Prediction #3: “VC Investment to remain sluggish – with a positive twist”

By John Yates & David Calhoun / Corporate Technology Group – Morris, Manning & Martin, LLP

We’ve just completed a strong year for technology companies in the Southeast – with the wind at our backs moving into 2017. It’s realistic to predict another very strong year for technology entrepreneurs in Atlanta and the Southeast. In light of MMM’s deep involvement in the Southeastern tech community, we’re sharing with you a series of predictions for 2017.

Here is the third of our Top 5 Predictions in 2017 for the Atlanta/Southeast Technology Community:

Prediction #3: VC Investment to remain sluggish – with a positive twist

In contrast to what we expect to be a vibrant PE investing climate, the venture investing forecast remains a challenge for entrepreneurial companies in the Southeast. True seed and Series A investors are in short supply (although the Southeastern based VCs are highly regarded and very committed to the region). So our region’s entrepreneurs will continue be compelled to travel to the Valley and Boston to find early stage investment.

The good news is that Southeastern incubators and accelerators are organizing targeted visits to other parts of the country to meet with venture funds and introduce our region’s leading tech startups and growth businesses to sources of capital. Many of these funds outside the region are interested in meeting Southeastern tech entrepreneurs, if for no other reason than to pinpoint valuable sources of technical talent for their portfolio businesses. More early stage funds also are starting to recognize that they can invest in high quality companies in the Southeast with far less competition from other VC funds than they find when investing in their own backyards.

More good news – venture capital fundraising was close to $40 billion in 2016 which was a significant increase from the prior year. The challenge for our Atlanta and Southeastern entrepreneurs is to convince these funds to invest here – a region where technology talent is less expensive and more likely to remain loyal to their employer (in part as a result of the enforceability of noncompetition covenants in most Southeastern states).

2017 Prediction: Cautious optimism for Southeastern tech entrepreneurs seeking VC funding – more available funds but more work required to connect with them to tell your story.

John Yates and David Calhoun are partners in the Corporate Technology Group of the Atlanta law firm of Morris, Manning & Martin. The firm represents leading technology clients and entrepreneurs throughout the Southeast and also hosts the SE TECH Podcast series interviewing leading start-up & fast-growth tech companies in the Southeast region.


John Yates: Email | LinkedIn

David Calhoun: Email | LinkedIn

This column is presented for educational and informational purposes and is not intended to constitute legal advice.