Registrations for StartupLounge Atlanta on March 28th are now open! Come on in – the water is fine! (and we think we have the registrations bugs from last year ironed out!).

See you soon!

It turns out that this date coincides with the anniversary of the Bolshevik Revolution in Russia. Being the Venture Communists that we are, we’ll have some fun with it. We’ll give an awesome price to the person who makes the most creative use of the color red in their clothing that night. Should be fun!

Apply here, and we’ll see you there!

“In the social gaming space, the best advice I can give, is be able to explain why it needs to be social. Be careful not to just throw “social” in there because you think it needs to be social. Really analyze why it needs to be social, then nail that piece of it. It sounds easy, but it isn’t.”
-Marshall Seese

In celebration of our return to podcasting, we dug up a vintage version of the intro to the podcast.  Enjoy!  As an added bonus, we play a bit of a song that Scott made with Mowgli’s product, Songster (cover your ears!).  Also, and even better, we filled the break with Home, the latest single from Marshall’s latest CD – a killer tune!  Be sure to try and catch Marshall Seese and the Abandoned at a gig near you …

Oh yeah, the bus is back, too! Predatory service providers go under the bus in the return of one of our more popular segments of the show.

Sponsors for this episode:

Remember, StartupLounge is a non-profit organization. We simply couldn’t do all of these free events and cool podcasts without the support of our stalwart band of sponsors. Be sure to click the logos below and pay them a visit, or even better, drop them a line and let them know how much you appreciate their efforts.

Platinum Sponsor:

Sponsors:

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• How close were your assumptions in the business model with respect to user growth?
• Give us your 30 second elevator pitch – what is Mowgli Games all about?
• Can you tell us the inspiration for Songster? What led you to the concept?
• When we last spoke, the product had recently launched into a Beta state and had some initial success. How has the product been received?
• How close were your user adoption assumptions in your business plan?
• Tell us a cool user/customer story.
• You raised $500K, primarily from local angel investors – which don’t have a tangible track record in investing in social gaming companies. Can you describe that process to our listeners? How did it all come about?
• What do you think convinced the investors to financially commit to Mowgli?
• What surprised you most about the fundraising process?
• Did you ever consider raising money from other places, such as Silicon Valley, Boston, or NY?
• What was the strangest question asked of you by an investor?
• How did your background as an attorney factor in your initial funding success, especially here in Atlanta?
• Did Atlanta’s relatively strong music and entertainment community have an impact on Mowgli’s early efforts with raising capital and getting the product out the door?
• Will you have to raise additional money? If so, what do you think that will be like?
• Some people say that Atlanta is lacking in the talent department – specifically management talent for developing emerging ventures. Is the talent available in Atlanta for Mowgli to keep growing and stay here?
• Could you have bootstrapped this business further?
• Have any community entities been significantly helpful to Mowgli and if so, how?
• What are your thoughts on Facebook, their IPO, and any possible ramifications that it might have for companies like Mowgli?
• How easy, or difficult, does Facebook make the experience for developers?
• What advice do you have for entrepreneurs who are launching startups in the social gaming space?
• If you had to do it all over again, what would you do differently?
• What’s next for Songster and Mowgli?

Show Segments:

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.

And if you still think our shows are too long, frankly, we just don’t care. And we mean that in the most loving way possible. Truly.

Here is the breakdown for the show, in case you want to hop around.

Segment	Starts At:
Intro:	00:00
Opening Dialog:	01:20
Under the Bus:	07:45
StartupLounge Mailbag:	11:25
Variety/Comedy/Hmm… Break:	17:25
Main Discussion Topic:	21:40
Wrap-up/Analysis	58:00

Guest Bio:

Marshall Seese, Founder, Mowgli Games

Marshall is an experienced entrepreneur with a background in music, technology, and law. He earned a JD from the University of Michigan, and opened his own law firm, BCLS Legal only two years after graduation. In late 2008, Marshall sold his stake in BCLS and joined North Highland as their General Counsel. In addition to his legal career, Marshall has launched a number of small businesses and is an experienced musician with a recording agreement through Backspace Records.

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player. You can also take advantage of our iTunes feed.

Personalities and companies mentioned in this podcast:

• Mark Zuckerburg, Facebook
• Gordon Rogers, 151 Locust
• Mike Eckert, Atlanta Technology Angels
• Sig Mosley, CTW Venture Partners
• Rob Kischuk, Badgy
• Zynga

Podsafe music used within this episode:

• The Sundial by Bill deRome
• All the Money in the World by Hutch

Music used with permission within this episode:

• Home by Marshall Seese

A special thanks to Marshall for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

The name of the game here is FUN and OPEN.   We’re roping off several blocks of Avondale Estates for our own devices.  We’ve got games, live music, craft beer and food trucks!  Even a dunking booth!

There’s no application process.  Just sign up, pay up ($10 for two drinks and two food items) and show up.  Oh and yes, a number of investor-types are planning on showing up.  This is a great way to meet established and new folks in the Atlanta venture scene in the ultimate laid-back environment.

The beer garden opens at 4:30 and the music starts at 5:30 at Bart Webb Studios.

See you at the party!

Entrepreneurs: apply here

Investors: apply here

The second StartupLounge in Savannah will take place September 15th, 6.00pm-8.00pm.The best and brightest entrepreneurs in the Creative Coast will gather for an intimate albeit engaging evening of “face time” with investors from Georgia and the Southeast. The purpose with the event is to improve the capital environment for early stage companies with high growth potential in the region.

This is not a venue to deliver your elevator speech openly to a crowd of investors. This is an event where investors and early stage entrepreneurs can meet one-on-one without fear for being hassled by service providers, annoyed by amateur brokers, or interrupted by job-seekers.

The event is entirely free of charge to all attendees, and is paid for by selected sponsors who identify with and support the StartupLounge mission.

What we are looking for from Entrepreneurs/startups are:

1. Must have a product/service at least beta-ready

2. The entrepreneur must have an actual company

3. The company should have the growth potential to reach $50 million in revenue in 5-7 years

4. The venture should be the applicant’s primary job

How to apply to participate

Entrepreneurs who would like to participate should fill in the Entrepreneur Application Form by September 1. StartupLounge will select the 35 entrepreneurs with the most innovative ideas to participate by September 7th. These entrepreneurs will be informed where the event will take place in Savannah.

Investors (business angels, VCs) who would like to participate should fill out the Investor Application Form by September 7th. StartupLounge will inform these investors where the event will take place in Savannah and also send them information about the entrepreneurs who are selected to participate.

There’s a lot of discussion on Twitter, Quora, blogs, et al. about whether we’re in another Internet bubble. Steve Blank makes a compelling case for a bubble; while we see no errors in his reasoning it’s a red herring for those of us in Atlanta.

This phenomena is occurring outside of the Southeast. Deal flow is better than in years past but it hasn’t approached levels reached during the dot-com bubble. A few investors looking to add startup investing for portfolio have returned to real estate lured by the ease of credit and firesale of certain asset classes. Competition for seed funding and series A is still very high e.g. Toomah and ScoutMob. There just isn’t any evidence to support a bubble in Atlanta.

None of this should make you change your plans. Of the many different things you need to think about, this isn’t one of them. Keep your head down and focus on execution. The fundamentals of the startup game haven’t changed. Your goal is to build a business and generate profit for your shareholders.

Whatever all of us are doing is working. The startup ecosystem is very strong; we can’t emphasize that point enough. We have a solid base of knowledgable, experienced entrepreneurs. We have a groundswell of young entrepreneurs. We have a wealth of people across industries who are donating their time to startups. Investors are returning because they’re seeing good businesses with good teams. Innovation is happening here. Right now.

If you’ve been wondering how you can get to the big technology buyers in Atlanta, you may get your chance.  In collaboration with the GA Department for Economic Development, the Technology Association of Georgia, the Metro Atlanta Chamber, Advanced Technology Development Center, the Georgia Chamber of Commerce, and Venture Atlanta, we are organizing a special event to put those big guys in a room with you.  They’re not there to invest, but to tell you what their needs are and what they might be interested in buying.  They want to hear what you’re working on. Attending companies include:

• Ariba
• AT&T
• Fiserv
• GE Infrastructure
• Internap
• Manhattan Associates
• Microsoft
• Scientific Games
• Siemens
• Sony Ericsson
• Southern Company
• Turner Broadcasting System

This event is on December 6 from 11:30 – 1:30; location will be provided to approved attendees. The deadline for applications is December 1.

The format is simple:

• 5-minute pitch
• 10 slides or less
• no demos

To be considered, provide a 1-2 page executive summary (send to josh@startuplounge.com) and:

• be a Georgia-based company.
• own the technology behind your product.
• your product is released.
• you’re looking for customers, partners, or distribution channels.

Lunch is provided and Wi-Fi is available.

Apply to attend by clicking the link to the left in our "Upcoming Events".

Hosted by:

StartupLounge Festivus
Tue, Nov 30 7-9pm @ 151 Locust

• registration is required (free) → Go to http://www.meetup.com/151locust/calendar/15414492/ for registration, latest details, and directions.

