OUTLOOK SERIES PART 6: Evolution among entrepreneurs in region

(EDITOR’S NOTE: Thanks to the participation of Angel and Venture Capitalists located in East Tennessee, we are able to annually offer their insights on the past year’s activities and their outlook for 2019. This is the sixth article in this year’s series.)

Today’s question that we posed was as follows: “Since you started as an angel or venture capital investor, what changes have you seen in the backgrounds, previous experience, etc. of entrepreneurs?”

Courtney Watson, Partner, Chattanooga Renaissance Fund: This is a function of where you look. If you continue to look in the same places and ask the same people for referrals or wait for everyone to find you, there is likely no change in the backgrounds, previous experience, etc. of entrepreneurs we meet. I would rather the question be more pointed and ask the venture community if we are being more intentional in finding entrepreneurs, sourcing deals, helping our companies find talent and board members from new networks, organizations, events, publications/articles/authors, etc.

Ken Woody, President, Innova Memphis: Starting to see more second and third time entrepreneurs promoting their next idea or company. Love that experience, makes them more likely to succeed.

Eric Dobson, Chief Executive Officer, Angel Capital Group: I see a number of entrepreneurs that have continued climbing the learning curve. They have been through one or more start-ups and have the experience and knowledge of what works, what buttons to push, what levers to pull, and where to find resources at different points in the growth cycle. I am not seeing new “skills” per se, but hard-earned experience driving well-rounded teams and companies that have solid marketing and sales plans. Again, I think this is all indicative of a maturing ecosystem.

Tony Lettich, Managing Director, The Angel Roundtable: In our region of Tennessee, we are seeing a significant increase in interest in and passion toward entrepreneurialism in general. Additionally, the regional entrepreneurs and start-ups we encounter are increasing in quality and sophistication.

Kristina Montague, Managing Partner, The JumpFund: We are seeing more savvy entrepreneurs who better understand venture investment and are positioning themselves for success in fundraising. Some of this has to do with new tools and resources, especially those provided by our accelerators and incubators, as well as Village Capital and others creating “matching” systems for VCs and founders. We still do much coaching with entrepreneurs who are too early for outside investment and/or do not have companies which could truly scale, but the majority of our pipeline has matured dramatically in their approach to us as an early stage venture fund, and the ones that make it to pitch have definitely done their “homework.” Many of our female-led teams also have more seasoned leaders as women tend to be “second career” entrepreneurs.

John Morris, Fund Manager, The Lighthouse Fund: Since we started, we have seen an increase in repeat entrepreneurs. Some of that is due to the work of area venture development organizations that have strengthened support for entrepreneurs. However, some of it is due to connections through collaborating venture and angel funds.

Grady Vanderhoofven, President and Chief Executive Officer, Three Roots Capital: I have seen an increase in the experience, sophistication, and capabilities of the segment of the entrepreneurial community that is interested in and capable of raising capital from third parties. They are better calibrated and more pragmatic regarding how and why and when to raise capital and what will be expected or required by outside investors.

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