An Atlanta perspective on startups

Jeff haynie of appcelerator is frustrated with atlanta and is moving to mountain view. In his compelling analysis he basically states that the VC community in atl isnt very startup centric or focused or even understanding of the entrepreneurial startup life and challenges. I commend him for doing something about it and moving. His org is an open source platform for building rich web apps and has thousands of developers who are making contributions on a regular basis. It appears that there is an aversion to risk and that many VC's want to see more revenues and sustainability bf committing funds to a company. I dont blame them and if that is their calling then stick with it. Jeff complains that there arent any real early stage funds in atl that are helping incubate new ideas/concepts/ and companies. I mean this is extremely risky money...BUT it is needed to help build the right entrepreneurial community.

His solution is to have a fund that invests in a bunch of smaller deals aka a micro VC. perhaps it is a cultural thing where only the big markets ie silicon valley/boston/ny can support, as there arent enough small deals to support...something that memphis can relate to as well. i do like his suggestions on how to help the situation which of course wont happen overnight:

--build a better base of entrepreneurs/angels/risk capital

--deals will fail, but encourage those same people to try again and not give up

--build an ecosystem around startups ie all those community centric events ie startup weekend, barcamp, investment forums, user group forums, etc

--entrepreneurs must give back--via checks and mentoring. think boulder where they have an org where startups give back a percentage of profits...after a liquidity event

-cultural shift---a better corporate acquisition mentality

Take a look at his blog introspection on what the issues are, as i think that many cities can probably relate to this and assess how to improve their own environments.

Comments

[Dave Barger]

I strongly concur with the ecosystem point. I'd believe this to be true for the entrepreneur, and also as an admirable quality to investors when evaluating an idea and the person behind it.

[Spencer]

There are two things in here that I think are dead on:
1. VC's aren't going to do it for us. They just can't get enough return on small deals to make it worth it, and the risk is too high.
2. We need people to succeed then give back to help others get there.