In what has become something of a tradition, we’re working with our friends Ed and Wendy at 151 Locust in Avondale Estates to bring you another rock ‘em sock ‘em “live” StartupLounge podcast this holiday season. Our guest will be Joe Gruca of Toomah, an Atlanta startup and winners of the TAG/GRE Business Launch contest. Joe has an interesting story and we’re excited to talk to him about his startup and his journeys. 151 Locust is providing refreshments (thanks Ed!) so come and enjoy Festivus with the rest of us. (feats of strength TBA)

Mike’s Office Hours
Tue, Nov 23 4-7pm @ Taco Mac Perimeter

Grab a beverage and let’s talk about what you’re doing.

UGA – TI:GER Pitch-Off
Mon, Nov 29 4:30-7:30pm @ Hodges Room at the ATDC

• registration is required (free) → please email Margi Berbari (margi.berbari@mgt.gatehc.edu) to sign up. Go to http://atdc.org for directions.

Can’t make it to the Georgia – Georgia Tech football game? Well, you have an opportunity to cheer your favorite “pitch” to victory (and cash prizes) at the UGA – TI:GER Pitch-Off on Mon, Nov 29 5-7:30pm @ the Hodges Room at the ATDC. Hear students from the University of Georgia’s Terry College of Business Entrepreneurship Program and TI:GER (Georgia Tech and Emory University’s collaborative entrepreneur program) pitch their businesses. Each presenter has 3 minutes to present their product or business in front of a panel of judges (Mike Blake, Scott Burkett, and Jerry Recht). The winners get $1500 in cash prizes donated by StartupLounge and Jerry Recht. Good field research for those applying to StartupRiot early next year.

StartupLounge is taking the party on the road to Savannah, Georgia on November 2. The best and brightest in the Creative Coast entrepreneurial world will join investors for cocktails, gourmet food, and engaging discussions. Our hope is that those engaging discussions, especially amongst the entrepreneurs, are continued in the months to come.

For those new to StartupLounge, this event is absolutely 100% free to attend and always will be. Only vetted entrepreneurs and investors can attend so you’ll need to register and be approved. Here’s what to do:

• visit StartupLounge.com (hey, you’re already here!)
• Create an account if you don’t have one (big blue “Join Today” button on your right)
• Log in and create a profile (this information is given to investors prior to the event)
• Apply to StartupLounge Savannah (hint: the link is on the left)
• If approved, you’ll get an email with the event location
• Tell all the entrepreneurs and investors you know to attend

If you’re a student, you can still apply to attend though we have a limited number of spots; when applying, select “Observer”.

If you have any problems with the above, please send an email to josh@startuplounge.com – while we have many talents, psychic ability isn’t one of them – and we’ll help you.

If you’re a service provider and would like to attend, the only way you’ll get in the door is to sponsor StartupLounge Savannah. If you’re interested, send an email to savannah@startuplounge.com and we’ll get back to you with more information as quick as possible.

StartupLounge Savannah is organized by a wonderful group of people from Savannah’s startup community and wouldn’t have happened without them. Mike and I are merely providing guidance that’s of questionable value. These are the people making it happen and if you see them, make sure to say thanks and buy them a cup of coffee.

• Jake Hodesh
• Jamie Wolf
• Orjan Isacson
• Page Siplon
• Raymond Wenig
• Mary Ellen McClanahan

If you have any questions, email savannah@startuplounge.com and we’ll get it answered.

2010 marks a new direction for StartupLounge.  We are shifting our conversation away from funding businesses to building businesses.  This doesn’t mean that we think that funding businesses is unimportant.  However, other grassroots organizations are picking up that banner and our voice, frankly, is no longer needed in that particular discussion.  For any organization to remain relevant, it must evolve.

So, to get to the point:  We believe that the “capital availability” discussion has fundamentally changed.  There is capital available, even now.  Deals are getting funded, even now.  And, it is, as always and as it should be, tough to get funded.  Atlanta does not generally fund science projects; we fund businesses that we understand and where we have a natural advantage, such as information security, mobile technology, business informatics, payments and transaction processing and media content.  We are showing increasing comfort with cleantech deals and medical devices.  We generally don’t fund consumer products (although four such deals have been funded through connections made at StartupLounge so far), social networking deals, and pharmaceutically-based biotechnology.

We know that capital is available because we  see deals getting funded.  We see the investors come to StartupLounge Atlanta (formerly known as CapitalLounge) and AngelLounge.  They are engaging as mentors in PitchCamp.  And it’s not just us.  StartupRiot has become a must-attend event and the investors turn out in force there.  StartupChicks is seeing investor interest.  I saw a few investors at Startup Atlanta’s inagural event.  The Atlanta Technology Angels have gotten “back on the line”.  Welcome back, guys.  We missed you.

Here’s the problem.  The deal flow here is just not good enough.  Just so there’s no mistake – there are not enough good companies worthy of investment in Atlanta.  There are good entrepreneurs, and some really good ideas, but the companies themselves are half-baked.  Not ready for prime time.  So, rather than simply complaining about the weather, we’re going to do something about it.  Putting half-baked companies in front of investors is not all that productive.  Oh sure it feels good and everyone loves the sweet and sour meatballs.  But, as Lance so eloquently articulated, there are lots of organizations out there trying to help.  We need to make sure we are really helping in order to remain relevant, or we can just shut it down and I can play more Star Trek Online (an astonishingly good game, BTW.  I am terrified it will one day assimilate my life.)

Atlanta has lots of marketing professionals, accountants, lawyers, strategic consultants, coders, engineers, and outsourced CFOs.  And business appraisers.  We don’t see a great many crack salesmen and operators.  They may be out there, but because they know how to sell and operate, they either don’t need to raise money or they already have.   Which means they don’t need us.

If companies don’t sell well and/or operate well, that in itself is a big hurdle to overcome.  So, at StartupLounge, we are going to focus our attention on companies that either a) already have strong operating and sales potential/talent, or b) have other pieces in place and we can help them build more complete companies.  Here’s what that means in more practical terms.

First, StartupLounge Atlanta is going to be smaller. It’s cool to fill up a room and it’s a great boost to the ego.  It’s also not as effective as it could be so we are focusing on quality over quantity.  It is going to be harder for companies to get in.  This is an absolute necessity for the following reasons -

1. We don’t want to encourage mediocrity.  Entrepreneurship is about excellence.  Only companies that investors perceive to be excellent are going to be funded.  And, we want to encourage entrpereneurs to keep improving their companies to improve their chances at being issued an invitation the following quarter.
2. We need to keep investors interested by showing better deal flow.  When investors spend 3 hours talking to people and at most run into a deal or two that’s even interesting, they think twice about continuing to show up.
3. We need to keep entrepreneurs interested by improving the investor/entrpreneur ratio.
4. With finite resources, we need to focus our effort on those companies we are in the best position to help.

So what does it mean that it will be “harder to get in”?  Well, to be blunt, just because you’ve gotten in before, it doesn’t mean that you will next time.  Our criteria for admission will be (roughly) will boil down to this:  If we heard your pitch and you were a complete stranger, would we be inclined to introduce you to our personal contacts in the venture (note we didn’t say “investor”) community in Atlanta?  Things that will help you get in will be:

• We can make sense of your business.  StartupLounge is allowed to have a rambling manifesto.  You’re not if you want to come to our events.
• We can do some background research online on you and your business (Facebook, LinkedIn, and a company web site).  If you’re basically a blind box, we’re not likely to keep someone known out to let you in
• Your business appears to have the potential to grow to $50 MM in value in 5-7 years (you’re not a “lifestyle” business.  Lifestyle businesses are fine but you’re not our target market)
• Your business is driven by critical intellectual property that you or your business owns (not licenses)
• You have some form of customer validation by way of beta testing, alpha testing, letters of testimonial or even *gasp* paying customers.  Honestly, why would you spend time and money developing a business to produce something that you have no clue if someone will buy?  Market research does not answer that question.  Conversations with customers do.
• You make substantive progress over time.  If you’re “just waiting for capital”, you can continue waiting on someone else’s nickel
• Your business is looking for a reasonable amount of capital.  If you’re looking for $10 MM for example, just hire an investment bank
• Better yet, your business is viable with or without external capital.  Capital would accelerate, not enable, your business
• You’re in the business more or less full-time

The refinements above should improve the overall event by making it more accessible, with more, higher-quality connections being made.  Oh, and by the way, the color coded badges are gone.  Done.  We don’t want investors to feel like targets anymore, and we want to impress upon everyone that there are many kinds of connections that can help build the company other than with check-writers.  Many attendees have told us that connections made at StartupLounge helped sell product, find talent, find technology and find strategic partners.  With a smaller event, color-coded name badges should be less important anyway.  If we let them in the door, assume those people are worth introducing yourself to.

Second, we’re not letting investors off the hook.  You can’t just say you’re an angel investor and get a free ride.  We have asked all AngelLounge participants to sign a commitment that indicates:

• They have the funds to invest if they so choose
• They will commit to attend at least one StartupLounge event per year
• They will participate in at least one PitchCamp/StartupSeminar per year

This is already working.  One angel attended the first StartupSeminar and he said that document was the reason why.  Others have withdrawn from AngelLounge, feeling that they do not meet our definition of an active angel investor.  Again, we’re focusing on smaller groups to make a bigger impact.  We’d rather have 15 real angels in the room than 50 who say they are and then have to try to play a game of Clue to figure out who the actual check-writers are.

