The Blakeroom

Each year TAG showcases Georgia’s Top 40 Innovative Technology Companies and gives the Top 10 the opportunity to showcase their company at the Georgia Technology Summit.

If you are an innovative technology company and you didn’t apply – you should next year.  As an entrepreneur, I know all to well it often feels you spend more time ‘pitching’ your company than building it.  So why should you apply for the Top 40?  The main reason to participate is these events help the local startup community by highlighting the innovative technology companies in Georgia.  This helps attract more investment and talent to the area.  However, the event is also a great opportunity to create awareness and recognition for your company.  Being selected is something your team can celebrate. If you are a candidate for the Top 10 you’ll be invited in to meet with the selection committee.  Regardless of the outcome, you’ll get valuable feedback and contacts with people that can help you grow your business.  If you are chosen, you’ll get to share your innovation with over 1000 people in the technology community.

This year I had the opportunity to sit on the ‘other side of the table’ as a member of the selection committee.  In addition to getting to see so many really cool companies – I learned a lot in the process.  Now that the selection is complete, I thought I’d share some of what I learned to help companies applying in the future – and many of the lessons apply to other similar competitions.  Here are 5 tips I learned:

1.  Submit Early

Believe it or not, every member of the selection committee reviews every bit of that information you submit.  They also meet and discuss each and every applicant as a group.  Applicants are initially sorted into ‘Yes’, ‘No’, or ‘Maybe’.  By the end of the process, I noticed the group getting more selective as we compared applicants against the dozens of innovative companies we had already reviewed.  It’s easier to make it to the short list if you submit your application early.

2.  A Page Full of Buzzwords Won’t Work

I have no doubt that some of the most innovative companies that applied won’t make the list.  Why?  Because nobody understood what they did or why they were innovative!  Several applications were long on marketing gobbledygook, but short on clear descriptions.  Some of the committee discussions were dominated by trying to figure out what the company did – or worse – complete silence.  Sometimes we even pulled up the company website to try to figure it out.   Other times a member of the committee knew the company and was able to ‘fill in the blanks’ for the rest of us.  If the selection committee doesn’t understand what you do then it doesn’t matter how innovative or successful you are – you won’t make the list.

3.  Don’t Use Your Standard Pitch

With the almost obsessive focus the startup community has on pitch events, it’s no wonder most companies that are invited in to present to the selection committee come armed with their standard pitch deck.  Don’t do that.  This is an innovation contest – not a startup event.   The most compelling companies used their 3 minutes to talk about the problem they are solving, their solution, and most importantly – what makes them innovative and why it’s hard to do.  The winning presentations were given as if they already won.  That means telling your story in a way that will resonate in a room with 1000 people – and having slides that can be read in the back of that room.

4.  Size Matters Less Than Success

There’s a lot of ‘gee-whiz’ cool technology in Georgia.  The selection committee is looking for the innovative companies that are – or are going to be – a big success.  Highlight evidence of that success and future potential by talking about the market opportunity, customer wins, growth to date, or other signs of traction.   The  Top 40 included companies of all sizes from seed stage to Fortune 500.

5.  Repeat Winners

Whether you’ve applied and been selected in the past – or not – doesn’t matter.  However, if you’ve been a Top 40 company in the past, you need to highlight progress or new innovation to be selected again.

Next time your company applies for Georgia’s Top 40 Innovative Companies or other similar contests, keep these tips in mind.  I really enjoyed being a member of the selection committee.  We may not be Silicon Valley – but Georgia is an innovation hotbed and it was inspiring to see so many awesome companies and ideas.  So who are the Top 40 innovators?  Sorry – I can’t spill the beans.  TAG will announce the winners at the Georgia Technology Summit on March 28th at the Cobb Galleria Center.

Last night I attended the final Flashpoint GT practice session before kicking off Demo Days next week at GTRI.  Later in the month, Union Square Ventures and Andreessen Horowitz will host Flashpoint demo days.

I’ve sat through countless pitches since starting as an EIR at ATDC four months ago.  Last night I had a chance to simply be an observer.  So rather than focus on what I thought about the pitches – I focused on listening to the feedback the mentors were giving them.

Flashpoint has assembled a talented and experienced group of mentors. The feedback was excellent – deeper than the typical “too many words” or “wrong font size” (not that those aren’t important).

