Mark Flickinger, BIP Ventures General Partner and COO, recently joined Emil Moffatt for an episode of WABE Tech Cast. The two explore the different approaches emerging tech companies can take to grow their business. They discuss Atlanta's booming tech ecosystem and Startup Showdown, our monthly $120,000 pitch competition.
We invest in multi-stages, which I think is exciting and depending on what the stage is, obviously the requirements are either more stringent or less stringent.
In a broad brush stroke, I think it's really important that their company is solving a known problem. People need to know that they have a problem that they haven't been able to solve on their own. This is sort of the painkiller versus the vitamin comment, convincing someone they have a problem is a very difficult business proposition. I think there needs to be a unique way that solves that problem. The founder and their team need to add it in a way that's sort of unique and relative to other solutions on the mark. They need someone sort of passion around it and surround themselves with talented team members that can solve the problem.
And then where we can, particularly for the more mature businesses or those that are Series A or so, we'd like to see some kind of proof of concept that the customer is consuming the solution that you have built.
There's a lot of different times or places when a company could or should raise capital and I think it's different for each one. I think this sort of conventional wisdom would say when it's time to scale. It's really easy for an entrepreneur to make a mistake and say, 'I built a product. I promised something to the market and then some people bought it and so therefore, I'm good. I'm ready to scale.' And if you pour a bunch of money into sales and marketing, at that particular point of time, you may be pouring gasoline on the wrong fire so to speak. I think it's really important for them to go through the kind of delivery of the promise. Let's make sure this product does what they said it was going to do. That often takes some iteration from a product perspective based on feedback from those earlier customers. And then once you get through that first renewal cycle, if your customer signed back up again, you know you're onto something.
If you go too soon, and not to say that these are binary events, but if you go too soon, you could potentially sort of pour a bunch of money into sales and marketing when your product's not ready. I think that's a mistake. So this, this idea of, 'Hey, we're ready to scale as the right time to bring on capital.' It means something a little different depending on where each company is, but you would want enough proof or confidence to say we're pretty darn close to what's going to be the ultimate success of the business, and yes, we need to do additional tweaks, but the time to go is now. And therefore I should bring on some capital.
That's a great question. It's one that we spend a lot of time on here. We used to be called BIP Capital. Our first four funds were BIP Capital. That name, while it was perhaps local and maybe even regional, didn't do a lot to tell the entrepreneurial community kind of who we were and what we were looking for. So one year ago we rebranded to the name BIP Ventures under the idea of, let's do a better job of telling entrepreneurs who we are and what we're looking for. We take this wider view approach. Without any fanfare, 44% of our portfolio is diverse, diverse being female or non-white. I can't profess to have the answer that's going to fix the problems for venture capital perspective, but I do know that if you're looking in the same places, you're going to find the same stuff. Atlanta is a really diverse city. It's more than 50% black and certainly there's plenty of female entrepreneurs here as well. I think by us at least opening our aperture and telling people we're looking for them - I know that's done a lot from our perspective where people are coming to us with great companies.
Certainly we need to do our work to make sure that we're accessible and we go to them. It's why we started Startup Showdown, which is a monthly pitch competition. Anyone can apply from around the country. And then certainly when we do them in-person like we did in Atlanta a couple of weeks ago, you need to be able to get to Atlanta. I think what's really unique and interesting about that is by kind of having no velvet rope or no warm intro needed. Until recently, every single winner of Startup Showdown has been diverse. There's no mandate to do that - great companies can be started by anyone. I think there's these sort of frictions in the system that are unrealized on a venture capital perspective that people need to sort of re-evaluate how to get connected to potential opportunities. I think we're very fortunate to be where we are in Atlanta, because there are so many great companies being built by so many different types of founders and we haven't gone the path of a targeted fund. I think by doing a better job of articulating to the market where we're looking for, we've been able to raise the bar in terms of what companies were able to both see and then fund.
"The city's tech startups are starting to see a growing level of investment. I think people are starting to realize what's going on in Atlanta, in particular as people build really promising companies that are solving some of the world's largest problems," said Mark Flickinger.
Atlanta, kind of on the map, originally was known as the FinTech space. There's a lot of transactionality and credit card processing happening here and out of that formed all these other solutions from a FinTech financial perspective, where we could bring technology to make things seamless and easier to move money. I think there has been a lot of FinTech investment that's happened, but there's still a lot of opportunity to go forward. I think the other one is healthcare tech. There's a lot of waste and abuse and inefficiency in the healthcare system. We have one of the most advanced healthcare systems in the world, if not the most advanced, but I think there's a lot of ways we can make that more efficient and better. There's a lot of invest building and investing going on here in Atlanta in that space. The third one I would say is cyber security.
Listen to the full interview on WABE Tech Cast's website.