Third, we are changing our educational focus.  It’s no longer all about PitchCamp and raising money.  If you don’t meet our admission criteria for StartupLounge Atlanta right now, we are offering free help to get you there.  We are launching monthly StartupSeminars.  The StartupSeminars will include PitchCamp on the months directly preceeding a StartupLounge Atlanta event, but mostly, they will cover topics that help entrepreneurs build companies  Specifically, we are targeting areas of knowledge that are important, and might be too expensive for entrpreneurs to access directly.  Our first StartupSeminar, “Get Retail Ready”, was a smash success.  After PitchCamp in February, we have Kenji Kuramoto and AcuityCFO coming in to lead a workshop on building financial models for startups.  We are working on legal workshops, sales workshops, bootstrapping workshops, hiring workshops and other toolsy content that you can take home with you and move your venture forward starting that day.  Our podcasts will still occasionally cover funding topics, but we already have 30 or so of those podcasts online.  We’re going to focus more on entrepreneurs who have built businesses and can share real world advice that entrepreneurs can use as tools to move their own ventures forward.

Fourth, as a personal commitment, I am re-starting my monthly office hours, without fail.  An announcement on that will come soon.  My job has taken me out of one of the things I like doing most, which is mentoring.  No longer.

We are excited about this new direction.  We are re-energized.  Our sponsors have voiced universal approval, as have the investors, entrepreneurs and friends of StartupLounge to whom we have spoken.  We think we are going to help more entrepreneurs be successful, whether they raise funding or not.  Some of our community, for now, will be left behind.  We hope you will take it as a challenge to be met for the betterment of your company.  For most of you in the community, the result is going to be a more focused, effective StartupLounge, and we can’t wait to get started.

In addition to consuming copious amounts of “adult beverages” during the session (wheee!), we also discussed the now infamous Bresnitz paper, as well facilitating a lively Q&A session with the audience.

Banks go under the bus, and @Unblakeable comes with the smiley face on for a “Look Who Gets It” segment.  Another great selection of listener emails and a dash of StartupLounge humor to top it all off. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us the Atlanta Technology Angels elevator pitch.
• More specifically, what kinds of deals are you looking for?
• What are the criteria to be an ATA member?
• Explain the process for a company to present itself for consideration by the ATA
• How do most deals find you?
• Tell us about 1-2 investments the ATA has made in the past year?
• How has the economy impacted the ATA’s membership and by extension, the ATA’s funding activity?
• How do deals get funded in the ATA?
• Are you personally invested in any deals?
• Once the ATA invests in the deal, how active is your participation in the company’s management?
• Are the deal terms more or less standard or do they vary deal to deal?
• How long does the evaluation process take?
• How did your background lead you to angel investing and the ATA?
• What do you think your strengths are as an investor?
• Why did you want to become the ATA President?
• What are your key agenda items for the ATA under your leadership?
• Who are some of the other key leaders at the ATA?
• What do you see as the key challenges of the Atlanta venture environment?
• What’s your assessment of the funding environment today and a year from now?
• What’s an instant turnoff for you when companies present?
• What are your thoughts on the paper published recently published by Georgia Tech professor Danny Bresnitz?
• What’s some advice you can give to companies to maximize their opportunity with the ATA?

Listener Emails Read and Answered on the Show:

AJ: Recently there was some drama around an academic paper co-authored by Georgia Tech professor Danny Bresnitz.  In the paper, the authors came to a number of conclusions about the Atlanta startup ecosystem – what do you guys think?  I’d also be curious to hear Gordon Rogers’ thoughts on this topic as well.

OTP4Ever: I am looking to raise some capital for my startup and have a corporate structure question. I know that outside investors typically invest in “C-Corp”, so there can be multiple classifications of stock and what not.  But obviously, as a green-field startup, I don’t want to do a C-Corp initially, because of the dual taxation.  If I form an S-Corp or LLC initially, is that going to be a turn-off for an angel investor or?  Can I switch the company structure when I have a term sheet, or do I have to start out as a C-Corp?  Any guidance you guys could provide would be helpful! Thanks!I am launching a new internet business and I need to get a quote for web design work.  My question is this.  How can someone get an accurate quote for Web design on their new internet business without giving away the idea?

Karl: Scott/Mike, I just discovered your podcast and absolutely love it! I have an issue that you guys can hopefully help me with.  I have been asked by a friend of mine to function as the Company’s CFO and Treasurer during the development phase of the Company. The agreement is for this not to be more than 20 hours per week and involves maintaining the accounting records, preparing corporate tax filings, develop the business plan and to assist in the search for venture or angel capital funding. Whatever equity interest I agree to take will be substantially diminished by the introduction of outside capital. I have some thoughts of my own, but I’m interested to see what you guys think is a fair way to go about measuring this?

Guest Bios:
Gordon Rogers, President, Atlanta Technology Angels

Gordon is an economist, entrepreneur and angel investor. After working as a financial analyst, in 1988 he established a business (Meliora Systems, Inc.) that created one of the pioneering products in the corporate e-learning & talent management field (Ingenium). He guided the growth of the company from a start-up to IPO through a merger in 1998 with Paul Allen’s company, Asymetrix Learning Systems (ASYM). This exit event yielded a 12X return for initial investors in the business.

After leaving ASYM/CLKS/SUMT in 2000, he spent the next several years investing in and serving on the advisory boards of various tech startups in the e-learning and online coaching sectors. He now focuses primarily on helping early stage ventures in the the digital media and edutainment sectors raise capital and create strategic partnerships.

He is President of Atlanta Technology Angels, and a member of Angel Lounge , the MIT Enterprise Forum, and the Atlanta CEO Council. He is also Managing Director of Vernon Bridge Ventures, an early stage capital/advisory firm. He serves on the boards of Rapid LD and Good Egg Studios.  He is also an angel investor in Elf Island, a new social MMO for kids.

He has extensive experience serving on boards of non-profit organizations (YMCA of Greater Atlanta, Interfaith Outreach Home, Teacher Support Network, The Lionheart School). He received the 2006 Volunteer of the Year Award from the YMCA of Metro Atlanta. He recently completed his first Olympic distance triathlon to raise money for the Leukemia & Lymphoma Society.

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player. You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Underground by Roadside Attraction
• Tweetin’ on a Jet Plane by Steve Goodie
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.  And if you still think our shows are too long, frankly, we just don’t care.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to Gordon for coming in and hanging out with us!  Also thanks to Ed Riecker and the gang down at 151 Locust for hosting us and throwing a great party!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

We also dug up some old incriminating tape of Stephen sharing his true feelings on running VentureLab … a rare moment for sure – definitely tune in for that.  We also discussed the upcoming Venture Atlanta 2009 conference, and some of the new opportunities (and focus) on true early-stage companies.  Good stuff.

The good Mr. Blake suits up, takes the mound, and throws heaters at a a group of folks in Atlanta that just can’t seem to get with the program.  Another great selection of listener emails and a dash of StartupLounge humor to top it all off. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us the pitch for the new ATDC, EII, adn the ATDC Seed Fund!
• Talk about the ATDC re-organization.  Why now and why this way?
• How long have you had the idea for re-organizing the ATDC/VentureLab/SBIR entities the way you have?
• How is the reorganization going to impact the ATDC Seed Fund’s operations?
• How will the reorganization impact your deal flow?
• As you were being considered for your new post, clearly this was on your agenda.  How prominent were these ideas as you discussed the new position?
• Why should entrepreneurs be excited about the reorganization?
• Is the ATDC still considering a bricks-and-mortar facility in Gwinnett County?
• Will the reorganization change how you make investment decisions and commitments?
• Could the reorganization increase ties with state entities with similar missions, such as the GRA Seed Fund or some of the programs the Georgia Department of Economic Development?
• How long will it take to complete the reorganization?
• What has the reaction been from the VC community to the reorganization?
• What are existing companies within the ATDC saying about the reorganization?
• Why is GA Tech on board with this concept?  You are seemingly diverting away captive resources.
• As you execute upon the reorganization, what do you see as the greatest challenge?
• What do you see as the greatest need that the reorganization will address?
• How do you see your role as a startup catalyst changing?
• How will you measure success?
• How long until we see the changes on the ground?
• In the ATDC press release, you said, “ATDC will open its membership to all technology entrepreneurs in Georgia, from those at the earliest conception stage to the well-established, venture-fundable companies. We’re interested in any technology business opportunity.”  How much more open will the organization be to supporting early-stage companies?
• Does the ATDC need an image makeover to get buy-in from entrepreneurs and if so, how do you go about that makeover?
• You have started making open office hours available.  Is that going to become a permanent activity?
• If you were to give one piece of advice to entrepreneurs listening to this podcast, what would it be?

Listener Emails Read and Answered on the Show:

Alicia: I am currently at a crossroads in my business. I started the company in 2004 and filed a provisional patent application in Oct. 2008 based on some methodologies that I created in working with my small business clients. I have financed my company via “bootstrapping” and have now reached a point where I realize that I need a capital “angel.” I need to develop a prototype for the technology I’ve created, but I’m not sure if I should raise funds, seek a technology partner, or simply sell/license the idea. Any advice and support is greatly appreciated.

