Angel investors are the wellspring of the American entrepreneurial economy. This displays itself in the Atlanta metro area, which has one of the most active entrepreneurial start-up ecosystems in America. This ecosystem is a continuum that evolves from the conception of early stage/start-up companies to their receiving funding.
Atlanta’s ecosystem begins with “entrepreneurial assets.” These are start-up concepts and ideas germinated by entrepreneurs of all ages and backgrounds, and by professors and students at colleges and universities that include Emory, Georgia State, Georgia Tech, Kennesaw State and the Savannah College of Art and Design.
The next stage of the ecosystem consists of enablers. These are the various entities throughout Atlanta that help the entrepreneurial assets shape business plans that will help them become fundable companies. Among the Atlanta enablers are the Advanced Technology Development Center (ATDC); The Atlanta Tech Village; Emory University programs; Georgia Tech’s Business Plan competition, Flashpoint program and VentureLab; the Georgia Tech-Emory TI:GER program; the HBS Venture Competition; The Hub; Hypepotamus; 151 Locust; the TAG GRA Business Launch Competition, and the TiE organization.
The next step is where angel investors come in. It is very difficult and competitive for start-up entrepreneurs to obtain funding, particularly in today’s economy. Primary reasons for this are the very high risk and uncertainty related to an early and unproven company. Banks won’t lend money to such companies . Venture capital firms generally don’t invest at this early stage. Money from friends and family can only go so far. So, angel investors are the primary sources of capital for start-ups.
Angel investors are high net-worth individuals who risk their own money in early-stage companies. Most angel investors are current and former entrepreneurs who wish to “give back” by financing and mentoring America’s next generation. Others are professional types, those who were born into wealth or invest other people’s money. Most angel investors have earned their own money and are giving it back.
Without angel investors, start-up companies don’t get funded and don’t get started. New jobs don’t get created. Since 1990, 75 to 80 percent of new jobs in America have been created by small businesses. Angel investors are the primary source of their funding.
Atlanta is fortunate. Beyond having an ecosystem composed of a robust number of entrepreneurial assets and enablers, it also has a strong angel investing base. The Atlanta Technology Angels is one of the larger and more active angel groups in America. New groups are being formed to invest in digital media start-ups; suburban angel groups are in nascent development stages, and a new women-only angel group was recently formed to invest in women-led businesses.
Entrepreneurial assets, enablers and angel investors comprise the continuum of job creation in America and Atlanta, and the latter makes it all happen.
Mike Eckert, former CEO of The Weather Channel, is chairman of Atlanta Technology Angels and vice chairman of the national Angel Capital Association.