Atlanta’s ecosystem for early stage startups has exponentially improved in recent years. I myself came to Atlanta nearly 15 years ago looking for greener pastures when engineering talent in Silicon Valley was slim and I was fed up with inflated salaries and sky-high real estate costs.
Within two months of moving to Atlanta, I had hired over 30 of the best engineers in the country. Two years later, my engineering team was 250 strong and Movaz Networks was fast on its way to becoming one of the most successful optical startups in the nation. It was official. Atlanta was my new home.
The city’s biggest draw then and continues to be now, the exceptionally talented pool of engineers. Local colleges and universities graduate over 2,400 top quality engineers every year, and this just adds to the already plentiful mix. Thousands of engineers with rich experience from working in startups and other major corporations like First Data, Delta, Cisco and more in the city already live in the Atlanta metropolitan area.
The skill set and volume aren’t the only benefits to the city’s engineers. Leaving Silicon Valley means leaving the ego behind too. In Atlanta, an entrepreneur doesn’t have to charter a luxury bus to cart workers from San Francisco to Palo Alto or Mountain View. There is no need for extensive perks or costly amenities. Salaries are much more affordable, and the cost of living is lower in Atlanta. For example, the median price of a home in San Jose is $773K. The median price for a home in Atlanta is $138K. That’s big savings when it comes to a business plan.
The great talent pool has fueled tremendous early stage startup activity. One local incubator, Atlanta Technology Village, is at capacity with over 600 companies. They now have a waiting list for those they’d like to include in the future. Another incubator, Georgia Tech’s Advanced Technology Development Center (ATDC) has helped its graduates collectively raise over $2 billion for their startups.
Atlanta is also receiving national attention for the success of its entrepreneurs. Georgia is ranked third for information security with over 115 companies generating 25% global revenue share of the market. In medical technology, Atlanta is home to the CDC and over 200 bio-tech companies. The industry generates over $4 billion of revenue annually. In the gaming sector, Atlanta is ranked third in volume for video game planning activity and fourth in industry compensation levels.
The city’s subculture has also become hip for young entrepreneurs. Hangout spots include the trendy Tech Square and the Old 4th Ward. There are also dedicated startup spaces like Polygon, Opportunity Hub and Collider in the downtown Atlanta. Weekly meet-ups and Hackathon events elevate the entrepreneurial energy level as the community unites around the shared mission to build great startups.
Despite Atlanta’s pros, the city still isn’t quite at the caliber of other startup areas like Silicon Valley, Boston or New York. The major con – the lack of tier one investors.
The kind of multibillion-dollar venture capitalists that can create companies like Facebook, Google and Twitter are not yet present in Atlanta. In fact, the limited angel and second tier investors that Atlanta startups have access to just isn’t enough. A close friend recently started his company in Atlanta with a great idea and a talented team but was unable to secure the funding he needed. When a top venture capitalist firm in Boston invested, they forced him to move his company there. While it’s not impossible to acquire tier one venture capital without having to move, the examples – like Ionic Security - are few and far between.
Why is it important to have access to big dollars? The money is obvious. But what’s even more crucial than the money is the know-how. If you’ve previously invested in companies and led them to multi-billion dollar valuations, you have the perspective and experience to do so again.
Because Atlanta lacks this mindset and leadership power in the marketplace, mergers and acquisitions and IPOs are fewer and lower in value.
I moved to Atlanta for the engineering talent and the many benefits the state provides to entrepreneurs building businesses, but from my perspective, the city still has some growing to do. If the startup community doesn’t figure out how to bring smart money to Atlanta, the city won’t be able to live up to its potential and some companies might seek greener pastures elsewhere.
