The AngelSummit in Twelve Tweets

[Author’s note: Rob Lalka is the Director of Strategy and Partnerships at Propeller, a startup incubator in New Orleans, Louisiana.  He is also a lecturer at Loyola University, where he teaches an MBA course on venture capital.  This article for Southern/alpha was written from the 2015 Angel Summit, where Rob was a panelist on the topic of angel investing and public/private partnerships. ]

This week, the AngelSummit came to Chattanooga, Tennessee.  More than 100 angel investors, entrepreneurs, and experts on startup investing from over twenty states came together for a two-day conference organized by Startup Angels.

We were fortunate to have such a wealth of knowledge and experience right in our backyard, so I took to Twitter to share a few of the most compelling insights.  Here’s what we learned, in twelve tweets:

The conference began with a statistic that showed the tremendous opportunity to expand angel investing globally:

Entrepreneurship is problem solving.  In the first breakout session, both the Case Foundation and 1776 addressed how Silicon Valley’s luminaries have missed the mark when it comes to investing in those who are solving real problems:

TechCrunch’s Andrew Hyde was one of the most popular speakers of the summit.  Here are a few of his brilliant (and entertaining) comments:

And then there was the honest and heartfelt keynote by Scott Case.  He’s the founding CTO of Priceline.com and the former CEO of the Startup America Partnership, so we were all looking forward to learning from his experience.  But after the Angel Summit, everyone gained even greater respect for him – not only professionally but also personally.  In the morning keynote, he announced that his current company, Main Street Genome, was calling it quits.  Instead of glossing over his mistakes, he addressed some hard truths, with candor that is all-too-rare (but oh-so-needed) in the angel investing world.  Here were the lessons he’s learned:

This was a conference that we’ll long remember, and I’d love to keep the conversation going.  Tweet at me at @RobLalka, and be sure to follow these key people from the Angel Summit:

News wrap: Comcast signs on with Nashville Chamber small-biz program, Wells Fargo grants, angel investing numbers

It’s time we pass on some more new tidbits from around the region.

• Comcast Business announced recently it has signed on to be the Innovation Partner for Business Studio, the Nashville Area Chamber of Commerce’s resource center for small and mid-sized businesses. The media and telecoms giant joins law firm Bone McAllester Norton and Civic Bank & Trust as partners and will host an Oct. 20 reception at Refinery Nashville on Houston Street in Nashville. Check out more information here.

• Earlier this month, Wells Fargo announced the five grand prize winners of its Wells Fargo Works Project. Among that group was Global Sanctuary for Elephants of Brentwood, Tennessee, a two-year-old nonprofit that sets up healing sanctuaries for captive elephants. The pilot project for co-founder Scott Blaise and his team is in Brazil. Also a winner is Clean Supreme Inc. of Harvest, Alabama, which markets carpet cleaning, janitorial services and trauma cleanup. Founder Courtney Fitchard plans to use Wells’ donations to add staff and upgrade equipment and learn how to scale her business. Wells Fargo is donating to them $25,000, a six-month mentorship and various banking services.

Venture Nashville’s Milt Capps pointed us to this Angel Resource Institute report detailing some of the regional differences and trends in angel investing. Among the info: The average size of an angel-only funding round in the Southeast has grown by about 50 percent sine early this decade and but the region lags when it comes the size of investments that involve both angels and non-angels. Food for thought as to how the Southeast can continue to build out its funding networks.

FourBridges’ leader, new tech point man on a rising breed of Southern entrepreneurs, upcoming opportunities

The leaders of Chattanooga-based investment FourBridges Capital Advisors earlier this month announced they had recruited Atlanta technology executive Doug Johns to be a senior advisor. Johns is a former senior executives at Internet Security Systems and Compaq Computer, among others, who now is chairman of HDJ Wireless Enterprise, an Internet of Things venture that runs Atlanta-based sensing and control networks company Nivis.

