Atlanta investors are bullish on where the city’s startup scene is headed — TechCrunch Live Atlanta

Foreign And welcome to techcrunch's Spotlight on Atlanta we've got a great investor panel Here today I'm joined by Sean O'Brien Who works with overline Ventures and I'm Also joined by Shyla neeves Bernie who's With us from Zane Venture fund we have a Great panel today for you guys and I Think a great place to get started is Why don't you guys both subscribe to me What is so interesting about investing In Atlanta right now Michelle you want to kick us off Sure so what I think is Um incredible about just Atlanta as a Whole right Um we have so many different things here Not only our universities not only Um but the culture Um the diversity Um I just think that we are set up for Success in so many different ways right And so for me Um who kind of goes in early in deals Like at the pre-seed level and and Seeing I'm just excited about the Opportunities that I continue to see Here people either moving here or people Who are here building companies for us Is primarily we're interested in tech Companies and so there's just no limit For the talent um and so it's always Exciting to see the talent that's coming Out of the Atlanta University Systems um

And so for me Um that's what I find exciting just the Town Yeah I would I would second that uh we You know as pre-seed and Seed investors Uh my partner and I Um and my partner Michael and I uh we Screened first on founding team and I Agree with Shyla completely they're the Talent that's here uh built in in the Atlanta ecosystem is second to none We've got lots of universities and Colleges uh that are cranking out you Know top tier Talent not only in Technology but in deep Tech and in Consumer related Businesses as well so Talent we've got a Friendly ecosystem full of funding Sources as well as other support sources For Founders who are building our Community we've got a mayor who's very Pro-business and pro technology uh and Uh you know a set of business laws that Make it a great place to build and grow A business and we just have a different Way of doing things down here in Atlanta Everybody here is friendly uh Collaborative there's not a lot of sharp Elbows in this City and there's a lot of Resources that come together to support Founders on the earliest stages all the Way through their growth stages of their Companies so it's a great City to build In and a great moment in time for our

City Mm-hmm and knowing that you both talked A lot about Talent that's definitely Something I've heard time and time again About the Atlanta ecosystem it's just How strong and diverse to Talent based There is and sort of looking at the Types of companies that are getting Built or the types of companies you guys Are both interested in are there any Sectors or hidden gems that you find in Atlanta that it seems a good land Entrepreneurs are particularly good at Um I'm gonna say uh B2B SAS Um my my Richard partner has made a lot Of deals in that sector and those deals Tend to do well here in the South Um and so we've kind of leaned into that We found a few SAS companies that we've Invested in Um and so for I think that's one of the Critical ones but you know as Sean said Like deep Tech it's coming we have a Biomedical it's called what is it Georgia Tech Square science square So there's biotech that's here now it's Not an industry that we invest in but it Is here right there are funds that have Been set up for that particular Um I don't In terms of other sectors fintech was Huge at one point I'm not sure if it is Right now here in the Southeast Sean may Know differently

Um not for the from some of the Companies I've looked at and folks have Kind of moved away or pivoted away from Some of the fintech that was the Payments I guess back in like 2020 and 20 21 companies like stripe were coming Out and all of these competitors came Out I don't see a lot of that now Um but for me I played try to pay close Attention to Enterprise SAS because Those are the companies I'm looking for Um and that have been tended to scale in The past Yeah I I think um B2B says clearly Um has been a winner for our community Uh I would say that fintech we still see A lot of promising fintechs and a lot You know at all stages we've got some in Our portfolio and then looking around The community there's some breakouts Like Green Light Financial Um that are continuing to truck along Um we've recently been known for web3 Which I know is not really a Vogue uh Spot uh to be invested in the market Currently but we've got a great Community there we've got a long history Of martech and sales Technology Building In the city we're really excited about Some of the newer Industries like AI There's a lot of really cool things Happening right here in our community in Ai and then clearly we are without a Doubt a leader in logistics and supply

Chain you know taking advantage of some Of our big Fortune 100 companies like UPS obviously Home Depot and others that Have big supply chain and Logistics Um you know backgrounds uh you know We've got a number of notable breakouts Here in the community and a lot of early Stage startups that are building to Solve some of those critical you know Opportunities that many of which were Highlighted during some of the supply Chain issues of covid so one of the Things that we really love is the Diversity of not only Talent air but the Diversity of types of businesses that Are being built right here in the Community And knowing that you just mentioned that The city has some of those big Corporations those Fortune 500 and 100 Companies based there that is definitely An asset for the City compared to say Some other locations that just don't Have that sort of density of those big Corporate players and how do you think That is a strength for the Atlanta Ecosystem for these startups building Somewhere where there are these large Companies right in their backyard It's huge um I'll just jump in on that One we've got some notable large Companies that have been very direct in Their support of fostering you know Entrepreneurship and innovation in our

