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Welcome to our third annual round table, in which members of our BIP Capital team come together each December to discuss the year — and what a year 2020 has been. While the pandemic has had a profound impact on humanity as well as the economy, it has also accelerated technology and business trends in support of social distancing, digital workforces, and asynchronous collaboration. We looked at some of those trends as well as what opportunities and challenges may lead us into 2021. …


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Photo: © rodphotography stock.adobe.com

There has been a longstanding belief that for startups to succeed, they must be located in one of the country’s traditional Innovation Hubs. For technology, the primary hub is Silicon Valley and the San Francisco Bay Area. Startup founders have flocked to this region for decades due to the success of other companies located there, the wealth of software development talent in the area, and the presence of large venture capital firms needed to fund growth.

But even as Silicon Valley has been a Mecca for technology startups, it has its drawbacks, including a high cost of living, overcrowding, and regular environmental crises such as wildfires. With an expanding number of options for building businesses elsewhere, entrepreneurs are increasingly wondering whether Silicon Valley and other high-cost Innovation Hubs like New York City are still the only places to be. …


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Photo: © matimix stock.adobe.com

In these trying times, we’re already discovering that the businesses most likely to come out on the other side are the ones with the ability to adapt. We saw some early, publicized examples of this: restaurants turning into community pantries and bodegas, whiskey distilleries switching over to producing hand sanitizer.

Even during a crisis such as the one we’re currently in, good entrepreneurs recognize opportunity. When one door closes, they look at the situation to see what other ones may be opening. …


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Photo: © fizkes stock.adobe.com

Over the course of their careers, venture capitalists assess a huge number of entrepreneurial founders, most of them in the role of CEO within their organizations. Good VCs have become somewhat adept at identifying those leaders who are most likely to build and grow a successful company, and tend to bank on them accordingly.

What makes for a winning CEO? It goes without saying that they must have the ability to innovate as well as a level of expertise in their industry. A strong work ethic is another expected trait. These are almost table stakes to be an entrepreneur.

Some winning qualities are more innate. In my experience, these are the five intrinsic traits I see repeatedly in those startup CEOs that go on to helm a successful…


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Fourth annual report reveals continued market maturation; $34.5 billion invested in southeastern startups since 2015

In the fourth quarter of what has been a unique and challenging year, we’re proud to be able to offer our fourth annual The State of Startups(SM) in the Southeast eBook, which delivers an overview of the venture capital and startup ecosystem in the region. This year’s report takes an in-depth look at startup activity in the southeastern United States over the five-and-a-half-year period from January 1, 2015, through June 30, 2020. Unsurprisingly, much of it focuses on how the global COVID-19 pandemic affected the startup investment market in the Southeast.

While last year’s report discovered that the rate of maturation in the Southeast was actually exceeding that of the major Innovation Hubs, we wondered whether that trend would continue given the pandemic and 2020 economy. …


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Photo: © Christian Horz — stock.adobe.com

It seems that most people, at some time, have what they think is a good idea for a new product or service. Not everyone goes so far as to put a business plan into action, of course, although 62 percent of Americans say they want to make their dream of owning a business a reality.

But the true reality is that while good ideas abound, simply having one doesn’t necessarily make for a good business. Multiple factors come into play that can determine the health of a new company, from cash flow and timing to go-to-market strategy. …


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Photo credit: © Vittaya_25 — stock.adobe.com

When raising capital, not all startups have options-they only receive one term sheet from one interested investor. And that should be celebrated. However, some startups are “hot” enough to attract multiple VCs.

In such cases, the prevailing determinant on who to select is to go with the investor offering the highest post-money valuation. While pre-money valuation refers to what a company is valued at prior to funding, post-money valuation is what a company is worth following the investment that is about to be made.

On the surface, going with the higher valuation makes a lot of sense, since there will be less dilution of your ownership of the business that you’ve built. For example, a $2 million investment into a company valued at $10 million post money buys a larger percentage (20%) of the business than the same $2 million invested in a company valued at $20 million post money (10%). …


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Photo credit: © highwaystarz — stock.adobe.com

Startups that focus on the wrong priorities are likely to fail.

Creating a startup business is a lot like building a house. You can have high-quality materials and the most skilled laborers, but if things aren’t done in the right order, or you try to skip a step, you’ll end up with a shoddy structure that won’t stand the test of time. Imagine putting in the drywall before you’ve installed the plumbing; that mistake will cost time and money, and could torpedo the project before the “for sale” sign ever goes up.

If you want to create a startup with little chance for success, these are the operational missteps to ensure your eventual…


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Photo Credit: © finnegan stock.adobe.com

Saying “it’s not fair” won’t get you there. To be the best, you have to beat everyone.

As a youth and young adult, I was always involved in team sports which eventually led me to a position on the Princeton rowing team during college. Later, I became a member of the U.S. National Rowing Team and was fortunate to race in three world championships.

During these experiences, I competed at a high level with other athletes who were extraordinarily driven and talented. …

About

Mark Flickinger

Venture Capitalist at BIP Capital, partnering with companies to accelerate their growth and help them achieve success. http://bipcapital.com

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