Lisa Calhoun
Welcome everyone to the Atlanta Startup Podcast. I’m Lisa Calhoun, the founder of Valor Ventures and your host today. I have a terrific guest with me. Mike Ross, I’m so glad you’re here.
Mike Ross
A pleasure to be here.
Lisa Calhoun
Let me jump into a little brief intro for you, Mike, and I want you to fill in the things that I’ve missed. But I know you’re a humble man and you probably won’t say these things about yourself. You’re famous as the president of MHR International, managing billions of dollars in construction projects. What’s even better, is that you’ve directed over 2 billion so far, to diverse and underrepresented founders, which I think is just amazing. Thank you for that. Before that, you actually studied the law, and I can’t wait to hear more about how the laws affected your life. I definitely want to hear some about that and of course, you’re a Morehouse man. How did you get involved in the innovation ecosystem?
Mike Ross
I’m one of the few people in the tech ecosystem that remembers when the only groups in Atlanta were grit and cameo in the SOS band and when I saw LA and Babyface come to Atlanta, and what they did in the music industry and it took off, I was really impressed with that, but I didn’t make any money off of it. I saw Tyler Perry, and Will Packer comes to town, and the film industry took off and I didn’t make any money off of that, either. So I was saying, “Well, I don’t want to get caught out in the code. So what’s the next thing?” I looked around and I said, “It’s probably gonna be technology.” In a lot of ways, Atlanta is the African American cultural capital of the world and I just felt that the black tech ecosystem was gonna take off and I want to be a part of it.
Lisa Calhoun
Well, I tell you what, you’ve been a part of it in so many ways, from Partpick, which is now become a famous national brand, and the work that’s been done by that founder and then there’s just so many. Tell us how you got started in investing in tech, and bringing technology forward in Atlanta. It is a long history and I don’t know all of it myself, and I’d love to know.
Mike Ross
It was 2012/2013/2014, somewhere around there and I just went over, that’s when Hyperpotamus was a physical place to go and I started hanging out over there and then many of the young people that were there. Paul Judge was there at that time, although he was upstairs, he was in the same building over to build more. Candace Mitchell of Texturize was there. I started meeting them and decided to invest in those companies and if you write a couple of checks, people kind of find their way to you. I was paying tuition as a lot of early-stage investors do. But it was just a wonderful group of people and it was exciting to me/ James Harris was another guy that I met later on, and then Raji Samson and so those of people that have been kind of around for several years before it became the in vogue thing and it was a delight to work with all of these young, brilliant people who not only have built companies but have gone on to work in other accelerators and support systems for the new generation of ideas, entrepreneurs of color, so it’s really been an exhilarating ride for me, and I’ve enjoyed it.
Lisa Calhoun
Definitely, the adventure seems to be just beginning. Even though it’s been going on, the momentum’s gathering and Atlanta is becoming a rising star on the national investor scene. I think that it’s black technology that’s really cutting through the noise, and showing that Atlanta has something different to offer. For example, with so many investors around the country, realizing that the customer base of the future doesn’t look like the customer base of the past. It was whites becoming a minority in this country. If your product is not tuned properly for a more diverse audience, you’re just going to miss an audience and so that’s an interesting place that I think investors across the country are starting to look to Atlanta to lead and showcase. What do you think has been some of the keys to momentum in Atlanta? What were turning points that mattered to you or that you’re looking for, if you can’t recall, from the past? What’s the turning point in your mind?