City we've got I think 13 now corporate Partners that are supporting the engage Program which is deliberately trying to Match uh corporate buyers with uh Innovation in the form of startups so That's one tangible example we've got Other companies large companies like Cox Enterprises which is a 20 billion dollar Private company That has been a you know contributor in Many key ways to the local startup Ecosystem through funding programs that Could engage programs like techstars Atlanta and techstars social impact but Always being there with the spirit of Helping out Um you know under the Mantra that if It's good for Atlanta it's good for Cox Uh but the most you know notable way They can help is by embracing uh early Stage innovation in the form of becoming A customer you know the best you know Funding for many companies is customer Funding and so we've got that Spirit of Adopting early uh which is key we've Also got the spirit of you know the Executives and the leadership teams of These large companies have shown an Interest in leaning in supporting Founders that are building through Mentorship through formal advisory work And the like and then just being an Active contributor to getting this Flywheel cranking that we're all trying

To accelerate here to create sort of This launching pad for the next Generation of Founders is something that I think our our large corporate partners Are really keenly interested in doing Yeah I would totally agree we've um we Work with the field in like Southern Company who's looking for some of the The um talent to become part of their uh Diverse uh what are they diverse Suppliers and so we've tried to get some Of our portfolio companies into Corporations for that or even just Sean's point about like getting these Corporations as a customer more than Anything I think is critical versus Looking at them as a potential investor Um and so we tried to take that strategy With some of our portfolio companies um Who are Enterprise Um technology companies and so I totally Agree um engages sort of like the house For all of these particular corporates There's I think there's a graduation Tomorrow something tomorrow Um and we'll get a look at some of the Companies that have come out of engage And this is where the corporate Partners Play a a really strong role Um and then some of these early stage Companies Pages I was going to ask you about sort Of what the late stage funding Environment looks like in Atlanta and

Kind of what are the strengths there and Maybe what are some of the holes that it Would be better for the ecosystem to get Someone to fill I'm gonna let Sean go there because I I Am I pay particular attention to where I Promised my LPS I was gonna pay and That's in the early stage and so Sean May have some um even though I know a Lot of the late stage I don't know What's happening um with big Sage Companies yeah you know we are also Focused uh primarily on pre-seed and Seed investing Um but part of our job as you know a Good uh Venture partner for our Portfolio companies is being deliberate About maintaining relationships with Downstream investors and so while we Will write checks in the later stages Through our opportunity fund we really Spend an awful lot of time Um you know collaborating with some of The downstream investors many of them Aren't the coastal cities where you'd Expect in Boston and New York and San Francisco but we've got some great you Know series being Beyond investors here In Atlanta I would say that when Michael And I started overline we thought that The most acute need in the funding Ecosystem was that the earliest stages At formation stage you know two Founders And an idea concept on a whiteboard that

They want to turn into code and turn Into product and Turn It ultimately into A company and so that's where we started Um and we've been you know trying to Drive you know collaboration to make Sure that as we get past the point where Overline is really built to be a Hands-On kind of early stage partner in The zero to one stage of a business that We have a really safe and comfortable Place to hand them off to Um and so I think but in general I think We could use more Capital at all stages Here in Atlanta while we've come a Really long way as an ecosystem over the Last 10 years we still have work to do And that's one of the areas where I Think we could continue to improve Definitely Yeah it's going to Kind of sort of how Lure these deep pocketed investors as You mentioned maybe are coastal are just Not based in the City to Atlanta and Once they're here how do you guys Thinking about how the ecosystem can Make sure that they're here to stay once They do arrive So I'll just show you how I work with um Some of the mainly the West Coast Investors who are looking for talent Here in Atlanta Um and wanting some most of them were Looking at because of the companies that

We've already invested in and so they Have have an interest in our portfolio And so for us you know it is you know I Developing that relationship like Sean Said because after as we know there's Someone else who needs to pick it up When we start to to leave all for us It's around series a and so for me I've Been really cognizant of making Relationships bringing them to town Right so we've had true Ventures out of On the west coast who has come to town Wanted to meet women Founders here in Atlanta so you have a dinner whatever But that's a one-off my my goal is like When are you going to come when's the Next one what's the follow-up for the um Portfolio companies that sort of thing So keeping that line of communication Opening open so hopefully they will set Up a presidency or there is a I don't Know four billion dollar fund that I Talked to five years ago I have no idea Why but they reached back out to me Because now they have they have a Pregnancy in Atlanta I think there was One person and then Someone comes back and forth so I'm Trying to be like Sean said there's no No rough elbows here we want to be Friendly and open and say hey we're open For business yes take a look at our Portfolio companies sure I'm happy to You know curate a dinner for you to kind