Adding Johns to the team gives FourBridges a much more extensive reach into the Southeast’s tech and telecom sectors, especially in its biggest city. Scanning the region, Johns says he sees opportunities aplenty, especially when it comes to working with companies who need advice and expertise just as much as they need to do a deal.

Johns and FourBridges Managing Partner Frank Williamson recently took some time to chat with us about their news and the entrepreneurial landscape of the Southeast. Here are some excerpts from our conversation.

Doug, how much of time will you devote to FourBridges and what are your main priorities as you get started?
Johns: I’ll spend at least half of my time on FourBridges, making connections with companies around the region. Ideally, I’ll be locating companies with revenue — that really separates the sheep from the wolves — and some level of EBITDA, which will say to me that this is a real company.

Too often, tech companies have a set of PowerPoint slides that can make them seem fabulous but there may not be much more to them than those slides. A big part of my mandate will be not to dig dry holes.

When it comes to young entrepreneurs, particularly in technology, have you noticed a change in tone over the past decade when it comes taking risks and starting companies?

Williamson: Absolutely. Many young people have seen that, if their idea doesn’t work here and now, there’s a chance it will work somewhere else down the road if they keep working on it. There’s more of a California spirit to them now, one that looks at failure as more of a learning experience than a tattoo of shame.

How does that change what FourBridges does?

Williamson: It changes our potential client base. There’s a whole lot more velocity to what entrepreneurs are doing in terms of starting something that they intend to be an asset rather than an occupation. Many more of them are happy to start a business, grow it as fast as possible and exit.

It sounds like you now have to find these entrepreneurs earlier in their careers.

Williamson: Yes, we do. Also, the fact that more people across the South are building companies this way is a testament to the health of the ecosystem. If they build and sell that asset, they’ll then be able to redeploy their cash. For us, that means we need to have something more relevant to say to young companies. We think there is a role for us much like there is for accountants and lawyers. We can help prepare businesses for big growth.

We love the ECD aspect of what we do. It’s my belief that, in three to five years, a lot of the investments made recently in the entrepreneurial ecosystems around the region will be realized. There will be many exits and larger raises. That’s why Doug has come on with us. There are a lot of stories to tell and enough companies are growing into a position where an intermediary like us can be a real help.

Johns: Entrepreneurs’ attitudes to deals also have changed. There was a time when transactions were much more adversarial, more mercantile. Now, entrepreneurs are looking for advisors for a while; they’re not looking for a deal right away.

Younger entrepreneurs are more interested in a relationship. They maybe have heard from their parents stories of when things went bad. They know it’s important to have a relationship, that you need someone who has ideally worked in their shoes.

Rocket Hatch Investor Day brings investors across the South to “speed hatch” with entrepreneurs

Space rockets and shuttles are all great reminders of where actualized imagination and innovation can take the humankind.  Now, imagine being surrounded by those items as you pitch your startup.  On September 10, entrepreneurs will get to do just that when they descend on the Davidson Center at the U.S. Space & Rocket Center in Huntsville to discuss their ideas at Rocket Hatch’s Investor Day.

“We were very deliberate to reach out to as many organizations and partners as possible to make this a very inclusive event. We are very excited about the quality of the speakers and attendees that have committed to participate” said Antonio Montoya, Rocket Hatch co-founder and Executive Director. “This event will allow us to engage in a serious conversation on capital formation for high-growth startups in the State of Alabama.”

The potential investors that will be in attendance to ‘sip and hatch’ — a sort of speed dating/pitching — with these innovators are from all across the South. The list of confirmed attending investors includes: Eric Grigorian from InCrowd Capital, Kristina Montague from the Jump Fund, Larry Lewis from Biztech, Eric Dobson from Angel Capital Group,  Weston Wamp from Lamp Post Group, Alex Lavidge from GIGTANK and Chris Taylor from Fortnum Capital. Other investment groups that will be represented include:  AIM Group, Jumpstart Foundry, The Shoals Entrepreneur Center, Chattanooga Renaissance Fund, and Angel Syndicates Central.

