On Wednesday, October 30, Hines Atlanta hosted a venture capital session of its “Catalysts for Growth: a Game Changing Conversation” speaker series. During the hour-long session, panelists spoke about Atlanta’s positive qualities for technology startups and how the city compares to others with booming technology sectors.
Moderated by John Heagy of Hines Atlanta, participants included Alan Taetle, general partner, Noro-Moseley Partners; Bernice P. Dixon, president and chairman, Atlanta Technology Angels; and John C. Yates, partner-in-charge of technology practice, Morris, Manning and Martin LLP.
“When I lived in DC, the notion of Atlanta was, well, they talk a little slower, they do business a little slower and you have to talk about their parents before you do any business,” said Dixon. “When I moved here I learned that these were not stereotypes merited to the new Atlanta.”
Among many positive attributes, panelists agreed that the quality of Atlanta’s workforce makes the city a prime location for tech startups.
“We’ve got fantastic universities from a technology perspective, and surprisingly good management,” said Taetle. “We have a long DNA of high growth companies in the tech software world that we draw and will continue to draw on and those are the core attributes.”
Yates added that highly educated, talented individuals tend to draw more talented people to a region, creating a concentrated population that promotes entrepreneurial activity.
The city’s low cost of living also enables young professionals to comfortably live in the city.
“I spend a lot of time in San Francisco and one thing I found is that it’s really expensive,” said Yates. “I think the ability to have affordable housing and affordable rental opportunities for young people really is key and you have that in Atlanta.
Hartsfield-Jackson Atlanta International Airport was highlighted as a key asset to the city, not only enabling financiers to travel in and out of the city with ease, but also providing the logistical backbone for future growth.
“Atlanta is in a great position as a transportation hub and as a logistics center, with UPS here, spawning a lot of businesses,” said Dixon.
Panelists noted that other entrepreneurial “hotbeds” like Silicon Valley, Boston, and Northern Virginia areas are crowded with investors. Conversely, the Atlanta community was described as underserved and undercapitalized.
According to Taetle, 90 percent of capital for startup businesses in Atlanta is from out-of-state. He conceded that more local capital is needed to bolster the startup community. “It sure would be nice to have a bit more local capital, because it tends to be earlier and you know the people a little bit better,” he said. “Also the local corporations provide some connectivity which makes it frictionless. It would be great for it to be less than 90 percent.”
While it is easy to draw parallels to Silicon Valley, panelists cautioned the desire to emulate the region famous for technology.
“There is a certain alchemy there that people haven’t come close to replicating,” said Taetle. “From a talent, capital and education perspective, so much is concentrated. It’s been working for 30+ years. For us to say ‘hey, we need to be that’ is kind of quixotic.”
New opportunities like crowd funding also provide companies with additional avenues for bringing in capital. The state is just one of two in the union to allow residents to invest up to $10 thousand a year in Georgia companies.
Still, there is more work to do to bolster the technology startup community.
“I do think we have a PR image we have to improve on,” said Yates. “We’re a unique community but I think we can do a lot by looking at the PR side and push a lot more about folks like David Cummings and the Atlanta tech village. That’s’ what our state should focus on.”
A recording of the panel can be viewed at www.hinesatlanta.com.