State of Startup Investing In Atlanta: Event Recap

To kick off the conference season, Venture Atlanta hosted an insightful Atlanta venture capital event called “State of Startup Investing in Atlanta.” This event brought together industry leaders, venture capitalists, and startup founders to discuss the current landscape and prospects of startup investing in the region.

Thanks again to Invesco, the title sponsor of Venture Atlanta, for sponsoring such a wonderful event! Not only did they offer their beautiful headquarters for the event, but they also provided OrionStar robots (which you’ll see more of at VA) and a wonderful opening remark from Marty Flanagan, Chairman Emeritus at Invesco.

Event Overview

We kicked off with a series of introductions from notable figures, including 

Panel Discussions

The event featured two main panel discussions, each focusing on different stages of startup investing.

Pre-Seed and Seed Stage Panel

Moderated by Maija Ehlinger from Hypepotamus, the pre-seed and seed stage panel included 

Here are some key takeaways from the panel:

The Current State of Pre-Seed & Seed Stage Investing in Atlanta

  • It’s an interesting time for more traditional industries that are innovating yet have stumbled in the past. In the last 5-10 years there hasn’t been enough capital surrounding traditional businesses. Now, there are a lot more funds that exist for those underserved industries.
  • Since 2022, investment activity has picked back up. What some of their funds are focusing on a lot right now is finding alternative sources of funding and making founders aware of how to diversify capital spend.
  • Businesses that deal with infrastructure and Generative AI have been picking up steam too. Sydney Holness said her fund in particular is diving into AI research and putting it at the front of their portfolio.

Deploying Capital: Does Atlanta Have Enough Startups?

Investors are not having trouble finding great startups in Atlanta, but they are thinking about how they can improve Atlanta’s startup ecosystem to benefit surrounding areas. Here is what Sydney Holness had to say:

“It used to be over half of the portfolio at Collab Capital consisted of Atlanta-based startups. Now, we’re focused particularly on underserved markets. We’re continually asking ourselves “Where is the VC talent?”, “How do we nurture it?”, “How do we partner with other organizations to find that talent pool?”, and “How do we get to that critical mass of diverse investors in the space?”

Sydney Holness, Investment Associate at Collab Capital

What Do We Need to Do to Grow Atlanta Venture Capital?

For Scott Lopano, deploying more exits is the key to growing the venture capital ecosystem in Atlanta. 

“If we show that more successful exits are possible here, more startups will be started and more big checks will be written by investors who know investing in Atlanta startups holds value.”

Scott Lopano, Partner at Tech Square Ventures

Sydney Holness’s idea is a little different. Her focus is on higher education. She wants to share learning and insights with students so their startup ideas can reflect the market.

Dr. Lopez’s ideas are similar to those of the other two panelists. He knows there is great talent in Georgia and the Atlanta area. The key is nurturing, mentoring, and keeping them in Atlanta. In addition, he says that we simply need more people to write checks. 

“Venture capital is not a spectator sport. Investing is the only way to make our environment and city more vibrant.”

Dr. Paul Lopez, Board Chair of TiE Atlanta

Are Investors Solely Focused on B2B at the Moment?

For the most part, yes. It is currently harder to invest on the consumer side than the business side. 

The bright side? In 2017, it would’ve been even harder to invest in B2C. However, if more investors can see successful exits of B2B companies, they will invest more.

The Current State of Series A Startup Investing and Beyond

The second panel, moderated by Mirtha Donastorg from the Atlanta Journal-Constitution featured: 

Here are some highlights from the panel:

Are There Any Series A VC Funds in Atlanta?

Is there a true series A VC fund in Atlanta? No.

But, we’ve come a long way.

In previous years, software companies had limited options and much less capital from the outside. Fast forward to now, there have been 50+ finds between the full spectrum and a lot more capital coming in. The ecosystem is more mature.

“People make the fact that there isn’t a true Series A VC fund in Atlanta sound negative. But, when we tell these series A startups to go find funding in a bigger market, it doesn’t work out all the time because those funds aren’t as helpful. In Atlanta, we are partners for loyal companies that are fair.”

