Boston Venture Investors Attracted to Atlanta

By John C. Yates

When you’re fishing, you gravitate to the part of the lake where the fish are biting. That’s one reason Boston venture capitalists are drawn to Atlanta. Boston has one of the largest concentrations of venture capital in the world – and Atlanta has some of the most skilled and innovative tech companies in the country, who are hungry for the funds to help them grow.

I visited Boston’s venture community recently to invite several top VCs to attend a Braves v. Red Sox World Series game in Atlanta (hopefully this year!). I also wanted to assess our city’s attractiveness to New England investors and encourage participation in Venture Atlanta, our VC conference on October 22-23. The venture capitalists confirmed that Atlanta has unique attributes to accelerate our ascension from being the Southeastern tech capital to becoming a global tech leader.

1. Favorable Environment – In the entrepreneurial pond, the Southeast is the venue of choice for many New England investors. Fewer VCs chasing a deal generally means better (and lower) valuations and greater returns for the venture fund. Of course, as more VCs start fishing in Atlanta, competition will increase — for now, our city is seen as an underserved bright spot for venture investing.

2. Serial Entrepreneurs – Every Boston venture capitalist mentioned Atlanta’s experienced executives and the importance of continuing to attract talent to our community. They also noted the successful emergence of serial entrepreneurs – Atlanta tech leaders who start, sell and then re-start successful companies. This trend is seen as a new chapter in our maturity from a regional to a national tech center.

3. CEO “Alumni” Network – A common theme was the importance of Atlanta CEOs in referring deals to Boston VCs. Many funds noted their best source of Atlanta leads came from the CEOs of portfolio companies. They also stressed the importance of Atlanta supporting an effective communication network to allow VCs to see the best deals. Through the combined efforts of the Metro Atlanta Chamber, Technology Association of Georgia and Atlanta Technology Angels, our city is seen as having a coordinated means of communicating the benefits of investment in Atlanta’s entrepreneurial startups.

4. Customer Acquisition – Several venture investors made an interesting observation — Atlanta companies seem to be focused on the right target. They are pursuing customers rather than furiously chasing venture capital. Many of our city’s startups have spent their time attracting real customers and generating initial revenue to fund growth. This may be the result of an inability to find venture capital quickly – and it’s also a positive result of the work done by our business community in supporting entrepreneurial endeavors.

5. Southern Hospitality – Every Boston venture fund mentioned the kindness and hospitality they receive from the Atlanta community. Although incapable of precise measurement, southern hospitality matters; it provides an incentive for funds to come south to our city (especially during the winter months).

As I shared with the Boston VCs, y’all are always welcome in Atlanta – and bring your checkbooks!

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John C. Yates is the chair of the Technology Group at Morris, Manning & Martin, LLP and co-chair of the Metro Atlanta Chamber’s Technology Council.

Posted with permission from the Atlanta Business Chronicle