Can Atlanta be a top tech hub?

Explore Atlanta's tech scene, its strengths, challenges, and funding opportunities for entrepreneurs.

Author

Toby Egbuna
October 23, 2024

Welcome back!

I’m excited to introduce the Equity Shift newsletter – formerly known as Finessing Funding.

**I started Finessing Funding with one goal: to help underrepresented founders get funded. I had such a difficult time raising our pre-seed round for Chezie, but I also learned a lot about what it takes to raise capital, and I wanted to share that with other founders so they could avoid the mistakes I made.

Finessing Funding grew to 15+ articles, an e-book, and 500+ subscribers, but then, writing it started to get tricky because I felt boxed in to only talking about fundraising.

I took a few months off from writing to consider how to use this newsletter to discuss every aspect of being a founder. And now, we’re back!

Equity Shift is about helping founders with every facet of building a company from nothing. The name represents my goal of changing the paradigm by equipping other diverse founders with the knowledge to construct life-changing companies.

What better way to launch Equity Shift than by talking about something that’s been nagging me about the very place I am writing this from and where Chezie is based?

Let’s talk about Atlanta’s tech scene.

Earlier this month, Atlanta hosted the annual Venture Atlanta conference. I didn’t attend most of the events because I was returning from a long road trip, but I did make it to the Venture Atlanta Alumni Dinner in Midtown. Interestingly, Goodie Nation was hosting its Intentionally Good Summit Happy Hour just a mile down the street that night.

At the Venture Atlanta alumni dinner, I was surrounded by about 250 people, and I could count the number of Black folks on one hand. The vibe was super formal—think blazers and dress shoes. As a Black founder, I felt a bit out of place. I wished I’d gone to the Goodie Nation because those events feel like home. They’re all about community and connection and full of people from all backgrounds. The Venture Atlanta Dinner, though significant, felt like a corporate networking event.

Since that night, I’ve been thinking about Atlanta’s startup and tech scene. It’s excellent, and I believe there’s no better place for a Black founder to build a company. Still, Atlanta is only a few changes away from being a top-tier tech hub that attracts founders to build their companies here over traditional hubs like San Francisco and NY or emerging hubs like Austin and Miami.

Where Atlanta Shines

Let’s talk about what Atlanta has going for it:

  1. Diverse Communities: Whatever you’re into, you can find it in Atlanta. Communities like Goodie Nation and tech co-working spaces like Atlanta Tech Village provide ample space for founders of all identities.

  2. Rich Diversity: Atlanta is 61% non-white. Couple that with a rich cultural history; you can see why different founders would be interested in building companies here.

  3. Low Cost of Living: Compared to places like San Francisco and New York, Atlanta is way more affordable. This makes it easier for founders to settle and grow their businesses without breaking the bank.

  4. Access to Big Corporations: We’ve got a ton of Fortune 500 companies here—Delta, Home Depot, Coca-Cola—giving B2B tech founders a chance to connect with potential clients. You also will consistently see big tech companies like Microsoft and Apple considering opening offices in Atlanta to establish a presence on the East Coast.

Where Atlanta Struggles

Though Atlanta has plenty going for it, as shown in the Venture Atlanta story, it has room for growth. Here are some challenges we’re facing:

  1. Poor Branding: When people think of Atlanta, they think of music and culture, not tech. No one wants to be an afterthought.

  2. Buttoned-Up Culture: Atlanta's dominant companies are big corporations with traditional corporate cultures. The vibe here is more formal than I’ve seen in SF or NYC.

  3. Strict Funding from VCs: I wrote about this on LinkedIn a few weeks ago, but Atlanta’s VCs are very conservative. It’s not uncommon for a pre-seed investor to expect $250k in ARR before they invest. Those high standards push founders away from building here because they want to be close to VCs with less strict requirements.

  4. Segmented Communities: Though Atlanta has many different communities, the downside is that those communities are super segmented. Goodie Nation doesn’t collaborate with Tech Village, which doesn’t collaborate with ATDC, etc. This is an ample missed opportunity for the city and founders looking to network more broadly.

Atlanta vs. Other Startup Hubs

We know that Atlanta will never be a tier 1 tech hub amongst the ranks of New York or San Francisco, but there’s no reason this city can’t be the best among the tier 2 hubs of Austin, Boston, Seattle, or Miami.

If we look at the other hubs, we see a few distinctions:

  • Miami: Miami’s tech scene has been booming lately, especially in fintech and crypto. It might be a step ahead of us regarding startup activity and investment. It’s also established a reputation as a ‘tech bro’ city.

  • Seattle: With giants like Amazon and Microsoft, Seattle is a well-established tech hub with a larger talent pool and more investment flowing in.

  • Boston: Boston’s tech ecosystem is mature and diverse, especially in biotech, robotics, and AI. It doesn’t hurt that Boston is also home to some of the best universities in the world.

  • Austin, TX: Austin is probably the most similar to Atlanta in terms of maturity, but it has more venture capital and a solid reputation for innovation. Anecdotally, more founders are considering moving to Austin than to Atlanta.

This is not to say that venture capital is the only marker of a booming tech hub, but we have to consider the amount of funding in each of these cities, as proximity with financing is a big reason founders choose to settle in certain places.

2023 VC funding by city

Per Dealroom, Atlanta received just $1.3B in VC funding in 2023, less than half of the next closest city of the tier 2 hubs.

Rebranding Atlanta: Actionable Steps

This is to say that Atlanta has potential, but the city has plenty of work to do. Here’s what I’d love to see Atlanta’s tech leaders (myself included) do to build the city’s startup tech scene and start to encourage people to choose Atlanta over some of the other tier 1 or 2 cities.

Lean into the Diversity:

Atlanta is not like the other tech hubs, and that’s a good thing. Atlanta can leverage its cultural diversity and rebrand itself as the tech hub for ALL, not just white men with plenty of funding to afford to live there.

Create Collaborative Spaces:

Though the various communities in Atlanta are good, we need a more cohesive and collaborative way for them to come together. I’ve heard of other tech hubs having a Slack channel for all founders to network, and there’s no reason Atlanta can’t do the same.

Invest in Early-Stage Funding:

It’s going to be hard to change the way that VCs in Atlanta do business right away, so it’d be great to see funding opportunities open up for early-stage tech founders who need just a little cash to get their ideas off the ground. The Invest Atlanta team has already started doing this, but we need it at a larger scale.

If you have thoughts, questions, feedback, or anything you want to share, reply to this email! Would love to hear from you 🤝.

Catch you next week,

Toby

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