ETRA FOUND A WAY TO CLOSE THE FUNDING GAP FOR SOUTHEAST STARTUPS
Like nature, the world of entrepreneurship, venture capital and investment abhors a vacuum.
“There is a funding gap not just in the Southeast, but everywhere in the U.S. except New York, Boston, Chicago and Silicon Valley,” said Barry Etra, co-founder of RAISE Forum, a bi-annual event that brings together startups and investors from across the Southeast. “That’s where 80 percent of all venture capital comes from.”
Filling that funding gap is the purpose for which Etra started RAISE Forum in 2016 with partner Charlie Goetz, a senior lecturer in organization and management and distinguished lecturer in entrepreneurship at Emory University’s Goizueta Business School. RAISE stands for Retention and Advanced Investment for the Southeast at Emory.
RAISE was established on the premise that, because only a small percentage of venture capital firms are headquartered in the Southeast, promising startups from the region, which require funding in the $1 million to $5 million range, often move to the city in which the company providing the funds is based. Consequently, these early-stage Southeastern-based companies, along with their economic impact and employment opportunities, are lost to other regions.
Etra is the Inno Blazer award winner in the Government, Advocacy and Education category in the inaugural 50 on Fire Awards presented by Atlanta Inno in partnership with Atlanta Business Chronicle.
For each RAISE Forum event, a group of investors are invited to meet with representatives from eight startups and recently launched companies. Those eight companies are chosen from a larger pool, all of which must be in the Southeast (defined as Georgia and the five states that touch its borders), must have generated some revenue and must be looking for between $750,000 and $5 million.
“We are conveners,” said Etra, who also heads the Atlanta chapter of Keiretsu Forum, a global investment community of private equity angel investors, venture capitalists and corporate/institutional investors. “While there are a lot of opportunities for companies and investors to see each other, we are the only one in the country, as far as I know, whose stated purpose is to fund companies locally with local money at high levels.”
Since 2016, 65 companies and around 250 investors have attended six RAISE Forums, including the most recent event in April. Fifteen of those companies have received investments and each one is still operating in the Southeast.
One of those companies is OBMedical, a manufacturer of wireless external fetal monitoring equipment in Newberry, Florida. Since participating in RAISE Forum, OBMedical has been acquired by Philips, the global health technology company.
“RAISE was instrumental in helping us refine our story and introducing us to people, some of whom ultimately saved the company, which allowed a lot of people to make a very good return,” said Mark Samuels, entrepreneur, inventor and founding director at DiligentCXO.
Samuels, who was assisting OBMedical in its fund-seeking efforts, praised RAISE Forum organizers for developing a format, which included mentoring by members of the board and putting the company in front of the right investors. In his case, that meant investors interested in relatively small, early stage companies which have tens of thousands, not tens of millions, to spend.
“There are venture capitalists and angel investors at the forum, but most of the checks come from individuals who get personally interested in a project, want to make money and understand the risk,” Samuels said.
One such investor is John P. Lally, co-founder 15 years ago of Resurgens Capital Partners. Lally now operates as a private investor and principal with Criterion Partners LLC.
“RAISE Forum brings quality companies to pitch their stories to sophisticated investors,” Lally said. “Over the course of the last five years, the quality of those companies has improved, and even more so over the last two years.”
Describing himself as someone who is always looking for “efficient ways to get close to companies, listen to their elevator pitch and observe how they react on their feet before deciding whether to schedule a follow-up meeting,” Lally said he is a strong proponent of the regionalist orientation of RAISE Forum.
“If you’re in Connecticut, we’re going to be spending a lot of time on the phone or videoconferencing,” he said. “I prefer talking eye-to-eye. To me, not only is it more beneficial to be in the Southeast, it’s better to be in Georgia, if not Atlanta.”
In addition to scouting for hot companies, investors enjoy attending RAISE Forum events to rub shoulders with their peers.
“There are many places in Atlanta where you can meet investors, but they are mostly investors I have already run across,” said Sig Mosley of Mosley Ventures. Mosley, who was honored with a Lifetime Achievement Award at Atlanta Business Chronicle’s InnoVenture Awards in 2018, said RAISE Forum events create an opportunity to learn about startups and young technology firms that have been vetted by the organizers. He also appreciates meeting new investors who might be interested in one of his current companies or perhaps a venture down the road.
“At the last forum three of the eight companies were ones I had not seen before,” Mosley said. By curating the investor and company sides of the process, RAISE Forum seeks to foster collaboration among the region’s entrepreneurs. “This is not about coming in and kicking tires,” said Etra. “This is about creating an ecosystem in the Southeast.”
Atlanta Angel Network, Barry Etra, Entrpreneurs, Keiretsu Forum, Keiretsu Forum South-East, Startups