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!

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!

A lot of positive things are starting to happen here in the Southeast, so the bus stays in the garage while we talk about some more folks that seem to “get it”. Some great listener emails 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!

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 (Sig and Charlie both gave their thoughts on each question):

• Give us your elevator pitch for Imlay Investments
• Give us your elevator pitch for Paparelli Ventures
• Tell us why you invest in early-stage companies?
• What was the point at which you decided to make investments in early-stage companies?
• 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 is the best way to get an opportunity in front of you?
• How many opportunities do you get exposed to a year and how many investments do you make?
• Is the current economic outlook changing your investment behavior or desire?
• What are the most important changes in the Atlanta investing environment in the last 15 years?
• Do you collaborate with other early-stage investors and if so, how often and how closely?
• 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?
• 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:

Chase: I’m a high school student in Charlotte NC and I really enjoy listening to this podcast. I have a question for you guys. Which would you recommend to someone my age who is interested in being an entrepreneur at some point: working in a big company or joining a startup? I am trying to plot my career path and could use some guidance!

TechSquare: On one of your recent podcasts Mike made a reference to why it might be good to start a business in a down market (i.e. a recession). Can you elaborate on this?

Cevans: I just became aware of StartupLounge and I’m very pleased to see this type of online community right in my backyard. I look forward to interacting as a member. Here’s my question: Are serviced-based companies welcomed amongst VC circles or are product companies king? I do a fair amount of reading/research on start-up ventures and most of the activity, interest, involvement, etc. seems to focus on products. I’ve been an independent consultant/contractor for nearly 10 years and have done well individually, but have always seemed to struggle taking the next step with ideas or concepts for introducing a service to market. Are there any suggestions as to the approach I should take as a service provider? In a nutshell, my company’s focus is on providing new methodologies for data-protection and disaster recovery services for small/medium-sized businesses.

Marcus: I have a philosophical question for you guys. If you were starting up a new company and could draft one person that you know to join you in the venture, who would be your first round pick (and why)? Keep up the great work!

Guest Bios:

Sig Mosley: Sigmund Mosley, Jr. received his bachelor of business administration from Emory University in 1968. After beginning his career with Peat Marwick, he served as a Vice President with MSA Software, and helped grow the company from $2M in revenues to over $330M. Since 1990, he has served as the President of Imlay Investments, the most active early-stage technology investment firm in Atlanta. Sig has helped fund over 100 companies in Georgia, and is a member of the Georgia Technology Hall of Fame.

Charlie Paparelli: Mr. Paparelli is President and founder of Paparelli Ventures, a pre-formation investment company focused on entrepreneurs in the Atlanta technology market. PV has funded over 16 Atlanta startups in the last 15 years. Currently he is the managing partner of his two active investments, iPartners, LLC and Torad Engineering, LLC. Mr. Paparelli has over 30 years experience in the information technology industry serving as entrepreneur, executive, IT Services incubator founder and venture capitalist.

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.

Podsafe music used within this episode:

• Neolith by Kevin MacLeod
• Dead Nintendo 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.

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

A special thanks to Charlie and Sig 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!

Cheers.
Scott

• What the capital market is really like in Atlanta
• What the challenges exist
• How asset allocation works (great if you really want to know what you’re up against)
• How the real estate industry is affecting early stage capital here
• The funding gap
• Everything you could ever want to know about angel investors
• What sources exist?
• How to do due diligence on an angel investor
• What angels really want
• Handling rejection
• How to smoke out “fake” investors
• What “good” angel deals really look like
• Market validation
• How much funding to solicit
• Your pitch
• Deal killers
• Advisors
• Closing the deal
• Typical investment terms
• Capital-seeking “to-do” list
• Some case studies
• Facts of life in the Atlanta startup eco-system
• How we can repair it

If you weren’t able to attend, you won’t want to miss this. Much of his discussion will apply to other areas here in the Southeast as well …

Cheers.

There are a lot of new angel investors out there, as well as many that lurk, but aren’t quite sure where to begin. Well, we’re here to help.

Kudos to Charlie Paparelli (of Paparelli Ventures) for suggesting this idea. Charlie is a very experienced angel investor, and the newest member of our StartupLounge.com steering committee. Sig Mosley of Imlay Investments has also graciously agreed to attend and lend his expertise to the room.

The Angel Lounge – Free Lunch!

Building the startup ecosystem in the Southeast (and in particular, Atlanta) is what the Startuplounge.com is all about. The Angel Lounge is an opportunity for our angel investor attendees to get to know each other and for us to get to know you. Our goal is to “help you help each other” get to the right investment more efficiently. In this open, lounge-like, environment, angel investors will meet prior to the Capital Conference to:

• Meet fellow investors
• Gain an understanding of fellow investor interests
• Discuss the various methods of angel investing
• Learn about the various deal structures and what to expect
• Understand how to best evaluate opportunities while attending Capital Connections
• What to expect in the first meeting outside the conference

More importantly, you’ll get to meet some very interesting people just like yourself. And it is literally a free lunch (compliments of one of our sponsors, Adams Capital). Who knows, maybe someday you’ll do a deal together.

If you are an angel investor in the Southeast, and would like to attend, sign up for Capital Connections, and check the “interested in attending Angel Lounge” box. If you would like to participate in Angel Lounge, but won’t be able to make the Capital Connections event, let us know. The cost is free, but space is limited.

Angel Lounge will be held on Wednesday, January 30th at the offices of Adams Capital in Atlanta. The actual Capital Connections event will be held a week later, on Wednesday, February 6th.

Cheers.