“It is time to join forces and provide a more supportive environment for local entrepreneurs,” said Eric Grigorian of InCrowd Capital. “The Tennessee Valley has tremendous know-how across a multitude of disciplines, each complementing the overall regional startup ecosystem.  Organized regional events, such as Investor Day, provide an excellent medium to connect entrepreneurs and funding resources within the region.”

The event is almost sold out, so register your spot today here.

Rocket Hatch, an open community of creators and entrepreneurs with the mission of supporting the startup movement in the Huntsville Metro and surrounding areas, also hold monthly events for the local starters and creators. So, even if you cannot make it to the Investor Day, North Alabama has many other events coming up to experience their way to engaging the innovative spirit.

Bohan Advertising invests in beacon tech startup bluField

Bohan, a 25-year-old advertising agency, announced last week that they are investing in bluField, a startup company in beacon technology, and that they will use Nashville as the test market for the app.

According to the bluField’s site, they are not a beacon company, but rather  “an interconnected system of Bluetooth beacon networks, which creates a high resolution grid of a real-world geographic area.” BluField’s software integrates the signals into citywide networks to deliver information to consumers on their mobile devices as they move through a city. Once the users download their app, Stroll, it can feed information from existing and supplemented beacons to those visitors when they are near member retail locations. “The Stroll app and the technology behind it provide an innovative, cost-effective way to reach today’s travelers – especially when 70 percent of search and web traffic now occurs on mobile devices,” say Kerry Graham, CEO of Bohan. “The experience is at the heart of all marketing today and we see this investment as a vital way for us to help our clients have competitive advantage.”

Nashville Convention and Visitors Corporation has selected the company as its beacon provider with the Nashville bluField beacon network expected to debut later this summer. And with bluField in talks with other destinations around the country, Bohan’s chairman, David Bohan (also on bluField’s advisory board) is enthusiastic about their investment. “The potential for bluField to grow is substantial, and Nashville’s popularity as a destination makes it the perfect launch pad,” says Bohan.

Perhaps the most interesting part of how this strategic relationship began is that Bohan’s Graham first connected with bluField president John Mark Eberhardt at a LaunchTN networking event. This initial meeting eventually led to a startup investment, a first for Bohan. And according to this advertising agency, they are already planning to make other investments in technologies that help its clients connect with consumers.

The state of Southeast investing

Today at 36|86, a group of investors just shared nuggets of experience and advice on the investing market in the Southeast. The group included David Hall from Revolution Ventures, Robert Hatta from Drive Capital, Trevor Kienzle from Correlation Ventures and Paul Santinelli from North Bridge Venture Partners. The panel was moderated by Eric Holtzclaw from Inc. magazine.

Here are a few of our favorite quotes, advice and reports from the panel:

• A recent Correlation Ventures report showed that there is still more investment activity on the West Coast. However, no one region is a standout when it comes to producing returns. With that, the first big quote is: “Don’t believe the Silicon Valley hype.”

Hatta said the Valley is “the last place on the planet” his team wants to build a company today. Apparently, the average pay for an engineer in that region these days is upwards of $130,000 per year. Lots of companies have instead built engineering talent teams in Austin and Boston.

The counter argument from another panelist to that idea is that “Silicon Valley has repeat entrepreneurs.” Not many other regions, if any, can compete with the record of the Valley.

• Panelists talked about entrepreneurs having skin in the game and getting those investors to commit. Some thoughts:

“If you are purely looking for a check, show him your slide deck, take the money and never talk to him again.” But if you are looking for real help, pick someone who has actually been in your shoes.

“If VCs can’t get a return, they aren’t interested. It takes disruption, market opportunity and a great product. Loving what you are doing isn’t good enough for a VC.” If you want to do that, it’s fine, but you won’t be pushed for an exit if you raise from friends and family.

There should be a balance between getting interest in the business and a product and building that product and revenue stream.

