Welcome to SL #30! Catalyst Magazine recently hosted a panel on “Raising Capital” at The Vinings Club here in Atlanta. The panel featured Greg Foster (Noro-Moseley Partners), Brian Patrick Cork (Brian Cork Human Capital), and Braxton Jarratt (CEO, ClearLeap). Catalyst asked StartupLounge to moderate the panel, which we were more than happy to do. We were angling for a “dual moderator” format, where Scott and Mike could take pot shots at each other all night, but sadly, with only a 45 minute session, we decided that one moderator would be a better format (in the interest of time). Sadly, the crowd got stuck with Scott moderating.

It’s the million-dollar question. Whether your company is encountering consistent annual revenue growth, or you’re just tired of bootstrapping your start-up, how does an entrepreneur find capital to grow a small business? On September 11th, Catalyst magazine is proud to present a featured panel of experts who will guide you on understanding how to find funds in this tough economic climate. Learn from local entrepreneurs who have raised millions of dollars in recent investment rounds. Find out from top local investors what they perceive as a bankable business.

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.

Sample Panel Questions:

• Introduction by Drew Ermenc, Associate Publisher and Editor, Catalyst Magazine
• A lot has been written on the challenges of raising early-stage capital in the Atlanta market. Can you give us your view on where we were say 5 years ago, where we are today, and what the future holds here?
• What makes up the criteria for a good deal from the regional VC perspective?
• What are some of the biggest mistakes entrepreneurs make when looking for capital? Any particular big No-No’s?
• ClearLeap is a rising star in the Atlanta technology sector having just raised a $9M outside round of capital. Atlanta certainly has its challenges when it comes to early-stage capital. What were some of the biggest challenges you faced in raising capital for Clearleap?
• Many entrepreneurs are great at building innovation, but not great at building relationships. Could you speak on the importance of relationships and networking within the investment community and how it might benefit those looking for investors?
• Before you joined Noro-Moseley Partners you did “strategic venturing” at Turner Broadcasting. Is this a viable path for early-stage companies, and what does that process look like from the entrepreneur’s perspective?
• Braxton, your last round of funding was a $9M raise. You had a mix of investors in on the deal – the deal was co-led by Noro-Moseley Partners here in Atlanta, and Trinity Ventures on the West coast. You also had participation by Sig Mosley (Imlay Investments) and Jim Chiddix, the former CTO of Time Warner Cable. Was there a difference in the process, expectations, etc, between angels, the West Coast venture capital and the East Coast venture capital? How did you bring all of these folks together to do the deal?
• Mitch Free, founder of MFG.com and the Catalyst November speaker, recently told Drew (and StartupLounge.com podcast listeners) that his best advice would be to “keep your head down, build your business, grow your business and the money will come to you.” Would you agree or disagree to this?
• It is my view that a lot of deals that get passed on could be better deals with some tweaking on the part of the entrepreneur. What should entrepreneurs do to make their companies attractive to A) Angels and B) Venture capitalists? Are there some things they can do to make their deal a “cleaner” one for outside investors?
• Investors have the luxury of seeing lots of deals through the course of their work, and they are very selective in their investments. In your view, what made Clearleap stand above the rest of the pack?
• What parting wisdom do you have for entrepreneurs out there seeking to raise capital from investors in the Southeast?

Questions from the Audience:

Q1: How does social media play into raising capital?

Q2: I have a ten year old company. What is the opportunity for an established company to raise capital in Atlanta?

Q3: How do entrepreneurs get an opportunity at networking events to meet investors, and how much time should they expect to spend with such an investor?

Panelist Bios:

Brian Patrick Cork

Brian has been a highly successful executive and entrepreneur; is a popular public speaker; Professional Athlete; and, an accomplished Executive Recruiter and Business Coach.

Brian Cork has raised over $500 million dollars in private placement capital for a wide array of companies across every industry; recruited and counseled hundreds of executives and other decision-makers; and, has actively participated in building dozens of successful organizations.

