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Entrepreneurs’ Special : Is Your Investment Capital Hiding In Plain Sight ?

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(As appeared on Forbes) Editor’s Note : Moira Vetter is founder and CEO of Modo Modo Agency, a full-service B2B Agency headquartered in Atlanta, Georgia. She was the 2014 American Marketing Association Agency Marketer of the year and is a 2015 Enterprising Women Entrepreneur award winner. She licenses The Tech Portal exclusively, for some of her more amazing articles to be re-published from Forbes.

I’m fortunate to live in Atlanta, Georgia, which has a thriving community of innovators, serial entrepreneurs (that reinvest locally), robust universities with incubators, major corporations and ready capital sources.

Not everybody lives here. Not everyone lives in Silicon Valley or New York, but growth entrepreneurs everywhere need capital. Don’t believe that you can’t find capital if you commit to looking in the right places.

Although business, and specifically business press, is frequently concentrated on the successes and happenings in major cities, innovation and financing happens everywhere all the time. Here are some tips on finding sources of capital:

Where did your competitors get their money?

Since entrepreneurs seek financing to grow—and typically to acquire, merge or exit—its helpful to find your capital in the same pool you’ll find your future acquisition target or future buyer. I recently got great advice from serial entrepreneur, Andrew Weinreich, a 7-time entrepreneur who spent a year one time raising $25,000 and also has the rare experience of raising $25M.

After cutting his teeth repeatedly chasing people with money because they were on Wall Street and just because they ‘had money,’ he changed tack and decided to find the “right money.” He put together a list of his competitors, got on CrunchBase to see who was investing in them, and introduced himself.

When you’re looking for large raises, it’s important to find the specialists. People that are not only interested in your competitors, but are investing in them, likely have domain expertise in your space and have a vested interest in elevating the category or growing a collection of potentially compatible businesses. People that actually benefit from investing in you are far more likely to do so.

Who are your hometown entrepreneur heroes (often investors themselves)?

Don’t presume because there isn’t an ‘ABC Capital’ on your Main Street, that investors aren’t making deals at your local diner or Chamber of Commerce. In every town or region there is likely a collection of very successful serial entrepreneurs who stayed in your area because they love it. They are probably invested in the community (literally and figuratively) but they may not run a private equity company. If you can find such a person, particularly one that has had several successes and perhaps a Silicon Valley exit, you may find a dream resource.

These entrepreneurs are very sophisticated in that they know how big deals are done, but they are more connected to you because they chose to live in your backyard. Make yourself known to these people and their friends. They hang in packs, often have investments in 2 or 3 local companies and they share leads and investments with one another. One such investor here in Atlanta is Dr. Paul Judge. He does an amazing job of creating businesses, and creating a culture of innovation and possibility all around him. Who is your Dr. Paul Judge?

Who is the largest Fortune 500 or technology company is your region?

People are always focusing on large corporations for jobs and for corporate citizenship, but they rarely think of them as investors. Increasingly, those large companies have active R&D operations in conjunction with universities or startup communities. A constant challenge to large corporations is staying nimble and retaining an entrepreneurial spirit within their business units. Many of these large companies are creating space within their corporate headquarters to co-locate startup entrepreneurs or they are creating a collaborative space onsite at a university or incubator. Examples here in Atlanta are the corporate residents at Georgia Tech’s Technology Square, such as AT&T Foundry.

The companies that invest in these types of spaces are not simply hoping that entrepreneurial dust will rub off on their employees or researchers. They are in these spaces to uncover new ideas, new entrepreneurs, invest in them or buy them. What is the closest thing to a Technology Square in your area and who is the largest Corporate resident. Find out whether the company has a new ventures group and build your network around the investors and entrepreneurs that lead those groups. Whereas banks may see risks in investing in something new, large companies cannot afford to stop investing in the next startup that might be nipping at their heels.

As Andrew Weinrich told me, you can set up a few hundred meetings with the people that advertise their capital, or you can get smart and focused about the people and organisations that represent a win-win in terms of capital and innovation. Follow the same rules as smart salesmen; don’t follow the crowds to the obvious places for capital. Start looking in the areas where quiet, motivated money is waiting for you.


 

Contributor | Founder, Modo Modo Agency, Greater Atlanta, US


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