Elizabeth Stephens, Principal at Noro-Moseley Partners

Peter Franconi brings a different perspective. He says there are obviously more conservative investors in Atlanta over New York City or San Francisco. But, he’d much rather have a strong sustainable ecosystem than a super flashy one.

Eileen Lee agreed that it feels like they have made a lot of progress. She’s getting more people reaching out to her from other cities because they’re seeing deal flow being shared across the region.

The Future of Series A Startup Investing

An interesting statistic that came out of the panel was that to become a top-five tech hub in the nation, Atlanta needs to create 2,000 startups per year.

Atlanta is currently only doing 200 per year.

The big players like San Francisco, New York, Boston, etc. all have 2,500 or more startups created per year. 

The only way entrepreneurs will feel comfortable leaving their jobs and creating their own startups is by showing people that successful startups can be created and exited in Atlanta.

Are Series A Startups Leaving Atlanta?

The experts say that series A startups aren’t leaving, but they are going back to being in person and having an HQ. Series A startups don’t really leave the city they started in because once you get to a certain size, that city becomes your ecosystem and you can build a business that scales.

“Before COVID, there was a higher likelihood of series A startups leaving. Now you have enough roots in a specific market to make it worthwhile to stay. Plus, the emergence of remote work has made it much more flexible. You can have a hub, then as you scale you can have your CFO, CRO, etc. in different locations across the country.”

Peter Franconi, Principal at Fulcrum Equity Partners

What’s Next for Venture Capital in Atlanta?

What’s next? Venture Atlanta of course! Remember to register for tickets to the largest venture capital conference in the Southeast. If you’re a founder looking to pitch your company in the Atlanta venture capital ecosystem, you can also apply here.

Thanks again to Invesco for sponsoring such a wonderful event!

Atlanta Venture Capital FAQs

What Are the Current Trends in Pre-seed and Seed-Stage Investing?

Here are some key takeaways from the “State of Startup Investing in Atlanta” that encapsulate the current trends in pre-seed and seed-stage investing:

  • Traditional industries are seeing more investment opportunities
  • There is a significant focus on finding alternative sources of funding and educating founders on diversifying their capital spend
  • Generative AI has become a prominent area of interest, with significant research and investment directed toward it
  • There’s a concerted effort to nurture and retain local talent, particularly from higher education institutions 

How Has the Investment Landscape in Atlanta Evolved?

In short, the investment landscape in Atlanta has matured.

  • There are more investors willing to spend compared to 2022
  • Software companies now have more options with 50+  finds and more capital coming in
  • Investors are focused more on the strengths of the Southeastern region, including nurturing local talent and leveraging regional assets
  • The rise of remote work has provided startups with more flexibility in their operations, although series A and up startups are choosing to stay in Atlanta
  • Investors from other tech ecosystems like in Miami or the Midwest are reaching out to get a piece of Atlanta’s startup culture

What Industries or Sectors Are Attracting Significant Investment in Atlanta?

Here are a few industries that the panelists discussed in the “State of Startup Investing In Atlanta” that are gaining traction.

  • Generative AI is receiving substantial attention, with extensive research and investment being funneled into this cutting-edge field
  • Historically underserved traditional industries, such as supply chain, logistics, and manufacturing, are now seeing increased investment
  • Although the financial sector has slowed somewhat, there is still a significant emphasis on fintech startups

How Does Atlanta Compare to Other Tech Hubs Like Silicon Valley in Terms of Investment Opportunities?

According to the panel at the “State of Startup Investing In Atlanta” event, Atlanta needs to create 2,000 startups a year to become a top 5 tech hub in the nation. This is the number it will take to start attracting more investors. Currently, Atlanta is only creating around 200 startups per year. In addition, Atlanta doesn’t have as many investment opportunities in comparison to the big checks you can get from SF, Boston, or NYC. Atlanta is a good ecosystem to get funding from anywhere between 500K and 1 million dollars.

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