Erica: I am launching a new internet business and I need to get a quote for web design work.  My question is this.  How can someone get an accurate quote for Web design on their new internet business without giving away the idea?

Karthik: I am sick of all the conflicting messages and behavioral “to-do lists” from investors!  One investor says he wants to see 10-12 slides in my pitch, another guy tells me that with only 12 slides I didn’t give him enough information.  One investor told me that he expects his entrepreneurs to have maxed out credit cards before he will take me seriously, and another investor told me that maxing out personal credit cards was a sign that I take too much risk and am potentially irresponsible with money, as it is expensive debt.  It seems like investors nitpick on everything, and I am spending a lot of time lately creating revisions of presentations and other documents just to make some potential investor happy.  Any advice?

Rob MacArthur: Scott, I read your post “Creating a Winning Advisory Board” – and had a question. I am currently in need of such a board. I have a list of potential board members and have done up a short package for them. I will send an introductory letter or email and attached will be the following:

• 1 page summary on why I need a board;
• 1 page on expectations, mix of board I am looking for;
• 1 page on existing businesses;
• 1 page reference letter for those who do not know me at all.

From your perspective, is this too much info/not enough? Any thoughts or advice on what should/should not be included would be appreciated.

Guest Bios:
Stephen Fleming, Vice Provost, Enterprise Innovation Institute at Georgia Tech

Stephen Fleming has more than 13 years of private equity experience at the general partner level. Prior to his venture capital career, he spent 15 years in operations roles at AT&T Bell Laboratories, Nortel Networks, and LICOM – a venture-funded startup.

An Atlanta native and summa cum laude graduate of Georgia Tech, Fleming is active in the “alternative space” industry — an investor in three private aerospace companies and is a founding member of the Space Angels Network. He also serves on the boards of trustees for the Spiritual Living Center of Atlanta and for Tech High School, a charter high school emphasizing science, math and technology in urban Atlanta.

Fleming is a member of the IEEE, the American Physical Society, the Optical Society of America and a number of regional technology organizations.

David Sung, Startup Catalyst and ATDC Seed Fund Manager
Having been involved with startup companies as both an entrepreneur and a venture investor, David has a unique perspective as an advisor for ATDC portfolio companies. Operationally he has held roles from engineering to CEO resulting in two IPOs and two acquisitions.

Prior to joining the ATDC, David was a Managing Director at HIG Ventures where he focused on venture capital investments primarily in datacenter infrastructure, semiconductor, and enterprise software.  Before joining H.I.G, he was a Partner at Commonwealth Capital Ventures, leading investments in storage networking and enterprise security. Before entering the venture capital business, Sung was Co-Founder and CEO of Crescent Networks and a Co-Founder of Cadia Networks. Sung also held engineering, marketing and executive management positions at Cascade Communications, Avici Systems, FORE Systems and Bytex Corp. Sung received his Bachelor of Science in Electrical Engineering from Northeastern University.

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player. You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Underground by Roadside Attraction
• All Out of Beer by Possible Oscar
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.  And if you still think our shows are too long, frankly, we just don’t care.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to Stephen and David for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

Apologies to everyone for us going over our time limit.  We quite literally threw the presentation together a day or two before the event.  In retrospect, we probably could have done a better job in marrying our content to Schinkel’s schedule.  We will most likely have an initial meeting with all the volunteers, then have another community meeting which will be a *very brief* presentation of where the group is, and to solicit additional ideas and direction.  As Schink points out in his opening remarks, this particular meeting was just the first meeting of many, and will eventually involve a lot of other groups within the community (not just AWE).

This edition of the StartupLounge.com podcast is actually a screencast/video.  You can use the links below to view.

In short, our Startup Cloud concept is an effort to address provide several key services to the community:

1. Provide a “jumpoff” point – where new entrepreneurs and investors can “get plugged into” what is happening within the Atlanta early-stage scene.
2. Provide better event coordination between the bazillion startup groups in Atlanta – i.e. shared calendar .. yay!
3. Provide a “virtual incubator” whereby the community incubates itself
4. Provide a vehicle to bridge into the corporate world, to bring Atlanta’s corporate players to the table to look at the innovations that are happening here (side note: Since this meeting, we’ve made some progress on this front – looks like we have quite a number of Fortune 1000 companies already interested in hosting events and playing an active role in this).

This was a platform that we started building about a year ago, but as we mention in the presentation, it will take us 20 years to finish the thing given our current schedules.  So, we decided that opening up the initiative to the community is an even better way to go – more hands involved, and more importantly, additional voices and input.

Oh, and for the person who emailed me about the “Boss Hogg” slide – the three personas illustrated are not a reference to anyone specifically, but rather stereotypes that we’ve all come to know and love.

Unfortunately, our A/V guy had to leave the event after the break, so we were unable to record the audio Q&A session at the end.  Which is probably a good thing, because some of it went a bit tangential.  But we did take copious notes, so we’ll be putting something up online soon.

At the end of the day, we pitched a very abstract concept, and managed to get an absolute boatload of people to sign up to volunteer to pitch in and help with the project.  Since the night of the AWE meeting, we’ve since reached out to some of our VC and startup contacts in North Carolina, and they are interested in simultaneously launching the Startup Cloud concept in North Carolina as well.

We have been woefully behind in our reaching out to those who have volunteered to help.  Thanks for your patience!

More soon …

Enjoy!

Unblakeable brings the heat behind the wheel of the bus, this time knocking some pretenders silly.  And, to commemorate Memorial Day, Scott spontaneously bursts into song with an acappella stadium rendition of the Star Spangled Banner (yes, lol – that is really Scott singing – your call as to whether it is comedy, tragedy, or both). Another great selection of listener emails and a dash of StartupLounge humor to top it all off. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us the 30-second elevator pitch on Value Plus Ventures
• Describe your consulting/investing hybrid model
• The model sounds as if you invest in companies with the result that they turn around and pay you for consulting fees?  Is that an accurate picture?
• How does the hybrid model differ from any active early stage investment firm’s model?
• Are there other investment firms that have had success with a similar model?
• Have you found the model makes it harder or easier to do deals?
• Why did you choose that model?
• Your web site mentions that VPV will look at deals across most any sector – but are there sectors or trends that are of particular interest to you right now?
• Can you talk about some deals that VPV has done recently?
• Was it hard to raise this fund, given the economic climate?
• What is the story you tell potential limited partners that excites them about investing in Georgia and the Southeastern US?
• How long does your deal evaluation process take?
• How do deals generally find you?
• What is the impact of the current economic climate on your investing behavior?
• What impact is the current economic climate having on your portfolio companies?
• What advice do you give to entrepreneurs regarding addressing the current economic environment?
• What impact is the current economic climate having on your deal flow?
• What is the VPV view of the Atlanta and Southeast early stage venture scene right now?
• When looking at a deal or an entrepreneur, what gets you very excited?
• When dealing with you guys, what’s one thing that’s an absolute no-no?
• How involved are you day to day with your portfolio companies?
• If you were to “sell” yourself to an entrepreneur to take you on as an investor, what do you think is your biggest selling point?
• What is a piece of advice you would give to new early-stage investors?
• If you could change something in the environment to make your jobs easier, what would that be?
• What is the best way to get an opportunity in front of you?
• If you were to give one piece of advice to entrepreneurs that might want to approach you for capital, what would that be?

Listener Emails Read and Answered on the Show:

Bill: I have reached the point where I am talking to an angel investor about my project. They are interested and trying to evaluate whether my invention has the potential to succeed. O.K. that’s great… but my mind is reeling, what happens next? What are the next steps to when an angel does say, “Yes, I want to get involved and supply you with funding.”???I want to stay ahead of the curve, and not get caught flat footed, if I get the green light.

MarketMaker John: All investors are obviously looking for a strong return on their investments. I’m interested in those who want a high capital ROI but also want those investments to simultaneously influence positive change in the world. I am of the belief that “social” and “capital” investments do not need to be separate. How do I find investors that share this same viewpoint? Do they exist?

MGreene: Scott has said many times before that entrepreneurs should never be afraid to reinvent themselves (as it pertains to the direction and focus of their company).  Thinking about that earlier today made me curious about something.  If you guys (Scott and Mike) could create StartupLounge all over again, what would you do differently?

Guest Bio:
Lee Provow, Partner, Value Plus Ventures

Prior to joining Value Plus Ventures, Lee served as President, Global Operations for Premier Global Services and has more than 20 years experience in the data and business services industry.

Prior to joining Premiere Global in 2003, Lee served as Chairman of the Executive Committee and Chairman of the Board of Comdial Corporation, a converged voice and data communications service provider offering advanced business phone systems, Voice over IP (VoIP), voice processing, unified messaging, and computer telephony integration solutions.

In 2002, Lee was President and Managing Director of Commonwealth Holdings, LLC, a private investment fund. He served as President and Chief Executive Officer of Intelispan, a provider of network solutions and enabler of electronic communications, from January 2000 until McLeod USA acquired it in December 2001, and he served as a director since August 1988.