As an Executive Recruiter, Business Coach, and “Trusted Adviser” Brian Cork is a vital resource for decision-makers in terms of making better decisions. On any given day, Brian Cork speaks with and shares ideas with influential people ranging from Politicians and Educators to Fortune 50 Executives and Entrepreneurs. His Executive and Business Coaching Clients include top executives in Fortune 50 companies to professionals in transition.

Brian Cork was named to London’s prestigious “Ol Man Society” for his contributions as a businessman and philanthropist – and, his well-balanced approach to life. In addition, Brian has been selected by Catalyst Magazine as a “Top 25 Entrepreneur”, and Great Britain’s G2 economics as a “Coalition Member of the Year”.

Greg Foster:

Greg joined Noro-Moseley Partners (NMP) in 2008 and has focused his investment activities in technology with an emphasis on digital media. Greg is active with several NMP portfolio companies and currently serves as a board observer for ClearLeap.

Prior to joining NMP, Greg served as Vice-President of Corporate Development for Turner Broadcasting, where he was responsible for Turner New Media Investments, the company’s early stage strategic investment arm, as well as M&A activities. Greg joined Turner after it acquired his company, Southern Direct, a business focused on building branded e-commerce extensions to linear cable channels. In addition to founding Southern Direct, Greg has been a member of the management team of two other successful start-ups, serving as SVP of Corporate Development at iXL Enterprises and VP of Business and Corporate Development at Silverpop Systems. He began his career as a consultant at Deloitte Consulting, where his efforts were focused on building internet strategies for clients including Prudential Insurance, Sonoco Products and the New York City Transit Authority.

Greg is the chairman-elect of NVCA’s Corporate Venture Group Advisory Board and is a member of the Board of Trustees for the Georgia Council on Economic Education. He holds a Bachelors Degree in Mechanical Engineering from Georgia Tech, where he was a President’s Scholar, and an MBA from Harvard Business School.

Braxton Jarratt

Braxton has driven innovation and growth in senior management roles with technology and media companies large and small, most recently as Senior Vice President of Marketing and Business Development at Tandberg Television (an Ericsson Company), the world’s largest supplier of digital television systems. At Tandberg, he led the rapid expansion of the company into the North American television market and video on demand (VOD) software business, building a world-class customer base of leading television operators and programmers. He launched and secured the initial key customers for Tandberg’s pioneering dynamic VOD advertising system and led the complete overhaul of Tandberg Television’s brand after completing three key acquisitions in less than a year. Braxton joined Tandberg through their $120 million acquisition of N2 Broadband, a venture-backed television software startup, where he was responsible for product management, marketing and business development. There, he helped win deployments of the company’s on-demand software products in more than 100 cities and in nearly every VOD site in North America.

Braxton previously worked at Cox Enterprises as director of product strategy for the cable division and GM in the interactive media division, where he launched the first broadband internet content service in partnership with @Home. Braxton’s first tech startup experience was as the head of commercial services with Primenet, an internet startup purchased by GlobalCenter.

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

Thanks to Brian, Greg, and Braxton for adding enormous value as panelists – and thanks to Drew Ermenc and the gang at Catalyst Magazine for putting this event together.

Enjoy!

Another group of pathetic entrepreneurs get tossed under the bus … firmly. 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 – 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 Noro-Moseley Partners
• Tell us about your recent closing of a new fund
• 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 would a legislative bill like SB-80 help a fund like Noro-Moseley?
• Do you have meaningful competition for deal flow?
• Could you highlight a success story of which you’re particularly proud?
• What’s your take on Appcelerator’s departure from Atlanta?
• A lot of people have a view that Atlanta VCs, like NMP, 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. Can you clarify NMPs position in this area?
• Greg you recently made the move from working in corporate venture capital with Turner to a traditional venture capital firm. What challenges did you face in making that change, and how are you finding the transition?
• 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), and several new funds are in the works. From Noro’s perspective, is this a positive thing for Atlanta or a negative thing for Noro?
• Recently, there was a big flap in the Atlanta blogging scene 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 NMP’s view 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 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 or ecosystem to make your jobs 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:

Myhsar: When attending an event with potential angels, which “30 second” pitch do you start? The first being the actual product or service that your company provides or second the potential investment numbers and potential roi? Also, should one have a tri-fold brochure or fact sheet that one leaves with the angel?

