As I was in line get into the first Startup NC meeting since the kickoff back in August, I wound up in front of an entrepreneur with whom I had been having some conversations about seeking their Series A round. The good news was that they were about 2/3rds of the way to the finish line and it looked like it would close shortly. The bad news was that it’d been as painful as could be expected.
But any time you go raise here, it’s painful. Comes with the territory.
Talk turned to the much-hyped Series A Crunch — in which all these newly-minted angel and org-supported early stagers were flooding the waning sources of VC money, resulting in, theoretically I guess, a whole lot of seed-funded startups not being able to get to the next level and thus closing up shop.
My view on this, I told him, is that first of all I didn’t think the carnage was or would be as bad as predicted. Yes, the Series A Crunch is happening, but a lot of those angel-funded startups were built to get to cash-flow break even on customer dollars as a next step, especially here in the Triangle. So overall, yes, there may be more shutterings in the near future, but not a bloodletting, and the money will still find great entrepreneurs.
The crowd in the room was a solid mix, between 80 and 100. There were entrepreneurs at all stages, from Appia’s Jud Bowman to Adzerk’s James Avery to Archive Social’s Anil Chawla, although it wasn’t overwhelmingly entrepreneur.
The theme was sort of half-checkpoint, half working-meeting, and was anchored by a short speech from Startup America’s Scott Case.
He asked how many people in the room knew more than 10 others, and that was about half. He then asked how many people knew more than 20, and that was a handful. However, this had more to do with the makeup of the room than how connected we are.
Case echoed some of the ideals that are important for maintaining a startup community, things that we all know, but maybe haven’t necessarily been hammered into reality. Successful startups can be attributed to the quality of the network. That network should allow any entrepreneur to traverse the assets of the community. You have to get the entrepreneurs, the founders in particular, to lead.
On a personal note, I had published a lot of those same words earlier that morning, so I felt like at least everyone was reading from the same playbook.
Then the working sessions began. These were meant to identify assets and challenges in the startup community here.
The ideas that came out of that were also pretty broad:
– Create a unified Triangle brand.
– Become the leading startup hub for one or more sectors: biotech, healthcare, education, tech.
– Become the Open Source Capital of the World.
And that’s fine, because this is just a big picture start and because ideas are ideas and it’s the execution that counts. The next step is to get groups of these people working on tangible solutions associated with those ideas.
I’d add that we need to start honing that big picture focus sooner rather than later. I’ll explain.
Both Case and Startup America’s Derek Holt spoke to the fact that Startup America has launched 30 of these startup states, and is now spending more time focusing on seven or eight states that are “about to explode.”
I think, if I have “explode” correct, it means working with these more established startup communities to help the startups make that all-important shove not just from idea to execution, but from execution to successful execution.
Going back to where I started this article, there are a lot of startups, both here and nationwide, with a little bit of runway and not a lot of blue sky. Constructing an environment that fosters the creation of more startups is not where we need to be. There’s nothing wrong with that, of course, but I’d rather see 50 startups with a track record than 500 with potential.
Taking the dreaded Series A Crunch into account, this means either getting from seed to customers or seed to Series A, and the execution should be on making that happen.
I think Startup NC is doing the right thing and I think that meeting was a win. But I’m hoping it doesn’t get lost in the translation. I’ve been saying this since I took my first Startup America call about a year ago, but I think more concrete goals should be:
-Assist entrepreneurs in defining and building products that have an immediate path to customers.
-Campaign for more investors to put their focus on what’s coming out of the Triangle.
-Make it easier for local talent, especially tech talent, to assume some risk in joining a startup.
Startup America and ExitEvent are sort of in the same boat, although their approach is from the nation down and ours is from one startup community (Durham) to the next (Raleigh) and then the next until we get to everywhere else.
So in thinking about where Startup NC is going, I’d ask the same thing I ask with ExitEvent: That more entrepreneurs keep showing up, that they use it as a resource and not a marketing tool, and that the people running it keep their foot on the gas until we’re no longer talking about a Series A Crunch here, but maybe an IPO Crunch or an Exit Crunch.
And yes, ExitCrunch also sounds like to worst thing you could ever read.