“Pitch events help, but if that’s the only aggregator, you are doing it wrong. Making a Glenn Gary Glenn Ross reference here: ‘Always be closing.’”

• Speaking of the top line, the panel mentioned that it is a good idea to have a revenue stream in mind: “It doesn’t have to be complete, but have an idea of where it’s going.”

And the last piece of advice: “Find investors who don’t care where you are. Keep talent local, grow your company and find investors that aren’t afraid to get on a plane.”

Good luck, go get ’em.

[UPDATE] The 10 biggest Nashville investment firms measured by size of fund

[Editor’s note: Last week, I measured Nashville’s top fund sizes by gathering PitchBook data. However, I got immediate feedback from at least five sources that PitchBook’s data is incorrect. With that said, I decided to write a new article with both PitchBook’s original information compared to another dataset (Bison) and then compared again to followup sources.]

Here are some of the top investment groups according to fund size in Nashville. Data is from PitchBook (which has proved to be mostly inaccurate), Bison, and original sources.

Screen Shot 2015-06-12 at 3.24.25 PM

Additionally, FCA Ventures is about to raise a new fund, FCA VI, with a target fund size of $75M.
Two funds that aren’t listed on PitchBook that should be included are Heritage Group, which has $160M under management. The company, according to a source, has raised $100M of a $200M target for a new fund. The other is Council Capital, that has total assets of  $100M+, according to a source.

There’s a new capital management group in Nashville

There’s a new capital management firm in town.

Corvus Capital Management, an independent, fee-only registered investment firm just launched this past March. Stephen Vogel, founder, previously served as Vice President at boutique wealth-management firm Diversified Trust in Nashville, TN.

Vogel, 30, graduated from College of Charleston in Charleston, SC where he received a Bachelor of Science in Business Administration. He a member of the CFA society of Nashville and is a CFA charter-holder.

Corvus Capital Management has set its fees at half the average industry rate and partnered Charles Schwab & Co. and eMoney Advisors.

“With interest rates low and stock prices high, we are looking at a low-return investment period. Advisor fees of one percent of assets are being challenged,” Vogel explained.

Vogel is hoping to user Corvus Capital’s technology platforms to its clients advantage: “Technology is changing very quickly in the investment space. If client’s advisers are not keeping up, it will affect their portfolios,” he said.

Nashville Capital Network releases annual report

The Nashville Capital Network (NCN) has released its 2014 annual report, citing an increase in angel investments, as well as new investments in three companies including Digital Reasoning, NextGxDx and Ampersand Health.

The report touted NCN’s 130 angel investors and funds. The NCN funds include:

  • NCN Angel Fund 1, consisting of $5.2M with 72 angel partners.
  • NCN Angel Fund 2, consisting of $11.2M with 100 angel partners.
  • Tennessee Angel Fund, which is a co-investment fund in partnership with TNinvestco.

The NCN Angels have raised a total of $7.5M in 2014, according to the report. The group has raised $50M since 2003.

Governor Haslam declares May a month for investors

Governor Bill Haslam just released a proclamation declaring May “Putting Investors First” month to recognize the importance the investment profession.

Gov. Haslam acknowledged the Chartered Financial Analysts (CFA) Societies in Tennessee for their commitment in the investment profession and for being champions for ethical behavior in investment markets, according to a release.

“Putting Investors First” Month marks the beginning of a campaign for the CFA Society of Nashville to celebrate 50 years in Nashville. In July, the group is planning an additional event called Future of Finance Celebration. The theme of the event will be centered around offering resources to investors support two important financial literacy organizations in Tennessee: Rock the Street, Wall Street and the Tennessee Financial Literacy Commission.

“The CFA Society is working expand the future of financial professionals in Tennessee,” says Treasurer David H. Lillard, Jr. “Tennessee Treasury Department wants to hire the best and the brightest investors,” and we are proud to employ Chartered Financial Analysts in our Investment Division. We are always seeking CFAs to be a part of our team.”