September 9, 2011 by
kateTo help educate young startups on fundraising strategies, the Atlanta Technology Angels and the Advanced Technology Development Center have joined forces to launch a new ATA/ATDC Entrepreneur Finance Series. Developed by Michel Horten, director of “ATA University” (ATA’s education arm), the comprehensive course encompasses four sessions and will be hosted by ATDC as part of its new Lunch and Learn Educational Series, which takes a more strategic approach to brown bags by focusing on coaching.
As a member of the Atlanta Technology Angels, Horten knows a thing or two about the proper way to court an investor. Over the years, he has been on the receiving end of numerous fundraising pitches from young startups. In many of those cases, a lack of entrepreneurial experience and knowledge of the current early-stage capital market sank even the most attractive investment opportunities.
“Companies generally require one or several rounds of financings in order to succeed. Unfortunately, a lot of entrepreneurs fail in this endeavor, not because their company is not fundable, but because they’re approaching it in the wrong way,” said Horten, a local attorney. “For example, if I’m interested in an opportunity, the first thing I want to know is what I’ll get for my money. Half of the entrepreneurs can’t answer that question.”
Each of the four sessions is designed to be highly interactive, with tips on all of the finance, legal and tax issues that an entrepreneur will need to know to launch a successful capital raise. Topics include the angel financing process, pre-financing requirements, today’s deal terms and securities law compliance.
“The whole purpose of this program is to give young entrepreneurs the A to Z summary of how they should go about raising money,” said Horten. “You don’t really have a second opportunity to pitch the same angel, so this course could help improve a startup’s chances of walking away from a meeting with a check in hand.”
Registration is now open for the free series, which begins Sept. 22. Each session will be held from 11:45 a.m. to 1 p.m. in the Hodges Room on the third floor of ATDC’s headquarters. Based on member interest and turnout, the program could be repeated in the future.
Participants who complete the first two sessions will also receive an invitation to attend a Nov. 10 seminar the Angel Capital Education Foundation is presenting to ATA members and other local angels. The half-day presentation will provide a detailed look at the various methodologies used to value early-stage companies and will give attending entrepreneurs the opportunity to network with local angel investors.
At its most basic, these are the three things that any investor wants to get answered before they will consider investing in your enterprise. Unfortunately, most entrepreneurs only address one of them.
Why this?
This is what most entrepreneurs focus on. Their idea. The product. The business plan. The marketing strategy. The sales channel. Manufacturing. Pricing. The website. The blog. Social media. Intellectual property protection. All critical things. And must be done right. But most people understand that, so let’s move on.
Why now?
Timing is everything. Are you the first player in an unproven market? Are you the last entrant in a crowded market with an undifferentiated solution? Being too early is just as bad as being too late. Is the market truly ready for your solution? How can you prove it? As they say, “you can’t time timing.”
Why you?
This my be the single most important piece of the puzzle. Why are you and your team the right group to pull off this business? Just because you thought of the idea, or are passionate about it is not enough. Do you have the ability to design the product, build the product, sell the product? Do you have domain experience in the market you’re going after? Can you be trusted with someone else’s money? Do you know what it really takes to run a startup company?
Think through these questions from an investor’s point of view. Make sure you are just as compelling on the timing and the team as you are on the product, and maybe you will be attractive to outside capital.
Band Metrics announces today that it has received an investment from the Georgia Tech Edison Fund, an early-stage technology fund managed by ATDC.
“We’re thrilled about the investment and grateful to the ATDC, as the investment will assist us in completing our initial product offering for our public beta release later this year, and continued development in 2010,” stated Duncan Freeman, Founder and President of Band Metrics. “Additionally, we could not have asked for a better investment partner, as the ATDC, one of the nation’s leading university-based technology accelerators is committed to Atltlanta’s thriving technology community, and helping startups become successful companies.”
