subjective. We realize this, and it isn’t going to change – because it can’t. Think of this as an aggregate of things. If there are too many yellow flags on your deal, you will likely either get rejected outright, or go into the hold queue pending further research.

I could give you lots of examples of some of the things we’ve seen, but obviously I don’t want to embarrass anyone. Trust me, though – we’ve seen it all.

Lack of Information

If we simply cannot find enough information about your venture to make a decision, we will likely have to reject the application. For example, you have no web site (or the one you provided doesn’t work), and the one-line pitch you provided on your application is nebulous (“We’re a technology company” .. WTF?).

We simply don’t the time to fill in those kinds of blanks. You’ve got to give us *something* to work with.

Sneaking Someone In

You have specified someone to attend with you as your guest, and that person does not meet the established criteria (or does not appear to be associated with your venture). You wouldn’t believe the things we’ve seen. Thankfully, we’ve prevented a lot of them, but occasionally, someone manages to sneak in (or sneak someone else in).

How We Evaluate Investors

Track Record – Known Entities

All investor attendees must either themselves be an investor with a known track record of investing or work for a recognized private equity investment firm.

If you claim to be a venture capitalist, but we’ve never heard of you, and you have no web site – your application will most likely be rejected. VCs have web sites, and their investment histories are easily found through Google. Don’t apply telling us that you are a VC representing a $250M fund, if the only thing we’re going to learn about you via Google is that you used to play penny stocks.

If you claim to be an angel investor, and our due diligence on you does not reveal a track record of investment activity (including deal references, public records searches, references from angels we do know, Google searches, etc.) – your application will most likely be rejected.

If you are an “angel investor” who also sells insurance, you probably aren’t going to get in. We realize that a lot of angels have day jobs, too (most actually do). These are typically handled on a case-by-case basis.

If you have a known track record of angel investing, it gets a lot easier to overlook your day job.If you are already a member of certain (but not all) Angel groups (e.g. AngelLounge), this could help your cause. Being a member of an angel group that is dubious will likely hurt your chances, however.

No Brokers

Investment bankers, capital brokers/finders or other placement agents are excluded from attendance, with the exception of those entities that commit their own capital, and certain wealth managers that represent high-net-worth individuals desiring to make alternative class investments.

If an investor entity offers professional services, they must also have their own capital to commit in order to gain entrance to the event. This is handled on a case-by-case basis. While we (mostly me) do not prefer this model to a pure risk model, the entrepreneur has to decide whether or not to engage this type of investor.

Pay-to-Pitch Entities

If you offer “pay-to-pitch” events for entrepreneurs, your application will likely be rejected. We believe that access to capital providers should be as transparent as possible – we philosophically disagree with the middleman model.

How We Evaluate Observers

Observer slots are reserved for members of the media, academia, certain industry bloggers, government, certain non-profit organizations, and guests that we choose to invite at our sole and absolute discretion. If you apply for an observer slot, and you are not obviously representing one of these entities, your application will be refused.

The Appeal Process

We do have an appeal process in place for those whose applications are rejected, but feel they should still be allowed to attend. Details of this process are contained in the email itself. However, I will say this – repeatedly arguing with us if your application has been rejected is probably not going to help. We have been known to change our minds. We can (and want to be) be convinced.

Generally speaking, though – if you are rejected and you file an appeal, we’ll ask to review your executive summary, one-pager, etc. This is really the only way to really see what the business is all about. We have, in the past, initially ruled out an entrepreneur based on their one-line elevator pitch alone – because it didn’t sound like it would be a good fit for the event – only to reverse the decision after reviewing the executive summary. Several times, actually.

So if you do appeal, come strong.

Easy Ways to Get Rejected (or possibly Banned!) from CapitalLounge

• Lie to us about something
• Try to sneak in when you don’t get in on your own merit
• Try to sneak someone else in
• Treating our event as a sales platform
• Signing up for our event, being accepted, and then not showing up without either notice or explanation
• Screwing one of our investors or entrepreneurs
• Repeatedly writing us nasty grams because your application was rejected
• Make no progress in your venture in the 3 months between events
• Whine about superficial stuff
• Make NO progress… (worth repeating)

Closing

The selection process isn’t perfect, and we realize that. And we iterate it constantly. Any suggestions for improvement are obviously welcome!

