During last week’s panel on sports and technology, the perpetual question came up: how’s the access to capital for startups in Atlanta? I’ve heard this question hundreds of times over the years, both pre and post Atlanta Tech Village. The question is worthwhile, especially as most people asking the question aren’t in the startup world, and are genuinely curious.
Here are a few thoughts on the “access to capital” question:
- Funding for entrepreneurs with an idea is still limited to the three Fs: friends, family, and fools
- Once there’s a modest amount of traction — say, $100k in revenue or 10,000 daily active users — there’s a very limited number of angels and micro-VCs that will write a check (most entrepreneurs at this stage still aren’t able to raise money)
- After more substantial traction — $1 million in revenue or 100,000 daily active users — there is a tremendous amount of capital available, primarily from outside the region. Capital is more mobile than ever and investors are actively looking for fast-growing startups with traction.
So, regional capital is still very limited, but startups that have the basis of a working business, and great growth, have access to plenty of capital.
What else? What are some more thoughts on the “access to capital” question?
David Cummings on Startups 
It’s like asking “what access to the playoffs do pro teams in the southeast have?”
I would agree that traction is critical. In B2B, a couple of larger customers and a growing base of additional clients (and a proven handle on customer acquisition costs and other key metrics) will attract a lead investor (angel group or seed/micro VC) followed by other similar investors.