Mike Ross
Atlanta has been a historical place where African Americans have done well in business. If you look at the Atlanta University Center, Spelman, Morehouse, Morris, Brown, Clark, ITC, and now Morehouse School of Medicine. If you look at the early entrepreneurs like Alonzo, Herndon, and Jesse Layton, Yates, and Milton drugstore, we’ve got a history of black entrepreneurship here that goes back over 100 years. If you come up from into the 50s and you talk about Herman Russell and Jesse Hill, and the contributions they made, and, of course, the big turning point was, when Maynard Jackson became the mayor of Atlanta, and along with his co-pilot, a person that nobody ever talks about much, David Franklin, who was the former husband of the former mayor, those two guys had a vision of black entrepreneurship that was way ahead of its time. Maynard Jackson started the Minority Business Program that has become famous all over the country and actually, I was a US consultant to the Republic of South Africa. We actually took the Atlanta Minority Business Program to South Africa, which became the underpinning of the black empowerment program there. So not only has Atlanta had a national effect, but it’s an international thing and so, it was only a matter of time that we were going to prosper in the technology industry because we’ve done it in the construction industry. We’ve done it in the airport concessions industry, we’ve done it among lawyers, and architects, and all kinds of professional services. We did it in music, and we did it in film. So, our emergence as a black tech ecosystem here is just a natural progression of the history of entrepreneurship in Atlanta.
Lisa Calhoun
Wow, that’s a terrific perspective. Mike, thank you for drawing those lines so clearly. That makes a ton of sense. What do you think we’ll see in 2021? I’m going to ask you to put your future hat on, and just let our listeners know what you’re expecting next year. I mean, 2020 has been a year unlike any other and I think that means of course, 2021 is going to be quite different, too.
Mike Ross
First, we’ve gotta get through the pandemic, and there seems to be light at the end of the tunnel. Hopefully with the vaccine, and hopefully we can begin to get back to a normal lifestyle. It’s had a devastating effect on all businesses and a lot of times they say when America catches a cold, black Americans catch pneumonia. The beginning of 2021 is going to be tough but if you look at what Jewel Burks Solomon is doing with Google for Startups, if you look at what Barry Givens is doing with Techstars, if you look at what you’ve done with Startup Runway, if you look at what Ryan Wilson is doing The Gathering Spot, I think you have a mass of successful entrepreneurs that are attracting entrepreneurs from other parts of the country because success begets success and so, therefore, people are not saying, “Well, I got to go to the Silicon Valley to make it.”, “I got to go to New York.”, “I got to go to Austin or LA.” But I think, particularly entrepreneurs of color, like Chino with CapWay are coming to Atlanta, because they just see the opportunities for diverse entrepreneurs and that there’s a sub support system here that they don’t find in some of these other places. So while we gotta get through the pandemic, I think there are so many great, exciting entrepreneurs coming here, and that we’re going to have a robust ecosystem for quite a while.
Lisa Calhoun
I like the sound of that and I tell you what, investing in CapWay and Sheena Allen, investing in Ryan and what they’re doing at The Gathering Spot, it gives me a lot of comfort about the future looking at the growth and excitement of their businesses and other businesses in our ecosystem. One of the things that strike me and I think we’ve talked about this before, but the southeast with 40% of the US population is also a crucible for the future because we have the greatest density of underrepresented founders and for that matter of people in the country. What works here, can scale nationally, if what doesn’t work here can also be your problem nationally. I think we have a huge opportunity to get it right and that’s certainly where I like putting my energy. But I know that’s where you’ve been putting your energy a long time. Thank you so much for being a huge supporter of Startup Runway, it’s meant the world. Seeing you and getting a hold of you in person or have you supported us as a sponsor. Also, thank you so much. I wonder, based on your experiences with Startup Runway, but also so many other pitch events over the years, what have you seen that works when founders, especially founders of color, go to raise capital?
