Finding John

While I haven’t posted anything about the venture capital scene in Orlando for a while, a few things popped up recently that are worth sharing. Most notably, the Sentinel ran a story this morning titled Venture Funds Drying up in Central Florida.

While Burnett’s diagnosis confirms the assertions I made in a previous post: Orlando’s early-stage venture capital needs, I didn’t really want to be right, especially now that I’m leading the charge for a start-up that will need VC or Angel investment within the next 6 months.

The venture capital environment in Orlando has seen a dramatic shift towards investing in more conservative and maturing businesses and away from the cutting-edge start-ups whose payout potential is higher but whose risk/reward ratio is hard for Central Florida VCs to swallow.

Early stage start-ups are, therefore, at a loss for a dependable and local source of institutional financing. This leaves them the option of self funding or seeking aid from Angel investors and while Orlando does have its fair share of wealthy individuals, apprising them of the growth opportunities that funding early stage ventures provides, presents its own set of challenges. Even our local Angel firm the Winter Park Angels prefers to invest in companies whose maturity and capital requirements approach the 2 year and $2 million dollar mark, leaving the early stage and seed money needs of area star-ups underfunded.

There does however seem to be a desire on the part of these high net worth individuals to gain a better understanding of this opportunity, evidenced by the oversold status of an upcoming workshop entitled: Investor Overview Seminar for Accredited Investors. This UCF Venture Lab sponsored event has the stated goal of “sharing best practices and tips for angel investors to form angel investment groups, conduct proper investment due diligence, and implement policies and infrastructure to support a successful angel investor group or network.”

The UCF Venture Lab is an incredible resource for those of us striving to breathe life into a new venture. Their team has been instrumental in helping me develop our business strategy, pointing us in the right direction for market analysis, helping us shape our pitch and has even sat with me and had a round table brain storming session. The fact that they diligently serve the start-up community from the inside and also work to educate the outside world to our value, is worthy of my applause.

In my typical contrarian fashion, the more bleak the outlook becomes the more optimistic I am that we in start-up businesses are at the right place at the right time. Five years from now, and maybe as soon as 3, I can foresee a vibrant venture capital environment, in which the valuable entrepreneurial and technological capital of the local start-up garners both the attention and funding it requires to stay planted in Orlando’s fertile soil. As more companies find profitability and longevity in the Central Florida sun the gravitational pull of VC funds to area start-ups will only grow stronger.