Of see what's happening in the ecosystem And so it's just being open to you know Meeting with them and talking with them And hearing about what they think about Atlanta and how we can help them you Know make some decisions to have a Presence here and be ready for when our Companies are looking for that type of Um financing and so Um yeah it is just about having that Relationship with them in unconventional Ways go ahead Sean I know I think I Think you're exactly right I think the One thing that you kidding on there is Being present in the community I think You know having the capital is one thing But having somebody who's here who's on The ground supporting Um you know Founders in their Journey Getting to know the local ecosystem is Key uh thrilled that we've seen some of The big funds uh have uh people here in Town got inside he's got a investor here You know Drive Capital just added Somebody here with a specific Mandate of Atlanta circano just added a person We're hearing almost you know quarterly Of a larger fund putting an outpost here In Atlanta which is a start I mentioned Before uh mayor Dinkins is doing a great Job Um you know supporting the ecosystem he Named a Texar Tech advisor Donnie Beamer Who's gone out and started carrying the

Atlanta flag to some of the coastal Communities to try to show them all the Great things that are happening in our Ecosystem but I think ultimately and I Should also mention Venture Atlanta is You know sort of a an event and The Innovation month that surrounds Venture Atlanta is a way for our city uh in the Broader Community to Spotlight all the Amazing things that are happening here And we're continuing to set records as Far as the number of outside investors That are coming into the community to See what's happening here ultimately It's going to take winners and the good News is we're starting to see an Increased Pace at winners obviously We've had some notable breakouts like Sales Loft and calendly Lease query is You know their flock safety one trust a Green Light Financial that I mentioned Before and I think ultimately it's going To be important for these winners to Break out so that Founders realize that You can start and build a very large and Important company right here in Atlanta And that the funders will ultimately Realize that what we've got here is Special and that you can build a unicorn Or a deck of corn right here in the Atlanta ecosystem so I think it's just Going to take time and more winners That was something I was going to get Into as well is this sort of Atlanta has

Had these big Winners as you mentioned And there has been exits and but it's Not consistent if you look at say the Data from someone like pitchbook it goes Up and down there's good corners for Exit it's and then there's some quarters Where there are no company exits at all And I'm curious how you think about the Exit environment and how it sort of Impacts the overall ecosystem or if you Think like you mentioned Sean you guys Are almost there like we're almost at That point where maybe we're going to Start seeing a lot of exits that'll sort Of allow things to click into place but Yeah I'm curious what your guys thoughts Are and how maybe this inconsistent exit Environment is impacting the market and Maybe how when that changes it could Have an effect Yeah you know um being able to time These kind of big notable exits is very Very difficult to do Um but I will tell you the one thing That hasn't slowed down is the number of People in organizations and capital that Are intentionally leaning into the Community to support these Founders that Are building here so everything that's Happening Upstream has been a steady and Consistent increase in Pace and momentum And you know the outcomes which are the Big celebrated exits there's a lot of Things that go into it right now

Obviously covid and this macroeconomic Environment has been challenging and has Reset valuations across the board which Is sort of you know maybe caused some of The ones that were sunicorns or on their Way very quickly to become unicorns to Take a step back but I'm confident and You know that seeing everything that's Happening from an organization and Collaboration perspective around you Know fostering Atlanta as a leading Ecosystem for entrepreneurship and Innovation that it's absolutely Inevitable that the pace and the number And the consistency of these large hypo Exits will only continue And so one of the things that I and I Can't remember the investor that shared This with me she's from Atlanta but is On the west coast you know talking about How the date is is really skewed Um and the fact that we don't tell a Good story right so we there's one data Point that we were on par with Austin in Terms of exits but ours took longer to Exit right the companies here in Atlanta Just take longer but we still have you Know exes I guess similar to theirs and So the thing is I don't think Atlanta as A whole we don't tell our story well Enough we don't talk about our wins you Know we just get right back to work And I think that's the thing with Johnny Beamer out of the mayor's office is