Here are a few takeaways from the feedback the mentors gave the presenting companies:

• Get the audience into your story early.  Don’t just tell them what you do – tell them why.  Allen Nance told one of the companies “a good presentation is all about getting the audience to believe the problem”.   That is awesome advice.  If potential investors believe you are solving a problem that keeps customers awake at night – you are half-way there.
• Don’t just talk about features and capabilities – talk about how your solution solves the problem.
• A theme that resonated with mentors for software companies was talking about how they automated or digitized something manual.
• Show real examples.  Real customer examples are more powerful than hypotheticals.
• Spend $ to differentiate the presentation.  If you are going to have slides, they need to support what you are saying, not detract from it.  Professional looking presentations with clean graphics were more memorable and effective.  On the logo page, have a tagline that says what you do.
• The mentors wanted to hear more about the business and pricing models than revenue forecasts.

Last month ATDC announced a new ATDC Select membership level and I’ve started to get questions and comments about what it means.  Before proceeding I should add that my thoughts in this blog are my views and opinions, not necessarily those of ATDC!

ATDC has gone through a lot of changes in the past 2 years.  It has grown from 40 companies to more than 500 early stage companies ranging from concept stage to venture-funded and revenue generating companies.  While that is unquestionably great for the Georgia economy and technology community, it has also been a challenge for ATDC to try to provide support to that many companies without diluting what has made it a leading accelerator for the past 30+ years.

The ATDC Select membership group is new, but it is actually what much of the technology community already knows ATDC to be – an incubator that Forbes magazine recognized as one of the top 10 incubators in the world.  The ATDC accelerator has helped launch over 100 successful companies that have raised over $1 billion in outside financing.  The companies residing in the incubator have raised over $40 million this year alone.

The way I see it – the ‘Select’ membership isn’t what’s new – it’s the focus on developing scalable programs for the open membership that was launched 2 years ago that is new.

Some will insist a largely taxpayer funded organization should provide ‘equal access to all’ and the Select program is exclusionary.  I disagree.

The over riding mission of ATDC is economic development.  A few years ago the US Department of Commerce’s Economic Development Administration released a report stating that incubators are an effective and efficient way of creating jobs.  The study found incubators are “More effective than roads and bridges, industrial parks, commercial buildings, and sewer and water projects.”  In fact, incubators provide up to 20 times more jobs than local infrastructure projects at 1/20^th of the cost!

But that is only true if the incubator is able to provide the coaching, services, and space that make a difference in the success of the start-ups they are supporting.  ATDC has limited resources – money, space, and team members.  The best use of those taxpayer funded resources is to apply them to the technology start-ups that are poised for rapid growth and can most benefit from the support, and build programs to help the broader start-up community get to that point.

That does not mean ATDC is trying to ‘pick the winners’ – anymore than an advanced class in a public school is picking the students most likely to succeed.  ATDC will evaluate companies for the Select program by looking at the team, the technology, the market, and most importantly the ‘fit’.  Since these are often new technologies and new markets, it’s a highly subjective and in-exact science.  ATDC helps companies grow rapidly and ‘graduates’ them when they are sustainable companies.  If ATDC team members don’t think they can help them get to the point they are fundable and sustainable, they can’t help them succeed.

This also doesn’t mean that ATDC won’t continue to focus on the open membership companies.  Quite the contrary.  The broad technology community will find no bigger champions than Stephen Flemming, the VP of the Enterprise Innovation Institute that oversees ATDC and Nina Sawzuck, the GM of ATDC.  Stephen championed the effort to open up ATDC membership two years ago – and he remains committed to serving the broader community.

ATDC will continue to develop programming, coaching, and networking opportunities for all ATDC members.  The hope is many of them will progress to becoming ATDC Select Members.  The goal for both groups is the same – coaching, connecting, and community for Georgia’s technology entrepreneurs.

The new ‘Select’ membership group will launch on January 3rd, 2012.  I think it’s a great move.  Will there be start-ups that could benefit from ATDC and are qualified to be part of the Select group that don’t get in?  You bet.  I’m sure ATDC will be looking for ways to increase it’s resources to expand the program to serve more companies.  But for the companies that are chosen for the Select program, ATDC will be able to provide the customized level of support to help them succeed.  More success stories are good for Georgia’s economy.  More successes will attract more venture investment in Atlanta, create more jobs, grow the local talent supply, and benefit the entire technology community.  The Select designation will differentiate those companies and signal to partners and the investment community that those companies are getting help and mentoring that will help them succeed.

The initial ATDC Select companies I’ll be supporting are Brightwhistle, Digital Assent, PlayOn Sports, Provider Web Capital, SecureHealthPay, Simple C, and Soneter.  All great companies with terrific CEOs – I look forward to working more closely with them.

