A geological accident is why Carvoyant happened to begin in Florida. That’s a story for later but we’ve never really thought of this primarily as a “Florida” company. I’m lucky enough to have two “home” states, California and Florida, both weird, wonderful and frustrating, for life and startups. We tackle things with a “Start, now!” philosophy, so we did, in Florida. Almost from day one, we had a founder, customers and investors in other states.
Tonight, I’m speaking at StartupGrind Tampa, at the Oxford Exchange. Inevitably, there will be questions about early stage capital in Florida and these articles are particularly timely:
Overall, this is good data and work being highlighted but I’m a little biased about the methods and “solutions.” This isn’t a knock on the Florida Angel Nexus or UCF, but organizations target a solution and metrics to what they can do and in alignment with their overall mission. Three deals and a million dollars is great work but startup economics tell us ten deals and half a million would have better impact and likelihood of long term success. Here’s the painful truth, from Florida Trend & PWC:
“According to a 2012 MoneyTree report, California, Massachusetts, and New York attract 70 percent of all investment financing while Florida attracts less than 1 percent.”
Ouch. It’s a headline statistic, so take it with a grain of salt, but still, ouch! The capital is in Florida and the climate (beaches & taxes) makes it very attractive to stay. All that’s needed is to change the scale and timing of some of the portfolio.
An even better metric is not how much effort can Florida invest in developing a “unique” hub infrastructure. Take the real resource, the people involved in Florida Angel Nexus, Tamiami Angels and other groups, and turn them into the multiplier. A better target for Florida overall is adding 200 new Florida Angels to AngelList.com, the social network which already has the infrastructure, deal flow and community for early stage tech. With 200 Florida Angels committed to invest at least $50,000 each, across at least 5 companies, each, Florida’s cost structures make it possible to keep deals here and attract from talent from elsewhere.
Leverage relationships into a very modest capital flow. AngelList’s syndication feature keeps the overhead low for both investors and companies while the investments are meaningful scale to early stage innovation. If Florida Angel Nexus has 50 members, each only has to recruit 4 angels to create an extremely significant, rapid impact on the economy. Lean hard on your poker buddies, golf foursomes and others to “Start, now.” Don’t advocate for a particular investment, just advocate to get involved. Political groups do this all the time and startup investing can be “cooler”, have a direct local impact and be more rewarding!
Out of twenty early investments, 1-3 will hit the scale aligned with more established Florida capital. Overall, the message needs to be simplified.
- Make more, smaller bets, earlier.
- Expect & celebrate fast failure to foster long, large winnners.
- Angel investing is cool, local and meaningful.
Until that happens, Florida will still have an entrepreneurial spirit but founders will continue to take our investments, offices and jobs out of state. That’s a drag because the beach and taxes are really nice in Florida this time of year.