Provow was a founder and Chief Operating Officer of GridNet International, a provider of enhanced data communications services, from 1995 to July 1997 when it was acquired by WorldCom. Lee began his career in the transaction processing division of NCR where he spent 15 years in various domestic and international technical, marketing, product management, strategic planning, and execution positions.

He is married, has two children, and is a resident of Atlanta, Georgia.

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.  You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Underground by Roadside Attraction
• 10,000 Friends on MySpace by Project Sisyphus
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to Lee for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

Sponsors for this episode:

Be sure to click the logos below and visit our sponsors!

Shownotes:

Guests on this show included:

1. Cindy Cheatham, ATDC
2. Andy Ibbotson, Synthis
3. Jonathan Goldman, Platform Technology Ventures (in addition to discussing Suniva and VentureLab, Jon addresses the rumor that is going around about Stephen Fleming’s choice of apparel in the office)
4. Melanie Brandt, Technology Economic Development, Gwinnett County Chamber of Commerce.  Melanie stops by to chat about CCP Games/EVE Online and the gaming initiatives happening in Gwinnett County.  She also drops a clue about Asante Bradford’s recent trip to Korea to scope the gaming scene and do some recruiting.
5. Bart Foster, SoloHealth (startup spun out of Ciba Vision/Novartis), joined briefly by Lance Weatherby (ATDC) – discussing SoloHealth, bootstrapping the company with involvement from customers and partners, fund raising in the current economy
6. John Willis, CloudCamp , discussing CloudCamp, Amazon’s EC2 cloud solution, Twitpay, Hadoop, Erlang/Map Reduce, and Atlanta as a cloud market.
7. Adam Wexler, Rank’em (new music startup coming out of University of Georgia), talks about Rank’em, as well as the challenges that UGA entrepreneurs face living an hour and a half from Atlanta, and often in the shadow of Georgia Tech, how he recruited a technical team to work with him (he isn’t a developer), placed second in UGA’s Top Entrepreneur competition,
8. Jon Birdsong, another UGA grad and founder of Relate Media, talks about what is happening at UGA/Athens
9. Jeff McConnell, Atlanta-based angel investor and one of the key members of AngelLounge – talks about the current angel investing landscape in Atlanta and the Southeast.
10. Todd Merrill, Global Crypto Systems, talks about the progress of his company since joining the ATDC last June
11. Charles Ross (Director, ATDC), reflects on the day’s events, and provides an update on the ATDC seed fund and the new GRA (Georgia Research Alliance) seed fund
12. Chris Hanks (Director of the University of Georgia’s Entrepreneurship Program), talks about UGA’s Top Entrepreneur competition and the latest happenings in Athens

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor, have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

And don’t forget – the StartupLounge.com message forums are a great resource for fast-growth entrepreneurs. If you need help with any aspect of your venture, we welcome you to jump in and get the help you need!

Enjoy!

We have made this decision so as to avoid a conflict with the BIO conference that week, which is the largest biotechnology investing and innovation trade conference in the United States and is being held in Atlanta this year.  We are concerned that too many entrepreneurs with biotechnology businesses (medical devices, drug discovery) and investors will be forced to make an unfortunate choice between CapitalLounge and missing part of the BIO conference.  Therefore, while we are confident in our ability to hold a well-attended and energetic event, we don’t want to put our bio/medical technology community members in a bad position.

In the interest of encouraging the fullest participation possible in CapitalLounge, we have made the decision to move the event to June 10th.  The status of your invitations to the event is unchanged.  If you have received an invitation, it is still valid. If you have not yet received a response from us regarding your application, there is no need to re-apply – just stay tuned as we’re still evaluating the flood of applications for the event.  If you received an acceptance of your application to attend, but can no longer make the event, please drop a quick reply to this email so we can remove you from the list and make room for someone else.

We will send reminders as over the next few weeks.  We apologize for any convenience the change might cause, and look forward to seeing as many of you as possible on June 10th.

Thanks for your patience!

The bus is back, and man is the driver upset.  Scott brings the hammer down on another misguided service provider who recently took advantage of a local entrepreneur. Another great selection of listener emails and a dash of StartupLounge humor to top it all off. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us the 30-second elevator pitch on Intersouth Partners
• Why does Intersouth have a large geographic investing area (primarily the Southeast U.S)?
• What are the challenges of investing out-of-state for Intersouth, and how do they impact how you do business?
• Why do more early-stage investors seem to be more comfortable with investing outside their immediate area?
• What is attractive about Georgia to Intersouth, and what types of deal flow do you see here?
• How does the deal flow you see in North Carolina contrast to that coming from Georgia?
• How does the general preparedness of entrepreneurs in North Carolina contrast to that of Georgia?
• Where do most of your investment opportunities come from, and what is the best way to get a deal in front of you?
• In which Atlanta-area companies has Intersouth made investments?
• What is Intersouth doing to establish a name or presence in the local market?
• Why is it that a number of North Carolina venture capital firms appear to be actively developing a presence in Georgia?
• Do you see any Georgia investors doing deals in North Carolina?
• How active or strong is the angel investment community in North Carolina and Georgia?
• Do you any regional or local trends in deal valuations?
• Do terms and valuations for investments in Georgia differ significantly from those in the other states where you operate?
• Do you agree with the common perception that there is insufficient capital available in Georgia to fund good opportunities?
• What are some characteristics in our market that make Georgia more challenging than other states? Are there things we can do better?
• Are there certain business models that you see evolving within the technology space that are of interest to you right now?
• What mistakes do you see entrepreneurs with SaaS deals make?
• How do taking advantage of things like cloud-computing factor into deal quality?
• Can you walk us through your investment in Atlanta-based Purewire?
• Tell us one mistake that entrepreneurs make that is an instant turn-off?
• How is Intersouth responding to the current economic environment?
• What are you advising entrepreneurs to do as they react to the economy?
• What is the one piece of advice you’d like to leave with entrepreneurs listening to this show ?

Listener Emails Read and Answered on the Show:

Kevin (from Michigan): I am loving the show and think you guys are doing an awesome job. I stumbled across your Podcast a few weeks ago while searching for an entrepreneur/venture capital educational program. The first show I listened to was Angels in Atlanta, from then on I was hooked. I then started listening from the beginning – I am currently on #23 and listen to at least one show every 1-2 days while driving back and forth to work.

I have always had the entrepreneur spirit but it really caught on fire a few years ago with some consumer product inventions we developed. My recent interest in learning how to raise capital is due to a new venture my partners and myself are taking on, a high performance, high tech, electric motorcycle. It is very exciting and everyone we end up working with is just as passionate about it as we are.

We have completed the bike design and almost finished with our business plan. It appears our seed capital will at least need to be $1M for the R&D phase. This would give us all engineering, tooling and prototypes where we can go into production.

I think the capital lounge is an awesome opportunity for start-ups and I wish we had a connection like that up here in Michigan. Do you think entrepreneurs from outside the Atlanta area could benefit from this event? What areas of the country do the attending investors like to play in? Would a EV start-up from Michigan be considered? Thanks again for the education guys!

Danna: If I were interested in funding a start-up…what is the initial range of buy-in and then return on investment?

David: Just found you last week and listening to your podcast – In the Pandora episode you slammed the slime who prey on start-ups – I actually did a “wahoo!” at J. Christopher’s in Midtown to a series of strange stares. I have recently started focusing on the new venture area and I am disappointed at how far some people justify taking advantage of those who are at maximum flexibility.  When someone has a concept – so often they are willing to do almost anything to see that realized – often to their own detriment.  Not only in the financing arena – but on our side too – the technology side.  U guys rock!  Thanks for doing what you are doing – it is badly needed!

Guest Bio:
John Glushik, Partner, Intersouth Partners

John joined Intersouth in September 1999 and focuses primarily on the technology portfolio. Since joining Intersouth, he has managed the full-cycle venture investment process from deal origination to successful exit, serving as a diligent and respected board member and advisor to management.

John has a background in engineering and consulting within the telecommunications and aerospace industries. His previous experience includes management consulting at Booz-Allen & Hamilton, telecommunications satellite engineering at General Electric and data communications research as a Draper Fellow at the Massachusetts Institute of Technology. He is on the board of five Intersouth companies.

John is an adjunct professor at the UNC Kenan-Flagler School of Business. He sits on the board of VentureSouth, the Southern states task force on venture capital, and serves on the executive committee of the board of directors of the Council for Entrepreneurial Development. He serves on the advisory board of the Entrepreneurs Foundation of the Southeast and is an active member at the Duke University Engineering Council. John holds a B.S. in Mechanical Engineering and Materials Science from Duke University, an M.S. in Aeronautics and Astronautics from the Massachusetts Institute of Technology and an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University.

Comedy Break Lyrics:

Just in time for tax season – enjoy “Kiss This! (Hey IRS)”, by Robert Lund/Michele Davis/Spaff, a parody of Faith Hill’s “This Kiss”:

I don’t want no April 15th
I don’t need another judgment day (no)
Anything the good Lord giveth
Uncle Sam he
Taketh
A-way
‘Cause Big Brother’s got a big debt
Baby, guess who has to pay?