SkyBlox a Wi-Fi platform that provides retail businesses Wi-Fi access services coupled with an advertising tool to drive sales announced the closing of an angel round of funding. The funding came from SGIO, a private equity firm out of Florida that specializes in early stage technology companies made the investment. While the total amount of investment was undisclosed, a $1 the first $100,000 allocation was sent via Twitpay.
Founded in 2008 by a group of EarthLink’s former muni wi-fi team, SkyBlox is Atlanta’s leading application for neighborhood wireless networks and the source for real time information about those neighborhoods. Skyblox has expanded and now offers service in Austin, Chicago, and Denver. With the recent funding to build out the SkyBlox platform you may see them in your city soon.
That’s one of the essential questions we help you answer in our upcoming educational program CapVenture. CapVenture is a six week long, boot camp that will educate and equip early stage CEOs and executives to better manage and fund their business.
If you’re actively seeking funding or ever expect to, this is an essential program for you. You’ll get a inside look at the minds of venture capitalists and angel investors with an experienced team of investors, CEOs and industry executives. You will create a fundraising strategy, practice and sharpen your investor pitch, and at the end of the program, give your pitch in front of a room full of investors.
But CapVenture is not solely focused on fundraising. For entrepreneurs not looking to raise capital, CapVenture offers a unique opportunity to develop their business model, sharpen their go-to-market strategy, and enhance their network by sharing with and learning from a room full of CEOs, executives and investors.
We are still accepting applications to CapVenture through July 15th. So, if you’re interested, or know someone who might be, fill out an application.
If you have not seen the news from The Atlanta Business Chronicle or TechJournal South, 2080 Media (aka PlayOn Sports) has raised $3 million in a round led by Imlay Investments with Noro-Mosely Partners participating. What you may not have heard is that ATDC Entrepreneur in Residence MIke Eckert is going to be joining PlayOn's board along with Greg Foster of NMP. What I know that you have not heard is that the company joined ATDC last week.
PlayOn is a digital media company providing an end-to-end solution for the production, management, and distribution of professional quality TV-like live events over the Internet at a fraction of the cost of traditional television. Led by David Rudolph, the company is technology and asset spin out from Turner Broadcasting. More then four years has been spent testing and perfecting the PlayOn platform.
PlayOn's initial market focus will be on sports content. The company has seen demand from organizations such as universities, high schools, and leagues to generate media exposure for their sports and programs. Aside from the direct financial benefit the exposure provides, it also has a positive effect on recruiting, alumni cultivation, and general awareness. Media entities have also desire the exclusive sports content that PlayOn enables them to create and distribute.
PlayOn is shooting for the big space between user generated content at YouTube quality and what you see on ESPN every day. Should be an exciting to watch the game unfold.
ATDC’s comprehensive fundraising bootcamp, CapVenture, kicked off last week with wise words from people you want to know. The opening session, "Understanding Investors", was led by Jeff Leavitt and included a panel of the biggest investors in town. With industry leaders such as Brendan Mcguire of RBC, Greg Foster of Noro Moseley, Sig Mosley of Imlay Investments, and Fred Sturgis of H.I.G., participating in a panel kicking off the program, CapVenture promises to be worth the effort. During the session, the panel stressed the value of knowing how and – most importantly – when you approach both angel and VC investors.
The 15 technology companies chosen for CapVenture will refine their business and funding strategy, sharpen their fundraising pitch, and participate in events like last week’s session. This year’s group of companies includes: Arterain Medical, Cloud Sherpas, Event Seek, GadZeus, Gotham PC, InterCAX, LocalPrice, ProperNotice, Purewire, Queuent, Radiance Energies, Renovo Data, Servinity, and WORKbits. We intend to make some of the materials that the companies use during the program available online for the broader startup community.
Last year, five of the fifteen CapVenture companies received funding. It will be interesting to see if this bunch can top that. The program cumulates with the opportunity to meet angel and venture investors at the Program Celebration and Venture Forum on October 7th.