Cheers.

Our next Capital Lounge event is next Wednesday, 8/27, and man is it shaping up to be a good one.

As it stands right now, this will be the best investor turn out to date (due I think in large part to the success we’ve had with our Angel Lounge initiative). Right now we have over 40 investors signed up, and that number will probably drive closer to 50 in the next few days. There is a slight edge in the number of angel investors, but it is pretty evenly split between angels and traditional venture capital firms.

Over 150 entrepreneurs have signed up as well, and about half of them are new deals. Very cool to see that trend continue.

Of course, we try very diligently to weed out service providers, job seekers, etc. in order to create an environment conducive to having substantive discussions between innovators and capital providers.

if you want to meet the movers and shakers in the startup community (ATDC, VentureLab, regional VCs, local angels, and a veritable army of fellow entrepreneurs), you need to be there. And why not? It’s free.

We’re going to be making some cool announcements there as well. ;)

As a reminder, we are capping attendance (for entrepreneurs, at least). So if you haven’t applied, and you want to attend, you should probably apply sooner rather than later.

Cheers.

I was unable to attend Startup Riot as I came down with a nasty cold over the weekend, but from all I’ve heard, the event was another stepping stone for the Southeast. Kudos to Sanjay for stepping up and putting a lot of his time into the event. (StartupRiot Flickr stream here). Lance Weatherby posted a nice rundown of the companies that presented at StartupRiot as well – check ‘em out.

I think the smart kids leaving Atlanta to go ply their trades in Silicon Valley are going to eventually regret their move. Atlanta is back – and what we’re seeing now is merely the tip of the iceberg. As I was quoted saying in Dan Greenfield’s excellent piece – I think a year or two from now and Atlanta’s tech and startup scenes will be unrecognizable.

Now we have to sustain this momentum as a community. History is full of flashes in the proverbial pan. I, for one, don’t want to see it go down like that. And it won’t.
Our StartupLounge event tomorrow night will hopefully put a nice bow on what has been an incredible month for startups in Georgia. The event is full – unless you are a last minute investor who wants to attend – but you can read the details here. We’ve also posted new dates for CapitalLounge, AngelLounge, and PitchCamp …

BTW, congrats to SoloHealth – who just scored a new round of funding. They’ll be hanging out at our CapitalLounge event again tomorrow – so if you’re coming, be sure to congratulate Bart Foster and his team.

Yes, the storm is here. No, I mean really. As fitting as this sounds – as I write this draft, we are under a tornado warning. One just touched down a few miles from here.

See you on the bitstream …

Cheers.

Hosting the Cleantech Georgia 2008 event was a ton of fun (my corny jokes aside). We had a great docket of speakers and panelists, and each delivered some incredibly valuable content.

Mike McQuary’s low-speed electric vehicle (RETV) got a nice workout after the event. Attendees could stand in line and take it for a spin around the block. Good stuff!

The Cleantech panel was outstanding. From left to right:

• Mike Eckert, former CEO of The Weather Channel and now an Entrepreneur-in-Residence with the ATDC moderated the panel
• John Baumstark, CEO, Suniva
• Mike McQuary, CEO, RETV
• Jeff Foote, Coca Cola Company
• Tom Johnson, Southern Company
• Dan Gordon, Valhalla Partners
• Dave Conlon, Hardin Construction

The yearly ATDC entrepreneur showcase event was aksi off the hook. There was a ton of energy there, and I think the portfolio companies got a great deal of pub out of it. We’ll be posting a podcast of the event over at StartupLounge.com soon.

Looking down into the main ballroom, shortly after the event opened.

The ATDC and VentureLab companies were all set up showing off their stuff.

A cool (sort of) shot from behind the podcast setup.

Today is Startup Riot. And wouldn’t you know it – I’m sick :( Trying to get better before our Capital Lounge event on Wednesday … now where did I put that vitamin C …

Cheers.