It’s the way you mug me
It’s unspeakable pain
It’s a personal washout
Down a bottomless drain
It’s abhorrently taxing
It’s (uhhnn) believable

KISS THIS! KISS THIS!
Hey IRS -
KISS THIS! KISS THIS!

Doing taxes ain’t so scary
Simply add up what you made (oh)
Take it to the actu-ary
Where he sub-tracts
The tax
You’ve paid
Then you mail in twice the difference
Plus a check for Medicaid

It’s a Form 1040
It’s a penalty clause
It’s inscrutable worksheets
It’s nonsensical laws
It’s unspendable income
It’s (uhhnn) deductible

KISS THIS! KISS THIS!
Hey IRS -
KISS THIS! KISS THIS!

You can tax me on my taxes
Then you tax the funds that remain (oh)
You can tax me on bikini waxes
For a jolt of similar pain (ow)
Slap on sadistic audits
Don’t let anything pass
You’ve bent me over
So kiss – my – assets

It’s the way you mug me
It’s relentlessly lame
It’s aggressively wasteful
This unwinnable game
It’s unsportsmanlike conduct
It’s (uhhnn) depreciable

KISS THIS! KISS THIS!
It’s criminal
KISS THIS! KISS THIS!

Kiss – my bottom line there, baby
Kiss – my bottom line there, darlin’…

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.  You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Underground by Roadside Attraction
• Kiss This! (Hey IRS) by Robert Lund/Michele Davis/Spaff
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to John for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

If you’ve already applied and been accepted to attend, you should receive an email tonight with directions to the new location.   If for some reason you do not receive an email tonight, check your spam folder (doh!), or go to the StartupLounge.com web site and pull up the event details page – if you’re logged in, you’ll see the information on the new location there.

We apologize for the inconvenience, and look forward to seeing everyone on the 25th!

Mike brings the heat and rolls the bus over a group of entrepreneurs that just can’t seem to understand the value of someone else’s time. Another great selection of listener emails and a dash of StartupLounge humor to top it all off. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us your 30-second elevator pitch
• Have you modeled yourselves after any other funds or investors with a similar profile?
• Why do we need Shotput Ventures here in Atlanta/Georgia? Why did you start Shotput?
• Are you investing only in Atlanta-based or Georgia-based companies?
• Talk about the Shotput Ventures model.  Take us through your process?
• How can such a small amount of cash ($15,000-$20,000 per venture, depending on team size) make an impact?
• How did you come up with a 5-10% share?
• Where are you getting your deal flow?
• How many submissions have you had so far?
• How do you evaluate the opportunities?
• Where are you in the fund operating process?  Are you meeting the timeline provided on your site?
• What are the keys to making Shotput Ventures successful?
• Now that you’re investors, what are you learning about the market or the investing business?
• Can you talk a bit about how you recruited the handful of principals behind Shotput?
• How does setting a finite end date (August 10) alter or impact your investing model?  Why do you have a finite end date?
• Is the economy affecting your model at all?
• If this is successful, will there be a Shotput II?
• How is the rest of the venture community responding?
• What will define success for Shotput Ventures?
• What are your thoughts on the Atlanta startup scene?

Listener Emails Read and Answered on the Show:

Dale: Gentlemen, first off I want to thank you for all that Startuplounge does for the community in Atlanta.  I appreciate the efforts and look forward to thanking you personally at the upcoming February event.  I am getting very close to launching my own startup as a first-time entrepreneur.  I know that bootstrapping will only take me so far, and I will probably need to raise a small round of outside capital at some point.  I know that before any investor puts their cash into a deal they go through what is called “due diligence”.  I am petrified of this, as I have never been through it before.  Can you shed any light on this process, and specifically what I’m going to be in for?

BigSkyCountry: If all I have is an idea, is there a resource such as an incubator that will  help me put together the technical team to help bring it to life?

“YellowJacket” Mark: Scott and Mike I love this podcast!  … my question: what makes a great company name these days?  I’m stuck, please help.

Roberto: Everyone says that a “down” market is a great time to start a company, especially if you have the wherewithall and the means to float the business.  But what if you don’t have the cash?  Should I just go get a steady day job right now and play the waiting game until the economy stabilizes and I have some more cash available personally?  I’m worried that investors are on the sideline right now and won’t be interested in my deal.

Guest Bios:
David Cummings, CEO, Hannon Hill

A business and technology enthusiast, David Cummings founded Hannon Hill Corporation, an Inc. 500 company, in January 2001. Hannon Hill’s goal has always been to provide strategic web content management (WCM) solutions, with an emphasis on personalized customer service.

A WCM subject matter expert, David’s articles have been published on O’Reilly’s XML.com and OnJava.com, in addition to popular web development sites such as SitePoint.com. He has presented at the Silicon Valley Web Guild, Silicon Networks, Atlanta Electronic Commerce Forum, and the Independent Computer Consultants Association. With more than 10 years of software development experience, David is an experienced programmer and has written code for commercial applications in Ruby, Java, PHP, ASP, and Visual C++.

David is a member of the Entrepreneur’s Organization and serves as chairman of the board of the Technology Association of Georgia Content Management Society. A native of Tallahassee, Florida, David earned a bachelor of science degree in economics from Duke University and studied at the London School of Economics. David blogs at DavidCummings.org.

Sanjay Parekh, Founder, Startup Riot

Sanjay is the founder and organizer of Startup Riot and Startup Dinner and also serves on the board of directors or advisers of a number of startups. Previously Sanjay was a founder of Digital Envoy where he was the CEO and later the Chief Strategy Officer. Sanjay is the inventor of Digital Envoy’s patented NetAcuity IP intelligence technology. Digital Envoy was acquired by Landmark Communications in June 2007.

Prior to founding Digital Envoy, Sanjay was a founding employee of Arris Interactive, where he played a pivotal role in various markets throughout the U.S., Asia, and Europe for product deployment. His efforts helped secure over $1 billion in client contracts at Arris Interactive.

Sanjay has served as a technology and strategy consultant for numerous startups, corporations, and organizations and has served as an expert witness for the Department of Justice (U.S. versus Extreme Associates). In 2004, Sanjay was named one of ten Outstanding Young Atlantans by Outstanding Atlanta, one of the “Top 40 Under 40″ Georgians by Georgia Trend magazine, and a 2004 American Marshall Memorial Fellow with the German Marshall Fund of the United States. In 2003, Sanjay was named to MIT’s Technology Review TR100 list as one of the top 100 young innovators of 2003 and one of the “Top 50 Entrepreneurs” in Atlanta by Catalyst Magazine. Sanjay was also named a Technology Pioneer with the World Economic Forum in 2002 and 2003.

Sanjay is a Senior Member of the Institute of Electrical and Electronics Engineers. Sanjay has an electrical engineering degree from the Georgia Institute of Technology and an MBA from Emory University’s Goizueta Business School. You can find Sanjay’s writings on his blog and his Twitter account (@sanjay).

Comedy Break Lyrics:

Featuring “Frank’s Garage”, by Steve Goodie, a Bob Dylanish tribute to going green … with cars.   Enjoy!

So you’re in an economic pickle
With your great big sports utility vehicle
Can’t afford the fuel, can’t sell it
Can’t trade it, what the hell you gonna do?

I know a guy, he’s been turning wrenches for years
You should give him a try, and yes, you can pay him with beer

Come on down to Frank’s garage, bring him your big old motor
He’ll take your SUV apart, and build you two Toyotas
Forget bio-diesel and solar
He’ll cut your SUV in half, and make two Corollas

Tired of getting thirty gallons to the mile?
Need something smaller than your domicile (that means your house)

Come on down to Frank’s garage, with that Hummer you’re so fond-a
He’ll take your SUV apart, and build you two damn Hondas
He’s got the tools, and a price you can afford
He’ll cut your SUV in half, and make four Accords

Gas is twenty bucks a quart
But Frank don’t want you in no import
See how many Mini Coopers he made
Out of one excessive Escalade
Escalade, Escalade, Escalade, Escalade
Escalade, Escalade, Escalade, Escalade

Come on down to Frank’s garage, with that big old Dodge Dakota
He’ll take your freakin truck apart, and build you eight Toyotas
Frank’s not out there hugging tree-es-es
He’s cutting Navigators into Prius-es-es

Frank once worked at the Hummer plant, but last year he got fi-red
Now he turns two-ton Tonka tanks into tiny little hybrids

Come on down to Frank’s garage, just east of Escondido
He’ll take your SUV apart, and build you a fleet of Geos
There’s no need to fret bro
With a new Suburban and a case of bourbon, he’ll make you sixteen Metros

Yeah come on down to Frank’s garage, it’s worth the wait in line
Come on down to Frank’s garage, it’s two for one all the time
Yeah come on down to Frank’s garage, are gas prices killin ya?

Come on down to Frank’s garage, yeah you can run on one cylinder!

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.  You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Underground by Roadside Attraction
• Frank’s Garage by Steve Goodie
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to David and Sanjay for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

Click the video below to view. If you want to view the low-definition version click here to view it on YouTube.

Thanks to Rick for putting this together – and if you have a moment, be sure to check out Faded Glory, Endorphin’s new film about the trials and tribulations of an amateur baseball team that eventually won the national title.

Enjoy!