The good folks over at StartupLounge recently had Sig Mosley and Charlie Paparelli,
two of the cornerstones of Atlanta angel investing on the show. One
(and there are many others) of my key takeaways from the chatter that
has been happening over the past week or so, is that there is an
opportunity to increase the knowledge that entrepreneurs have about the
fund raising process. A good place to start is to listen to this podcast. Money quote:
"I
spend very little time looking at the numbers. I don’t believe any
numbers that any entrepreneur puts in front of me. I am an accountant,
you just tell me what you want the numbers to be and I will make them
that way." Sig Mosley
While listening to angels
being interviewed is great, the best way to learn about the angel
investing process is to go talk with some angels. You can do that at
the CapitalLounge
events, the next one quickly approaching on August 27. And rumor has
it that Michael and Scott are going to announce an exciting new program
that will enable entrepreneurs to get their business in front of a lot
of angels.
(Cross posted on FoG)
Charlie Paparelli drew a huge huge crowd recently at ATDC where he spoke on how to get to a second investor meeting. Charlie entertained and spoke plainly about the most critical aspects to building a successful and fundable business. Charlie also shared his deep passion for entrepreneurship, quoting Shakespeare "to thine own self be-true." He shared how Richard Brock brought him out of the boring world of being a CPA doing paid management work to his true passion of entrepreneurship. He encouraged all entrepreneurs in the group and applauded their efforts.
The #1 hot tip was in Charlies’s own words, I’m asking myself during that first meeting "Do I think he can do it?" In other words, you’re selling yourself. You’re selling investors the confidence you can pull it off. In addition to selling yourself have have to prepare to sell the opportunity, the business and the team.
Charlie shared a simple but important two by two. On the vertical was the "fog factor", defined as the uncertainly of your market and its adoption. The horizontal was time to money. Getting a referenceable customer is one of the surest ways to reduce your company’s fog factor when trying to get an investor on board. And of course, a paying customer who demonstrates your early business model does not hurt your ability to show you can make an investor money. His second major hot tip – People and Market Focus reduce time to investment.
Charlie also emphasized the importance of qualifying prospective investors. He noted that the best salespeople are also the best qualifiers. Their time is their most valuable treasure and raising money is a sales process. How do you qualify and how do you get to investors? First of all, you need to know the market of investors. On the one spectrum are the friends and family and wealthy individuals, what he calls the ignorant and the uninformed. On the other are the informed and experienced, the VC. If you’re qualified to get VC money, you’re pursuing a small piece of a very large pie vs. on the other spectrum, likely to keep a larger piece of a small pie.
Charlie was adamant that investors do not respond to cold-calls, and they don’t. He shared a chart of all the key organizations and people that should connect you to investors if you have the right value-add partners. These include lawyers and other expert professionals. And of course, Charlie kindly and rightly put ATDC on his chart – thanks Charlie – I just happened to set up 5 investor meetings with Seven Rosen funds last week.
Charlie is a great contributor to our community. He tells informative stories and makes them fun. Despite some of these businesses being "boring" as your sales tax company they sure are wildly successful.
ATDC is looking for a great group of young, early stage companies who can benefit from our fundraising bootcamp program, CapVenture. CapVenture’s focus is on helping companies to improve their fundraising preparation and odds of success (33% of 2007 participants raised money). CapVenture helps entrepreneurs sharpen their strategy, raise their profile and significantly accelerate their network to reach investors. The program is taught by ATDC’s staff but really shines because of all-star set of volunteer serial entrepreneur coaches who are dedicated to support two companies each throughout the program.
The seven week program meets weekly starting August 19th and finishing October 7th with a forum co-hosted by Atlanta Technology Angels. The best CapVenture companies will also have the opportunity to join ATDC in our participation in Venture Atlanta on October 15th. All applicants to CapVenture will be invited to an investor panel to be held on August 19th.
The deadline of July 15th is rapidly approaching. You can apply here.
Todd Merrill of Global Crypto and I recently went on the StartupLounge to talk a bit about CapVenture. It is a good listen.