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VC Survey: Not Enough Experienced Entrepreneurs in Georgia

Friday, January 30, 2009

VC Survey: Not Enough Experienced Entrepreneurs in Georgia
http://www.bizjournals.com/atlanta/stories/2009/01/26/daily136.html?jst=m_ln_hl&surround=lfn
Atlanta Business Chronicle

The Pollyannas of Georgia’s technology business might want to skip this one.

A lack of entrepreneurial talent, deal flow and geographic distance are top reasons venture firms shy away from the Peach State, according to a Technology Association of Georgia (TAG) survey made public for the first time to Atlanta Business Chronicle.

The 2008 survey of 156 venture firms in 24 states aimed at gauging VC perceptions of Georgia and comparing venture activity in the state with others. The results will be discussed at a TAG event Feb. 5.

In a finding sure to yank the chains of the local startup community, the survey raised questions about the “adequacy” of Georgia’s management and entrepreneurial talent pools.

Twenty-eight percent of respondents not investing in Georgia said there aren’t enough experienced entrepreneurs in Georgia, and 23 percent said it is difficult to attract management talent to the state.

Atlanta’s entrepreneurial culture has been referred to as “two boats and a Cadillac,” local entrepreneur Ben Dyer quipped.

That reference, he said, implies entrepreneurs in GA tend to make enough to enjoy a nice lifestyle but don’t have the motivation to go beyond that for the big-time success.

“People here enjoy a pleasant climate and lifestyle and tend to have other priorities than market domination, so I think there is some basis to the survey criticism,” Dyer said “However ... there are way more qualified entrepreneurs and ideas than capital to fund them. Sooner or later we’ll find our own Michael Dell who will create an enduring ‘anchor’ company in Atlanta.”

Tom Noonan, local entrepreneur and investor best known for selling Internet Security Systems to Big Blue for $1.5 billion, isn’t buying what the survey is selling.

“There is plenty of management talent in Atlanta and there is a growing number of entrepreneurial talent,” Noonan said. “There might not be lots of people that are 1-2-3-time entrepreneurial success-story writers, but there’s plenty of management talent.”

Survey respondents complained about a lack of investment opportunities. Thirty percent of those who did not invest in the state cited that as their reason for not doing so.

Respondents targeted the state government, too.

Forty-five percent are unsure about Georgia’s entrepreneurial-friendliness and its tax and other incentives. Several suggested state investment in alternative assets — a move the local investment community has lobbied for.

Respondents recommended matching VC funds, creating a state-run seed fund, establishing technology incubators in other regions of the state, and changing Georgia’s expensive litigation process.