Attempting to do how do we tell this This awesome story that's happening down Here Um we don't have as much Capital as the West Coast but we are still having an Impact right in terms of exits Um Regional entrepreneurs building great Companies and so I think that's one of Our biggest flaws is that we don't have We have not been able to tell the Atlanta story what's our secret sauce Because there is one here and so what I Feel like Um there was even something that came Out over the weekend and I was like Where's this data come from it came from Carla I believe that said we had only Made 64 deals like we were near the Bottom in terms of deal mcmade but Looking at the numbers Um I think it was okay I forgot who was Under it was Miami I believe Miami Invested in more money but we made more Tables and so that won't that's not a Story no one is looking at that we're Actually putting money to work at a Faster Pace in Miami we're just not Writing the check sizes at Miami rights Is writing and so I think it is our Story that just needs to be told in a Way and there's a community of us who Are trying to figure that out there Startup Atlanta here who wants to do That right bring everything under one

Umbrella so someone could really tell That story in such a magical way and I Think that to me that's our issue Um I don't think I mean we're doing on Pace with a lot of other Um hubs that are much bigger and broader Broader than we are Um and so I think we do Good at the level we're at right and I Think um I think we just need to be Recognized that there is something here I mean there is something special we've Had our unicorns and you know no we've Not had Fun um to break up but that doesn't mean It's just one on the way right that that Is working hard right now and so I think Just telling that story more succinctly Um is something that we could do a much Better job at Yes Miami that is something I've always Found really interesting about the Atlanta ecosystem and before we got onto This panel I went and checked the Q on Numbers and I don't know you said you May have gotten those numbers from Carta But looking at pitchbook pitchbook has Tracked that there was more money Invested in uh startups in Georgia and The Atlanta area in um q1 of this year Compared to all of the State of Florida And q1 of this year and obviously they Have growing hubs in St Petersburg and In Tampa as well so I thought that was

Really interesting and so you you dug Into that very well Shiloh but I'm Sean I am curious about your thoughts about That as well sort of this weird notion That we're all talking about Miami even Though there are ecosystems like Atlanta That are maybe making more of a Difference or maybe putting in as you Said more of the work to kind of build An actual ecosystem yeah um you know I Think to Charlotte's Point narrative and Storytelling is a big part of it Miami Is just been I mean mayor Suarez has Just done a Credible job of saying that Miami is Open for business and basically Accepting you know all of the incoming Capital from San Francisco that Basically essentially just drained out Into that ecosystem and it was magic to See and I think two hours to a certain Extent that's what our current Administration here in Atlanta is trying To replicate the good parts of that Um you know these there's so many Different data points out there you know Pitch vocal put some stuff out then Cardo put some stuff out and they slice And dice the by County by region by Metro area I think a lot of those data Are skewed at times by some of these Later stage Mega rounds that are Hundreds of millions of dollars in a Single funding that could account for

Many dozens of early stage Investments That might be happening here in Atlanta That might get outshined or at least the Way the math is working on a non-volume Weighted basis might get into outshined By one nuclear nuclear their Fusion deal Or you know one you know extremely large Biotech startup and so Um again I'll just make the point that The data is going to tell the story at a Moment in time and what we from an Ecosystem perspective are really focused On is building a foundation that every Step forward is a step forward in Permanence and that we take the entire Community with us and that our starting Point for the next generation is always Farther along than where it was when we Got here and that's everybody who's Who's in here and getting this flywheel Going and so we've been less caught up As a community in sort of the hype cycle Stocks and so I think we're better Positioned because we're building good Businesses that are diverse not only in Talent but in Industry that are focused On building sustainable business not Just trying to get the highest valuation And the biggest round and the biggest Headline and a quick exit but they're Talking about jobs and they're talking About sustainability from a you know Business perspective and so I like our Approach here in Atlanta maybe a little

Slower on the start but I think it's Going to build the right kind of Business ecosystem here for the long run And sort of going off of that business Fundamentals and sort of not going into The hype Cycles it's definitely easy to Tell from the numbers as well that after Going through the bull markets of 2020 2021 and then the subsequent pull back Kind of across the board in 2022. if you Look at the numbers there was a pullback In Atlanta but not the same way there Was a pullback in other markets both Established and emerging as well and so I'm curious what would you lend some of That just that sustainability of the Market the market should just keep going Still getting a lot of great numbers Every quarter still sort of backing These companies and being able to grow At a time when other markets are not Seeing the same kind of success or the Same kind of grit in their own Ecosystems Yeah I mean I think some other of the Coastal cities the more mature Venture Markets Um you know there's just been this Um mentality That's permeated with many Founders that There's just this inexhaustible pile of Money that's always going to be Available and I think one of the Benefits and I would say this in the

