Earlier today I was talking to a business executive about the Atlanta Tech Village. He was asking a number of questions and got to the most popular one: is there an equity component at the Village? My answer, of course, is that there isn’t an equity component. The response is always “why not — you should get a piece of the action.” At that point I nod and change the subject as it can be hard to explain.
There’s no equity component at the Village because we want to attract all types of entrepreneurs. Imagine a successful serial entrepreneur evaluating office space options for his or her next company. Since they have personal resources and a track record, there are a number of quality office buildings that would enjoy having them as tenants (assuming a personal guarantee on the lease). If there was an equity component, it would seriously increase the friction to attracting successful entrepreneurs. In turn, this would lessen the opportunities for successful entrepreneurs to help first-time entrepreneurs.
In a similar manner, imagine there’s an entrepreneur that has a successful early stage startup (e.g. $500,000 in recurring revenue and a handful of employees), we also want them at the Village (assuming a good culture fit). Once a business is working and product-market fit has been achieved, the equity is worth significantly more, and an entrepreneur is less likely to part with it for a tech entrepreneurship community.
At the Village, our goal is to bring together all types of entrepreneurs that want to increase their chances of success by helping each other. With a straightforward business model (see the pricing) and not having an equity component, we increase the odds of attracting the best entrepreneurs.
What else? What are some more thoughts on not having an equity component at the Atlanta Tech Village?