BIA Business Forum & Startup Grind Georgia to Host Top US Expert
Zach Lawrence, an expert in investing and startup fundraising and the Senior Director of the Ohio Tech Angel Fund, is visiting Georgia to participate in the BIA Business Forum and a Startup Grind event this Wednesday, March 22.
Startup Grind is a global network of over 200 chapters and an important opportunity for Tbilisi developers. “There are formal governmental programs and activities but the soul of the entrepreneurial community is the entrepreneurs themselves,” said Colin M. Donohue, an American resident in Georgia. Donohue is actively involved in Startup Grind Georgia and invited Lawrence to speak to the Tbilisi audience.
GEORGIA TODAY met with Zach Lawrence to find out about his extensive experience in startup investing and development and his participation at the BIA Business Forum and Startup Grind.
Tell us about yourself and your experience in working with startups.
I’m based in Columbus, Ohio, and have a consulting firm there called Venture Corp Dev: I focus on critical stage finance and strategy consulting for privately held growth companies. I’ve been doing that for about 2.5 years and I spend a lot of time both helping entrepreneurs directly and also providing services to investors—not those in the same deals, but those who invest in the same companies. I get compliments from both sides for what I’m doing, and for having a deep understanding of how deals work for both sides of the table. One of the beautiful things in angel investing is not buying a share of a big public company where you have to wait for someone else to perform or not perform, making the investment go up or down in value. The great thing about being an angel investor is the ability to actually control the destiny of your investment by providing value to the entrepreneur, whether through informal advice or formally as a board member; being able to apply your business experience to help the entrepreneur and therefore help increase the value of that investment and the chance of that investment being successful.
Why do you think startups are important? How can they be good for Georgia?
I think startups are important for many reasons. I’m still doing my research, and learning more about the climate in Georgia, so a lot of my empirical data would be based on my experience in the US, but I found startups to be a tremendous vehicle for economic development and for talent cultivation. For example, the Ohio Tech Angel Fund’s portfolio of companies, according to the last stats I saw published, almost 3000 companies had employed over 400 people with an average salary above $85,000—and these are companies that didn’t exist a few years ago and were started by entrepreneurs who had a great idea, a strong conviction in that idea, and partnered with angel investors and a number of public-private development groups who had access not only to capital but also to experts and expertise that really pulled things together. I think it’s also good for entrepreneurs and economic development because it’s a rare breed of someone who can turn an idea into a business that has a market that can actually generate revenue and grow, and the more people that can get experience doing that, the better. What often happens, even with unsuccessful startup companies, is that you have people that get very valuable experience working in the startups in roles they may be able to transfer to other business ventures or startups. One team of five, even if their company doesn’t make it, can turn into entrepreneurs who set up their own companies down the line, and it really has growth potential because of the experiential value that is built within entrepreneurial communities.
What are the components of a successful startup or of being a successful entrepreneur?
It’s always complicated and there are always several factors that are going to determine that success. You have to have a strong, conscientious entrepreneur, a strong management team; you have to have a good idea, whether a specific technology or a business model; you have to have a defensible competitive edge somehow, and it has to be able to be applied to a large market. Even the greatest idea in the world can’t succeed if only five people want to buy it, whereas you can have maybe the least sophisticated solution but can reach millions of people. Another big part of it is access to mentors: to experts who can provide insights from their experience and connections to other resources. Finally, there has to be access to capital and usually that’s private capital.
One of the more successful models in the US is public-private partnership, where the government enters either through direct support, through matching the dollars of private investment, or through tax policy or even through tax incentives.
What are the main challenges for entrepreneurs and startups?
It’s always a balancing act; there are always more things to do than there is time to do them. I wouldn’t say it’s a lack of anything, maybe just unfamiliarity, new aspects of the business that they are looking at for the first time. So, maybe one of the biggest challenges is finding complimentary talent. There’s a group called Startup Genome that looked at thousands of successful and unsuccessful startups and one of the key determinants of success has been identified as there being at least two founders of different skill sets, technical and non-technical for example; a couple of people with a diversity of talents and diversity of thoughts.
What do you think of the Georgian startup scene?
When I heard about some of the exciting things Colin is doing with Startup Grind and some of the other opportunities within the Tbilisi technology scene, I realized there are a lot of entrepreneurs here who are willing to work and experts willing to mentor and provide relational expertise and access to their networks, plus a pool of capital that is willing to take some risk. It sounds like there’s an opportunity to take some of those raw resources and cultivate, and put a more formalized process or formalized structure to make it a more concerted, comprehensive support network for entrepreneurs or entrepreneurial investors. I just started my trip and I’m very excited to participate in the BIA Forum while I’m here, as well as to be a guest at Startup Grind this week. I think Tbilisi is an absolutely beautiful city and I’m excited to see all the strong cultural heritage of this very old and very interesting city.
For the BIA Forum, my contribution to the panel will mainly be focused from the investor side for best practices of due diligence; pre-investment steps that can be taken to increase the chance of investment success. For the Startup Grind, I will focus more on the entrepreneurial point of view, and how the investor looks at entrepreneurs and startups, and how that can help an entrepreneur understand the investor mindset. What I’ve found with my experience with Startup Grind in Columbus is that no matter what company you’re running, whether it’s a software startup, a medical device company or even a retailer, no matter how many differences there are in the business, there are going to be common challenges and common experiences they share. Being able to have that networking with each other is very valuable and it’s a key to success. Without entrepreneurs, there are no angel investors, there are no venture capital funds—it all starts with an entrepreneur who has an idea.