I don’t have the patent on the prevailing opinion about local VC community. The opinions and frustrations are real and they’re not something that we should just ignore. There are pretty big problems with the local startup community. Here’s what I think are some of them:
* Local VC money is mostly non-existant. It’s a supply-demand problem essentially. Low supply of great startups and some big hits, very little demand. (Note: I didn’t say lack of money)
* The local community is a relationship-based economy. It’s who you know … The ‘ole boy network. The valley is a meritocracy.
* We have no real track record of big successes we can tout. OK, let’s stop using ISS, JBoss and Mindspring. JBoss didn’t raise any local money, ISS was started over 12 years ago and most young people have never heard of Mindspring
* What few winners we’ve had, they don’t feel compelled (or even obliged) to re-invest / give-back to the local community
Local Investors
We don’t have any real early stage venture investors in Atlanta. OK, investors, go ahead and get pissed and stop reading if you’d like. But, it’s the honest truth. Noro-Moseley is one of the largest and oldest firms in Atlanta. They have some good guys there (Greg Foster has recently joined and he seems like a great guy) like Alan Taetle. However, I’m sorry to say this, these guys aren’t early stage guys. They don’t understand early stage. Period. That’s not to say they haven’t made early stage investments - they have. For example, Clearleap. They invested along side Trinity. Trinity is a great Valley firm. We spent time with them. But here’s the rub. Noro probably wouldn’t have done the deal alone, nor would they have done the deal if it was 3 guys just out of GA tech with no experience (in fact, the founders are ex-N2Broadband guys who had a good exit).
Despite what Alan said in a comment on Lance’s blog, Noro had the opportunity to do the Appcelerator deal - 100% as the only lead investor - on a silver platter. Alan and Greg know that - even though they’ll try and say they didn’t, publicly. But the true story is that I gave Alan one week to put a term sheet on the table; he had a told me and several others many times he would. In fact, Alan told several people around town that they wouldn’t lose the Appcelerator deal even before we had decided to raise a round. I’ve known Alan for a long time and I’d like to think of him as a friend - so I know he’ll be pissed at me for putting this out there.
This Jeff Haynie/Appcelerator thing just keeps getting juicier and juicier! Now Jeff sounds off about it.