Right way one of the benefits of going In a market like Atlanta where Capital Has been scarce Um you know the best businesses have Always found funding but it hasn't been You know so one of the you know sort of As readily available Um and I think one of the benefits is The founders here have been focused at Least in the 20 years that I've been Here and investing on building good Solid businesses not just on the flashes PowerPoints or the best elevator pitches But ones that truly have unique Differentiation that's sustainable over Time uh that you know they've got a Unique insight into and building in a Way where they're Capital efficient Relative to some of the other cities That we've you know compare ourselves to Um and you know I think it everything Regresses to mean over time I think You're going to start seeing the data Showing that we're going back to a mean In some of these markets that got Hyperinflated and you know I just think Our our good fundamental blocking and Tackling approach that at least the Startups that we see here in the Community is going to win in the long Run how about you I 100 agree um and I Think one of the things that you know Sig and I always talked about is like Like I don't get caught up in the hype

Of a deal right so there were a lot of Hype deals that came our way and we said No Um because we are looking at a Particular founder a particular company And Hype isn't what we're looking for right Can you actually build this business and So we said no to a lot and and I think That's what works here right and so now We said no to a lot now we're able to Follow along to some of our companies Who you know maybe they've hit a rough Patch we have Capital to do following is A part of our strategy but we're putting It where the companies that need it the Most and it happens right now to be in Our portfolio and so we didn't get Caught up in high valuations or anything Like that we stay true to what we had Promised again to our LPS and I think That's what's causing us to have you Know our companies are scaling up right They are all shrinking up and we feel Good about that and so um I think that's Going to help us be the different Differentiator out of all of these other Hubs and it is probably it's time to Tell but we we see it in real time here Um but I think we because of that um Being I hate to say cautiously Optimistic with our Capital but you know I think we don't just we're not Following the trends right

Um we want to set them and and then Focus on the companies that are building Them and uh have our Exes in that way And so I think that's what served us Well so far as an ecosystem Mm-hmm And definitely thinking about sort of Where the ecosystem heads from here Obviously we won't be in this bear Market forever what would you guys say Is the biggest hurdle or roadblock for The ecosystem to grow from here and on The same on the flip side of that what Are you most excited about for the next Five years in the Atlanta ecosystem so If me what I would think is the biggest Hurdle we don't have something for our Talent right so whether it's giving them Opportunity to build a company right we Have to have an ecosystem to be able to Do this so providing them with the Resources the capital and everything Else that makes for growing a good Company Um I've talked to a lot of our talent That left Atlanta right and they went to L.A they went to Boston somewhere on the West coast and I'm going why well they All felt like they didn't at that time They didn't have all the resources Necessary to build a great company and And so I think it's incumbent upon us to Really Um nurture that early Talent so here at

Zane that's why we that we we we work With the universities because we want to Help them have these students thinking About entrepreneurship building a great Company and then when they when they Finish school that they stay here and do That right and so that's what's Important that's what's been important For us like how do we nurture the Ecosystem Um and keep the talent here so they Don't leave and go to another ecosystem Where they feel like it may be better And there's better opportunity so I Think creating opportunity for our Talent is Um is where I want to be focused and I Think we are focused as an ecosystem as Well Yeah I I think um I think the biggest Concern is just not resting on our Laurels Um we make progress I think at times in The past maybe we'll push hard as a Community and we'll start getting some Success and people will start backing Off and we're in a You know in a season where we all just Need to keep the momentum and keep the Pace and I think if we do that things Are going to continue to work out great For us as a community I'll tell you what I'm most excited about is just the pace Of innovation that we're already seeing

And the creativity of ideas that we're Seeing and diversity of ideas that we're Seeing and in particular now that we've Had some big companies grown and some Really big and notable exits we're Starting to see the second generation Founders coming out of some of the Recent successes probably not mention Any names but there's been some notable Exits here in town and we're starting to See the ones who were really close Um but you know maybe didn't Um you weren't the number one or number Two people uh in those startups but they Were close and early and they saw what Great looks like and subwo it is Possible and they're coming out and so Sort of everybody talks about the PayPal Mafia and what they've gone on to we're Starting to get those mafias here in Multiples and that's when we really like To engage is two people with a concept That they build a solution around at Their company and now they want to build A business around it perfect and that's What I'm most excited about the pace of That that we're seeing here [Music] Time I just wanted to take another Second to thank you both for coming on Today this has been really fun and I Feel like I learned a lot about an Ecosystem that I thought I knew a lot About but maybe I did not so thank you

Very much Sean and Shyla for joining us Today thank you so much Appreciate it