The 2009 TAG/GRA Business Launch Competition is coming up, and we discussed it in the opening of the show.  “Under the Bus” or “Look Who Gets It?” – Tune in to find out!  Mike also challenges Scott to a startup mentoring challenge for charity (the gloves are off now, folks). Another great selection of listener emails and a dash of StartupLounge humor to top it all off. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us your 30-second elevator pitch
• Can you tell us about your recent closing of Frontier’s latest venture fund?
• Was it hard to raise this fund, given the current economic climate?
• What is the story you tell potential limited partners that excites them about investing in Georgia and the Southeastern US?
• Do you have meaningful competition for deal flow?
• What’s the wackiest deal that’s been pitched to you?
• Could you highlight a success story of which you’re particularly proud?
• What is attractive to you about the Atlanta market?
• When you receive an opportunity and you’re inclined to pursue it, what is your process for examining that opportunity?
• On average, how long does it take to get you from that starting point to an agreement on an investment?
• What’s your overall assessment of the Atlanta early stage market? Is it improving, and if so, how do you see that?
• What is the impact of the current economic climate on your investing behavior?
• What impact is the current economic climate having on your portfolio companies?
• How are valuations holding up given the bad economic outlook?
• What advice do you give to entrepreneurs regarding addressing the current economic environment?
• What impact is the current economic climate having on your deal flow?
• How many opportunities do you get exposed to a year and how many investments do you make?
• When dealing with you guys, what’s one thing that’s an absolute no-no?
• How involved are you day to day with your portfolio companies?
• If you were to “sell” yourself to an entrepreneur to take you on as an investor, what do you think is your biggest selling point?
• What is a piece of advice you would give to new early-stage investors?
• If you could change something in the environment to make your jobs easier, what would that be?
• What is the best way to get an opportunity in front of you?
• If you were to give one piece of advice to entrepreneurs that might want to approach you for capital, what would that be?

Listener Emails Read and Answered on the Show:

Gia: Gia: Hey guys love the show!  I’ve heard you guys use the phrase “cram down” several times in past shows. What the heck does it mean?

Cassandra: Cassandra: Scott and Mike, I am starting up a new company and as part of this I am trying to put together a detailed breakdown of my target market.  It seems that the data is readily available out there if I am willing to pay for it.  I am bootstrapping this company by working two jobs, sometimes three.  What’s a poor girl to do?  I can’t afford to spend thousands of dollars on marketing reports.  Help!

ImTakingoff: I am moving forward with filing a series of patents around my technology and have a question regarding the selection of the best attorney/firm to do the job.  I have done a good bit of research into firms that have done a great bit of work in my industry, but I’ve compiled a rather nice list of potential candidates.  Should I be worried that these firms have worked or continue to work with my competition on adjacent patents??

Guest Bio:
Joel Lanik, Principal, Frontier Capital

Joel is a Principal at Frontier where he is responsible for developing, analyzing, and executing investment opportunities, and is instrumental in leading the firm’s day to day operational processes. He was recently the Vice President of Finance & Strategy at LURHQ, a leading provider of managed IT security services, where he was responsible for all financial, strategic planning, legal and HR operations. Prior to this operating role, Joel was with Frontier Capital where he was instrumental in the successful deployment of Frontier Fund I. In addition, he was a Senior Financial Analyst with investment bank Lloyd & Company. Joel holds a BA in Economics from Duke University and an MBA from the Darden School of Business at the University of Virginia. Joel is also a CFA charterholder.

Comedy Break Lyrics:

Featuring “Hooked up with a Bigfoot”, by Robert Lund, sung to the tune of Billy Joel’s Big Shot.  Even though they didn’t find Bigfoot in the North Georgia Mountains, we’re still holding out hope.  Enjoy!

Well -
You left Georgia riding in your Cherokee
Into Blue Ridge National Park
You stopped for drinks with the bulky brunette
That you met in the dark
Ooh -
But when you wake up in the morning with your hair on fire
And you’re tied face-down from a tree
You know it’s no urban legend
The same thing happened to me

‘Cause she turned out to be a Bigfoot creature
You should have known from how she growled
She’s definitely a Bigfoot creature
‘Cause your limbs are all yanked out
You had to stay till last call last night
That will teach you to get plowed
You thought you’d met a tall babe – not quite
You hooked up with a Bigfoot last night
Oh no!

So -
You went chasing tail on the Blue Ridge Trail
‘Cause the women seemed aggressively game
Like the Chattahoochee mama with fangs
Who just grunted her name
Ooh -
But now you just don’t remember all the things she did
And you ask why it hurts when you cough
I’ll give you one hint, buddy
Your Jeep ain’t all she ripped off

No no no no no no you didn’t believe in Bigfoot, didja?
She seemed abominably endowed
Undoubtedly a Bigfoot creature
Her perfume was Rainbow Trout
You almost had your last rites last night
Got Sasquashed into the ground
You’re covered with a rug burn – shag type
You hooked up with a Bigfoot last night
Oh no!

So, baby, have you ever considered laser hair removal?
Or there’s always waxing.
Or you know, you could always just borrow my razor….

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.  You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Underground by Roadside Attraction
• Hooked up With a Bigfoot by Robert Lund
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to Joel for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

Scott hops behind the wheel of the bus and plows over some silly entrepreneurs who just can’t seem to practice the fundamentals.  At the end of the podcast, we drop a tease on a new type of event we are planning for 2009. Another batch of your emails and a musical ballad that speaks to the impact of offshoring jobs round out another great show. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us your elevator pitch for the Georgia Department of Economic Development
• Please give us your elevator pitch
• How did you hear about StartupLounge?
• Why is startup/venture entrepreneurship important to you and to the state government?
• What is your assessment of the Georgia startup/venture environment?
• What is a realistic role that you think the government can/should play in encouraging entrepreneurship?
• What are some programs that the GA Dept of Economic Development is supporting to promote entrepreneurship
• Are there any programs in the works or changes to existing programs that you’re excited about?
• What is your position on SB 80 that would allow Georgia public pension funds to be invested in venture capital funds?
• Why has SB 80 been so hard to pass (the bill that would allow Georgia to join the other 49 states in investing small portions of its pension fund into alternative class investments such as venture capital funds)?
• How is the current economic environment changing your thinking or program implementation?
• Have any programs been curtailed or cut because of budget constraints arising from the current economic environment?
• How do you balance the needs of Atlanta with the needs of the rest of the state?
• If you had to choose one thing to change in the environment, what would it be?
• Are there any programs in other states you would like to emulate?
• Where would you like to see Georgia in 5 years in terms of being a home for entrepreneurship?

Listener Emails Read and Answered on the Show:

Barry: I love the StartupLounge way and our podcast has a permanent home on my playlist.  Keep up the good work!  My question is this:  I have recently begun a new startup venture, but do not yet have a “business plan”. I don’t have any investors yet.  I have seen lots of business plan templates, and many of them have lots of things that are not really relevant to me at this stage in my venture (since I’m still just in the idea phase really).  When is the best time to really sit down and flesh out a full plan?

GT2008: I have what I think is a really great idea and am beginning to get serious about it.  The play is basically an open source software play, with a business model around the platform.  What are some of the business risks of an open source company that I should be aware of now at this stage of my planning?

Ari: Thanks for your efforts at StartupLounge!  I love what you are doing and it has been a huge help to me.  I am an Israeli-American, and am working on a new startup of my own.  I am considering approaching the American-Israeli Chamber of Commerce to see what help they can provide.  My venture will be U.S. based, and won’t send any jobs back to Israel, but I am wondering if this will factor into my discussions with them.  Any advice?

MarkF: Hopefully you guys can help me, because I am pulling my hair out on this. I have a new startup that I am working on that is a SaaS model.  I am really struggling with where to set my price points.  My competitors are in the market with a very low price point.  If I use a comparable price point, I won’t make enough cash flow to survive in the short-term (because I am bootstrapping while working for someone else right now, and I’m having to pay people to work for me on the side). If I charge too much, I’m worried obviously about the adoption rate.  Thoughts?

Guest Bio:
Kenneth C. Stewart, Commisioner, Georgia Department of Economic Development

Commissioner Stewart was appointed to his post as Commissioner, Georgia Department of Economic Development, by Governor Sonny Perdue in January 2007. As chief marketing officer for the state of Georgia, he leads Georgia’s efforts to recruit new businesses and expand existing ones; grow the state’s tourism, international trade and entertainment industries; and support the growth of small businesses and entrepreneurs.

Mr. Stewart joined state government in September 2004, when he was appointed director of the Georgia Forestry Commission (GFC), where he focused the agency and the state’s 24 million acres of forestland on new markets and products such as biofuels, as well as niche and specialty products.

The majority of Mr. Stewart’s career was in private industry. He served as vice president of Unisource Worldwide, Inc., where he led the company’s south-central sales and distribution division in addition to its retail and specialty manufacturing businesses. He also held several management positions at Georgia-Pacific, including director of enterprise development, senior director of strategic planning and analysis of G-P’s distribution division, and director of state and local taxes. Mr. Stewart also worked for Weyerhaeuser Company and Mississippi Power & Light.

