Come back when you've got some traction.

Jello wrote:

this is the only thing you will ever hear in Atlanta while seeking funding for your startup.

There is no such thing as pre-revenue funding in this town. Accept it and adjust, or move.

Period.

This is consistent with the Paul Graham essay from last month:

Instead of going to venture capitalists with a business plan and trying to convince them to fund it, you can get a product launched on a few tens of thousands of dollars of seed money from us or your uncle, and approach them with a working company instead of a plan for one. Then instead of having to seem smooth and confident, you can just point them to Alexa.

...

If startups are mobile, the best local talent will go to the real Silicon Valley, and all they'll get at the local one will be the people who didn't have the energy to move.

This is not a nationalistic idea, incidentally. It's cities that compete, not countries. Atlanta is just as hosed as Munich.

noteworthy wrote:

Come back when you've got some traction.

Jello wrote:

this is the only thing you will ever hear in Atlanta while seeking funding for your startup.

There is no such thing as pre-revenue funding in this town. Accept it and adjust, or move.

Period.

This is consistent with the Paul Graham essay from last month:

Instead of going to venture capitalists with a business plan and trying to convince them to fund it, you can get a product launched on a few tens of thousands of dollars of seed money from us or your uncle, and approach them with a working company instead of a plan for one. Then instead of having to seem smooth and confident, you can just point them to Alexa.

...

If startups are mobile, the best local talent will go to the real Silicon Valley, and all they'll get at the local one will be the people who didn't have the energy to move.

This is not a nationalistic idea, incidentally. It's cities that compete, not countries. Atlanta is just as hosed as Munich.

Except in Atlanta $10K and a working company gets you shit. You need large amounts of revenue, too.

But... that being the case, you can get money anywhere. So, why would you even take money from Atlantans who ignored you before you had a million in revenue?

Jello wrote:

Come back when you've got some traction.

Yeah, this makes sense, eh? As soon as I remove all risk, I'll put on my extra large knee pads and pucker up. Okay, a bit graphic, ignore the visual in your head right now. The real point I'm making is you should never put yourself in a position where you hear this. If you go to a firm which doesn't do seed/early stage, you will get something that is close to this phrase. The VC shouldn't have taken the meeting in the first place but since they did, you should at least know and all agree it is a conversation to establish a dialog for a future transaction when the company is more mature and looking for growth/expansion capital. If you are seed/early stage VC and you say this to an early stage/seed company, uh, please don't.

With the exception of a very small group of individuals you probably don't know (who want to start companies in specific areas and then take such an active role in funding companies they are basically founders as well as angels), or if you are out of Georgia Tech's Venture Labs, or if you are lucky enough to be one of a couple companies a year funded by the angel local groups... this is the only thing you will ever hear in Atlanta while seeking funding for your startup.

There is no such thing as pre-revenue funding in this town. Accept it and adjust, or move.

Period.

One of the guys who led one of the round tables at the ATDC one week said the key to getting investment was to build your business to $1 million a year in revenue, and then someone would find you. I thought he was a major dick. But he was just telling the blunt truth.

If you are a business seeking funding in Georgia, you need to generate $1 million in revenue to do so.

This isn't just an ATL phenomenon. Most VC's have left "early stage" and are basically just acting as mezzanine or private equity hedge funds. Most seem to want to target companies that are EBITDA positive by the time the deal closes, which to me isn't "early stage". I think it goes without say that they have no adjusted their equity position preferences or deal preferences despite coming in later on the risk curve. =(

flynn23 wrote:

Jello wrote:

Come back when you've got some traction.

Yeah, this makes sense, eh? As soon as I remove all risk, I'll put on my extra large knee pads and pucker up. Okay, a bit graphic, ignore the visual in your head right now. The real point I'm making is you should never put yourself in a position where you hear this. If you go to a firm which doesn't do seed/early stage, you will get something that is close to this phrase. The VC shouldn't have taken the meeting in the first place but since they did, you should at least know and all agree it is a conversation to establish a dialog for a future transaction when the company is more mature and looking for growth/expansion capital. If you are seed/early stage VC and you say this to an early stage/seed company, uh, please don't.

With the exception of a very small group of individuals you probably don't know (who want to start companies in specific areas and then take such an active role in funding companies they are basically founders as well as angels), or if you are out of Georgia Tech's Venture Labs, or if you are lucky enough to be one of a couple companies a year funded by the angel local groups... this is the only thing you will ever hear in Atlanta while seeking funding for your startup.

There is no such thing as pre-revenue funding in this town. Accept it and adjust, or move.

Period.

One of the guys who led one of the round tables at the ATDC one week said the key to getting investment was to build your business to $1 million a year in revenue, and then someone would find you. I thought he was a major dick. But he was just telling the blunt truth.

If you are a business seeking funding in Georgia, you need to generate $1 million in revenue to do so.

This isn't just an ATL phenomenon. Most VC's have left "early stage" and are basically just acting as mezzanine or private equity hedge funds. Most seem to want to target companies that are EBITDA positive by the time the deal closes, which to me isn't "early stage". I think it goes without say that they have no adjusted their equity position preferences or deal preferences despite coming in later on the risk curve. =(

VCs have left, but in other places farther west, individuals have filled this gap.

Jello wrote:

flynn23 wrote:

Jello wrote:

Come back when you've got some traction.

Yeah, this makes sense, eh? As soon as I remove all risk, I'll put on my extra large knee pads and pucker up. Okay, a bit graphic, ignore the visual in your head right now. The real point I'm making is you should never put yourself in a position where you hear this. If you go to a firm which doesn't do seed/early stage, you will get something that is close to this phrase. The VC shouldn't have taken the meeting in the first place but since they did, you should at least know and all agree it is a conversation to establish a dialog for a future transaction when the company is more mature and looking for growth/expansion capital. If you are seed/early stage VC and you say this to an early stage/seed company, uh, please don't.

With the exception of a very small group of individuals you probably don't know (who want to start companies in specific areas and then take such an active role in funding companies they are basically founders as well as angels), or if you are out of Georgia Tech's Venture Labs, or if you are lucky enough to be one of a couple companies a year funded by the angel local groups... this is the only thing you will ever hear in Atlanta while seeking funding for your startup.

There is no such thing as pre-revenue funding in this town. Accept it and adjust, or move.

Period.

One of the guys who led one of the round tables at the ATDC one week said the key to getting investment was to build your business to $1 million a year in revenue, and then someone would find you. I thought he was a major dick. But he was just telling the blunt truth.

If you are a business seeking funding in Georgia, you need to generate $1 million in revenue to do so.

This isn't just an ATL phenomenon. Most VC's have left "early stage" and are basically just acting as mezzanine or private equity hedge funds. Most seem to want to target companies that are EBITDA positive by the time the deal closes, which to me isn't "early stage". I think it goes without say that they have no adjusted their equity position preferences or deal preferences despite coming in later on the risk curve. =(

VCs have left, but in other places farther west, individuals have filled this gap.

I think that's true most everywhere. Angels have filled that gap, but it's hard for a company to raise more than $2M on the backs of angels, so there's a pretty large gap between $1M and about $5M where institutional investors fear to tread. I know this because this is the range that I am currently trying to fill. =)