Kudos to Stephen and Nina for making this happen.

In last week’s post I took a look at data from the PWC MoneyTree Report to answer the question “does Georgia have a venture funding shortage?”.  The data supported what I keep hearing from Atlanta entrepreneurs – we have a venture funding shortage, especially seed funding.  This is to difficult to digest while reading stories that other areas are experiencing a ‘bubble’ in early stage funding.

Adding to the shortage is the fact that two sources of local seed funding have recently stopped making new investments. Imlay Investments, the most active seed stage fund in Georgia in the last decade, made their last new investment last year and are now focused on their 37 active portfolio companies.  The Georgia legislature stopped funding the ATDC Seed Fund several years ago and “reallocated” $5 million in previously allocated funds, essentially halting new investments.

Since writing the Does Georgia Have a Venture Funding Shortage post, the Atlanta Business Chronicle published an article stating the General Assembly is expected to take up a proposal this winter to establish the Georgia Venture Capital Program establishing a $180 million fund that would follow a fund-of-funds model that has been successful in other states like North Carolina and Texas.

I hope this happens.  It seems to have strong support and the right mix of legislators and leaders in the technology community supporting it.  I also hope a meaningful portion of that $180 million is directed to a privately managed seed fund (or funds) to help more seed stage companies succeed.  It’s the first step in any plan.

In order to accomplish one of the goals mentioned in the article of “serving as a financial magnet” to attract out of state funds to have a presence and invest in Georgia, we’ll need to increase the deal flow of quality companies.  To have more quality early stage, expansion stage, and later stage companies for VCs and private equity firms to invest in, we first have to address the ‘top of the funnel’ by starting with supporting more (ambitious) seed stage companies.

What else can we (Georgia, technology community, ATDC) do to increase access to funding and grow more companies pursuing ‘big ideas’?

I attended Venture Atlanta last week – the largest annual start-up technology conference in Atlanta.  The event filled the Oceans Ballroom at the Georgia Aquarium, an appropriate setting for start-ups looking to ‘swim with the sharks’.  Founders of healthcare IT, software, fintech, and digital media companies seeking funding gave 6-minute pitches hoping to attract funding from the investors in the audience.

I wasn’t able to attend last year, but compared to two years ago the event was a big step up.   Kudos to the VA 2011 team.  The companies received countless hours of coaching leading up the event – and it showed in the quality of the presentations.  I don’t have exact numbers – but there were easily over 500 attendees and hundreds of venture capitalists and angel investors.  The large number from outside Georgia including tech hubs Silicon Valley and Boston was encouraging.  The biggest change was the event added a second day focused on earlier stage ventures seeking seed financing or series A financing.

ATDC’s impact on the start-up community was evident.  I was proud to see 13 of the 20 early stage companies presenting were ATDC Companies.  At least a third of the later stage ventures were ATDC Companies or recent graduates as well.

Jesse Dwyer of TechDrawl described the atmosphere at Venture Atlanta as “high-brow, high-tech, more regimented and community celebratory”.  Investors I talked to from out of town consistently shared two observations about Atlanta’s technology community:

There is a sense of energy and support for Atlanta’s technology entrepreneurs.  

The number of organizations and volunteer assistance available to Atlanta start-ups is incredible.  This ‘eco-system’ is helping to fuel the start-up community.  We have ATDC, a technology accelerator at Georgia Tech, Flashpoint, Start-Up Chicks, TAG, and numerous other for profit and not for profit organizations providing invaluable assistance to our local start-ups.  Previously fragmented organizations and local venture capitalists are starting to work together and that is part of what created the ‘celebratory’ atmosphere Jesse Dwyer referenced.

Atlanta start-ups seeking funding are farther along than start-ups you’d see at similar events in other parts of the country.

Ryan Gembala of Azure Capital, a Silicon Valley venture firm, commented that Atlanta start-ups find revenue earlier in their life cycle as a funding source in light of the undercapitalized market.  That works well for many internet capital light ventures, but is more difficult for ‘big ideas’ and deep science or technology start-ups.

You couldn’t help but come away excited about Atlanta’s start-up technology community.  John Yates of Morris, Manning & Martin put together a great video that was shown at Venture Atlanta capturing the ‘celebratory’ atmosphere of the technology community.  The video featured tech leaders in the Atlanta Community discussing the history of Atlanta’s technology start-up growth.  Click Here to view it.