Back in April, I was driving home from an all-too-rare vacation, obviously thinking about work and ignoring the faint dialogue of the 20th in-car showing of Despicable Me when I got hit with inspiration.
Build a machine that would allow me to shrink and steal the moon.
No. The next night would be that month’s ExitEvent Startup Social, and I decided to take the last-minute liberty of putting up a poster board and handing out sharpies, asking for everyone to list, modify, or agree or disagree with the top three things our Startup Ecosystem needed.
I use that capitalization ironically, for the record.
The next night, we had in the room almost 200 of Durham, Raleigh, and the surrounding area’s entrepreneurs and investors, established and manually verified. They included founders, management, and team members at most of the well-established multi-million-dollar raisers (your iContacts before they sold, your Automated Insights, your Appias, etc.) all the way across to a handful of newcomers, like the groups from Duke’s InCube incubator, the Carolina Challenge, the new class at Triangle Startup Factory, and the created companies from Triangle Startup Weekend (which had been held over the three previous days).
Also VCs and a few angels.
I made sure almost everyone got a turn with the marker at the board. The response was enthusiastic and, as unscientific as the process was, I believe it was as scientific as possible while still honestly interacting directly with the founders themselves and getting them out of their bullshit zone.
And I know I just said “top three,” but there were actually four, since three and four were virtually tied in terms of the number of people who agreed. You’re only getting two, because this is already too long and I need to save the other two for another article:
1. More Options for Seed and Early Stage Funding
Obviously, money and access to it is always going to be at or near the top of the list, but to just brush this off as yet another call for more local VC funding would be careless.
Certainly, just about any entrepreneur is going to long for more local investments by local VCs, but there are a couple of caveats. First of all, some already do and some don’t, but the ones who do usually look for new companies from repeat entrepreneurs, or at least veteran entrepreneurs. That’s just the nature of being a VC who is not in a major startup center, but is in tune with the area where they’re located.
It’s a competitive advantage, so to speak.
Recent local company/local VC early-stage raises like the KnowledgeTree raise should be celebrated when they happen, but those are always going to be the exception, not the rule.
Thus, today’s early-stage entrepreneurs are finding what they need in angels, accelerators, out-of-state VCs, and in rare cases for high growth tech startups who wish to raise institutional capital down the road, crowdfunding.
This trend will continue until the next big step in the entrepreneurial evolutionary cycle, which will either be next Tuesday or 20 years from now. In the meantime, here’s what to do:
a) Promote local startup successes and initiatives to get more out-of-state VC eyeballs on the area.
b) Find ways to get the local angels more involved in the startup community.
c) Create new angels within the local community via education and outreach.
d) Get entrepreneurs to start thinking about their first customer rather than their first raise.
2. More Opportunities for Access, Advice, and Mentorship from Successful Entrepreneurs
Another ask that goes without saying, but there’s a twist here too. And that’s the chicken and egg conundrum of leaning on the successful entrepreneurs to make more successful entrepreneurs in an area where there aren’t any successful entrepreneurs.
Yeah, I just blew your mind.
In the Triangle, our current point in the aforementioned entrepreneurial evolutionary cycle has us creating new companies at an amazing clip. By the time you finish reading this, a dozen new startups will have entered stealth mode.
But there are maybe a handful of entrepreneurs with a successful exit, and of those, none are in the Facebook multi-billion-dollar range. Thus, they’re all pretty much hard at work building their next company.
How many early-stagers are they going to mentor at a time?
If we’re all waiting for local entrepreneurs with big successful exits to light the way, a lot of us are going to be waiting a long time. And like the VCs, those entrepreneurs are probably most likely helpful to and thus most willing to work with more mature startups, not early-stagers.
But define success.
I believe that in order for the mentorship cycle to come together here, entrepreneurs from the currently funded and currently customer having startups are the ones who need to be working with the early-stagers. We’ve got our share of those, and I can tell you they are willing to help and in a lot of cases already helping.
All that effort being spent on figuring out how to get the biggest name in the room should be spent getting a dozen medium-sized and hardworking names in the room. Sure, they’re busy too, but the advice isn’t as complex and usually situationally specific.
In other words, it might be a five-minute conversation to solve an immediate problem at a pre-determined time and location.
Ugly self-promotion aside, the point is that both of these wishes can be granted now, and they may not be the textbook solution, but any successful entrepreneur will tell you that you’re better off not worrying about it and just working with what you’ve got.