Commissioner Stewart is a member of the State Bar of Georgia, holding a Juris Doctorate from the Woodrow Wilson College of Law in Atlanta. He earned a B.S. in Business and a B.S. in Forestry from Mississippi State University, and he is a Registered Forester. Mr. Stewart also served as a company commander in the Army National Guard.

Present and previous affiliations include Board of Directors Chair for the Georgia Centers of Innovation, the Georgia Tourism Foundation and Governor Perdue’s Growing Georgia Cluster group of state agency heads. Commissioner Stewart serves on the boards of the OneGeorgia Authority, the Georgia Environmental Facilities Authority, the Georgia Chamber of Commerce and the Georgia Development Authority. He is a member of Georgia Tech’s Board of Advisors and the CDC Foundation’s Atlanta Advisory Council. Mr. Stewart is past Board Chair of the Georgia Justice Project and was a member of the Governor’s Energy Policy Council.

Comedy Break Lyrics:

Featuring “Take my Job Away”, by Project Sisyphus, sung to the tune of Berlin’s Take My Breath Away.  A hilarious look at offshoring/outsourcing in a bad economic climate.  Enjoy!

Watching all the want ads, padding out my resume
Wishin’ I had got that discount online MBA
Rumor mill is turning, labor’s cheaper in Norway
Lawyers filing motions, hoping they can find some way (to)

Take my job away…

(I’m) such a workaholic—how could they send my job offshore?
Always in by ten, sometimes I stayed as late as four
Except for four-day weekends and random ethnic holidays
Now some dude named “Gunnar” got my manager to say:

Take my job away…

Umlaut-guy won’t have my knowledge
of YouTube video
or my B.S. from that classy college
where they filmed “Don’t Tase Me, Bro”
And I taught the CEO
Super Mario™

Take my job away…

Security escorts me out so I don’t make a scene
Stuffed my clothes with pens, some post-its and a fax machine
Ate up all the donuts, sued for months of severance pay
Prayin’ I get sick, ‘cause medical’s on them ‘till May

Take my job away
Take my job away…

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.  You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Neolith by Kevin MacLeod
• Take My Job Away by Project Sisyphus
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to Commissioner Stewart for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!

The bus is back and ready to rumble with Mike at the wheel – this time, he plows headfirst into entrepreneurs who seem to think that circumventing AngelLounge and trying to get us to champion their deal is a good idea.  FAIL!  Mike also segues into a nice monologue on the angel perspective of the current economic downtrend.  Some great listener emails, a musical tribute to the $700B government bailout, and a sprinkling of StartupLounge humor round out another great show. Enjoy!

Sponsors for this episode:
Be sure to click the logos below and visit our sponsors – without them, we simply couldn’t do all of the things we do.

Shownotes and Interview Questions:

As usual, we had lots of related follow-up questions and side discussions, but here is a good sampling of the questions we asked on the show:

• Give us your elevator pitch for Tech Operators
• Tell us about your recent closing of a new fund
• Was it hard to raise this fund, given the economic climate?
• You’ve raised a virgin fund, which is very hard to do.  Why do you think you were so successful where many others have failed?
• What is the story you tell potential limited partners that excites them about investing in Georgia and the Southeastern US?
• Do you anticipate a great deal of competition for deal flow?
• When will the fund begin investing operations?
• You have four people on your founding team.  Have you identified particular strengths and roles?
• A lot of people have a view that Atlanta VCs, don’t have much of an interest in seeing true early-stage companies.  Their perception is that most regional VCs have moved upstream to more emerging growth type deals.  Are you observing something similar?
• When you receive an opportunity and you’re inclined to pursue it, what is your process for examining that opportunity?
• There seems to be a lot of venture fund raising activity here in Atlanta – some existing venture players that have been dormant for a while are raising new funds (e.g. Kinetic, Noro-Moseley), and several new funds are in the works.  From your perspective, is this a positive thing for Atlanta or a negative thing for TechOperators?
• Recently, there was some commotion around the notion that some regional/local VCs are “spreadsheet jockeys”, meaning they tend to invest based on analytics and business models rather than a simple opportunity to create value in the marketplace without necessarily having an easily illustrated business model firmly in place. What is your take on this?
• On average, how long does it take to get you from that starting point to an agreement on an investment?
• What is the best way to get an opportunity in front of you?
• How many opportunities do you expect to look at each year and how many investments do you expect to make in a given year?
• When dealing with you guys, what’s one thing that’s an absolute no-no?
• How involved do you plan to be day to day with your portfolio companies?
• If you were to “sell” yourself to an entrepreneur to take you on as an investor, what do you think is your biggest selling point?
• What is a piece of advice you would give to new early-stage investors?
• If you could change something in the environment or ecosystem to make your job easier, what would that be?
• What’s your overall assessment of the Atlanta early stage market? Is it improving, and if so, how do you see that?
• If you were to give one piece of advice to entrepreneurs that might want to approach you for capital, what would that be?

Listener Emails Read and Answered on the Show:

jswanson: Hey guys, love the show.  I have a quick question for you this morning.  I am contemplating raising a small round of angel financing for a new software startup.  I am concerned about the current market conditions and I’m wondering what you’re seeing out in the angel sector.  What can I expect to see in terms of angel interest, activity, and ultimately valuation?

Patesh: I have a strange cap table problem that I’m hoping Mike can help me with.  I am losing a co-founder due to his personal medical situation.  Currently, he owns 30% of the company.  I need to find a replacement for him, and will need to give the new guy an equity stake.  The guy I’m losing knows that I’m going to want to reduce his equity stake to some extent, as its only fair. Any suggestions on how best to tackle this?  Do I just suggest a number and work it out with him, or is there a better way?

Sam: Greetings guys.  I am very interested in starting up a new video game studio here in Atlanta, primarily because I’m from here, but secondarily because I’d like to take advantage of the generous tax credit incentive from the state.  Even though we have a nice incentive here to build this type of company in Georgia, we don’t seem to have a lot of investors in that sector.  Any tips?  Can I convince an outside investor to invest in this deal, and allow me to stay in Georgia?

Carmine: Scott and Mike, I love the show, it has been a huge help to me.  I visit the StartupLounge site daily to see if there are new episodes posted.  Please keep it up!  I am curious about one thing, though. How do you guys find the time to do these podcasts, blog posts, speak at various events, and hold really cool events like PitchCamp and CapitalLounge?  From what I gather from your bios, you both have day jobs.  How can this be?  Have you secretly invented a cloning machine?  If so, tell me where I can get one!

Guest Bio:

Glenn McGonnigle

Glenn McGonnigle is a founding partner of Tech Operators, a new venture capital firm in Atlanta focused on early-stage technology ventures. McGonnigle was most recently Chairman and CEO of Atlanta-based VistaScape Security Systems, a leading provider of enterprise intelligent video surveillance software. McGonnigle was recruited by the company’s board to raise capital and grow the business. He subsequently oversaw the successful sale of the company to Siemens Building Technologies. An authority on IT and physical security convergence and a frequent contributor and expert speaker for numerous industry publications and events, McGonnigle helped shape President Bush’s 2005 National Strategy for Maritime Security.

Previously, McGonnigle was a co-founder and top executive of Atlanta-based Internet Security Systems (ISS) where he helped raise initial venture capital and launch the business. For 7 years, he led the business development team in developing sales channels and entering the managed security services market. During his tenure, the company grew from startup to revenues of over $225 million and was recently acquired by IBM for $1.5 billion.

Prior to ISS, he was President and co-founder of Data Integrity Services Corporation, an early-stage provider of WAN-based data management services. Throughout his 24 year career, McGonnigle has remained focused on emerging technologies and has held a variety of sales and marketing executive positions during the high growth stages of EMC, Epoch Systems, Borland, and Wang Laboratories.

He is an active member of the Technology Association of Georgia (TAG) and sits on the advisory board of Georgia Tech’s Tennenbaum Institute. In addition, he has served as Entrepreneur in Residence and CapVenture coach supporting Georgia’s Advanced Technology Development Center (ATDC). McGonnigle holds a BS in mechanical engineering from the University of Virginia.

Miscellany:

Enjoy! To play it, use the tools at the top of this post – you can play it via the embedded Flash player by pressing the big play button at the top, or download it to play on your computer or MP3 player.  You can also take advantage of our iTunes feed.

Podsafe music used within this episode:

• Neolith by Kevin MacLeod
• 700 Billion Dollars by Steve Goodie
• All the Money in the World by Hutch

Our format is a little out of the norm as far as podcasts go. We treat our efforts as a true “show” rather than a super-concise (limited) vehicle for delivery of information. Therefore, the podcasts can run a bit long (actually, it is largely driven by the guests and their responses.) While we try to have very substantive discussions, we also try to have a lot of fun along the way (and that tends to elongate the programming a wee bit.) Our theory is that if we are having fun during the show, hopefully, you will be having a little fun listening as well.

Here is the breakdown for the show, in case you want to hop around.

A special thanks to Glenn for coming in and hanging out with us!

We welcome your continued feedback as well! If you have an interest in appearing on the show, becoming a show sponsor (hint, hint), have some suggestions for topics, have feedback, or would just like to email us and tell us to “shove off”, we invite you to contact us.

Enjoy!