Ben: I recently launched an online community/social network that I thought was in a very niche field. After doing some research it appears that there are several other sites out there that cater to a similar audience. Any ideas on how to make an online community stand out from the competition? And second, any thoughts on some ways to monetize an online community?

Carolyn: I recently took the plunge and started my own venture. I have someone who might be willing to invest in my startup, but they want a seat on the board. What are the pros and cons of taking capital early on and giving up a seat on the board?

Fiberman: Great podcast guys! I really enjoy the content and the back and forth. Here is my question; I have what I think is a great idea for a tech startup. Unfortunately, all of my experience is in sales and marketing, and while I’m technically literate, I can’t do software development. How can one find programmers to work on a startup idea, who is willing to work for nothing in exchange for a piece of the action? Thanks in advance!

Guest Bios:

Alan Taetle:

Alan Taetle joined NMP in 1998 and has focused his investment activities on software and information technology companies. He currently represents NMP on the boards of Abaco Mobile, BroadSource, Clearleap, M1Global, SecureWorks and Vocalocity, and oversees one other investment, Damballa. Alan was previously a director or observer for several prior NMP investments, including Adjoined Consulting (sold to Capgemini), OpenSite Technologies (sold to Siebel Systems), CipherTrust, Inc. (sold to Secure Computing), and PRE Holdings (sold to First Data).

Prior to joining NMP, Alan was the Executive Vice President of Marketing and Business Development for MindSpring (which merged with EarthLink in 2000). Alan joined MindSpring as its 13th employee in 1995, and oversaw the company’s subscriber growth from 4,000 to over 325,000 in just three years. Prior to MindSpring, Alan served in various systems and product management roles with CogniTech Corporation, makers of contact management software; Itochu International, a Japanese trading company; and Electronic Data Systems, a systems integration consulting company. Alan is a previous board member of ChoicePoint, Inc., a NYSE company (sale pending to Reed Elsevier) focused on providing information that helps companies make educated, intelligent choices to reduce risk and fraud.

Alan is a past Chairman of the Florida Venture Forum and serves on the board of both the Florida Venture Forum and the Atlanta CEO Council. Alan serves the co-chair of the Board of Trustees of the Cliff Valley School, a non-sectarian independent school in Atlanta. Alan received a BA from the University of Michigan and an MBA from Harvard Business School.

Greg Foster:

Greg joined NMP in 2008 and has focused his investment activities in technology with an emphasis on digital media. Greg is active with several NMP portfolio companies and currently serves as a board observer for Clearleap.

Prior to joining NMP, Greg served as Vice-President of Corporate Development for Turner Broadcasting, where he was responsible for Turner New Media Investments, the company’s early stage strategic investment arm, as well as M&A activities. Greg joined Turner after it acquired his company, Southern Direct, a business focused on building branded e-commerce extensions to linear cable channels. In addition to founding Southern Direct, Greg has been a member of the management team of two other successful start-ups, serving as SVP of Corporate Development at iXL Enterprises and VP of Business and Corporate Development at Silverpop Systems. He began his career as a consultant at Deloitte Consulting, where his efforts were focused on building internet strategies for clients including Prudential Insurance, Sonoco Products and the New York City Transit Authority.

Greg is the chairman-elect of NVCA’s Corporate Venture Group Advisory Board and is a member of the Board of Trustees for the Georgia Council on Economic Education. He holds a Bachelors Degree in Mechanical Engineering from Georgia Tech, where he was a President’s Scholar, and an MBA from Harvard Business School.

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
• Old Keith Richards by Paul and Storm
• 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 Alan and Greg 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!