Mike Ross
I’ll tell you what I look for. I’m looking for the idea and I’m looking for whether or not they have customers. I’m looking for whether or not they’ve actually been to an accelerator where they can get support. I’m looking at the industry. I’m looking at competitors. I’m looking at how big the opportunity is and what is their competitive advantage. A lot of times I’m really looking at the individual, whether or not they’re passionate, whether or not they’re resilient, whether or not they’re tenacious. Lisa, a lot of times you end up pivoting and so the resilience, creativity, and tenacity of the founders is really key in whether or not people make it or break it. I think when people are looking for investments, they have to have a tight ship and that’s why I always promote that people go to accelerators, or they go to places like Startup Runway, where they’re not just creating something out of nothing. Where you have people that are there that really can help you because it’s not easy getting out here trying to find your way. It’s good to have a good idea, but it’s also good to have, in many cases, it is good to have a technical co-founder. You need assistance, you need mentors, you need coaching, you need all of these kinds of things. One of the main things I’m looking for is whether or not somebody is actually coachable because if they don’t listen, and I know you’ve probably experienced this, everybody that comes to your office thinks that they’re the next Mark Zuckerberg. “I got the baddest thing out there, I got the oddest thing. There’s no way I’m gonna lose.” Sometimes you gotta just kind of calm them down a little bit and not be rude but just say, “Hey, you were trying to manage expectations here a little bit. You can have a good business. To have a successful business, you don’t have to be Facebook, you don’t have to be Google. But focus on building a good business with good business principles, and I think you can be successful and you can make money and you can sell your company and go back and start another.”
Lisa Calhoun
Both you and I, as founders, I think we can only relate to that living in the future and that irrational self-confidence and in your own idea, your belief in what’s possible, I would never want to rain on that parade with the founder, but like you, I definitely want to tie it down to some milestones in the next quarter. It’s like, ‘Hey, I want to go to the future with you. But let’s talk about the next quarter and what we can get done.” It’s always a fun exercise. It never loses fun for me. I’d like to switch the lens to the investors a little bit. Both you and I have been in the Atlanta market for quite some time, more than a minute, you especially have a history of knowing a lot about the other angels who’ve seen funds come and go. I wonder what you think is the best investor mind for some of these exciting technologies, especially for founders of color. What are some things you’ve seen in great Investors, some things you’ve seen in investors that aren’t doing such a good job, just send a generic high-level way?
Mike Ross
When I was a very conservative investor before I got into this, my financial planner was like, I would only pick up kind of blue-chip stocks and things of that sort. I think one of the big things is that you have to go to a paradigm shift to some extent if you want to get into this game. Because in this game, if you hit one or two out of 10, then you’re doing good. It’s a totally different mentality that most people are taught. When they thought about investing, one of the things is that I think you’ve got to go through the paradigm shift. You have to be willing to take risks. You also have to have patience because these things don’t happen overnight. These companies don’t startup. It’s rare when a company starts up in a year or two and it’s got to exist in a year or, or two or three. So you’ve got to have patience, and you do have to be able to discern to the best of your ability because the early stage is a lot of risks. You’ve got to be able to discern whether or not you think that this company can make it and that’s why I think relying on the individual and what kind of character traits that they have is so important. A lot of times, they’re just not going to make it because they don’t have the resiliency that it takes to make it in and I’ve been very impressed with many of the women entrepreneurs that I’ve met. The sheer tenacity, the sheer resiliency that I’ve seen from a lot of women entrepreneurs has always been impressive to me. But I think from an investor’s standpoint, you definitely got to change your perspective. You have to have patience, you have to do your due diligence. I always enjoy talking to other investors. I also believe this, if you want to be great, you got to study the greats and so I’ve been very fortunate to forge a relationship with somebody like Sig Mosley, who is one of the best that ever did it, certainly in the south who has had an incredible amount of exits out of companies that he’s invested in. So picking the brain and co-investing with somebody like that has been a tremendous help to me. If you want to get in this game, I think you can do well in it, but you gotta be patient, you got to be discerning and you got to stay positive
Lisa Calhoun
And be ready to pay a little tuition as you’ve said.
Mike Ross
No doubt about it.
Lisa Calhoun
Those are some great points. I’m going to try to box you in a little bit with a multiple-choice question. Let’s play diagnose the ecosystem. A lot of people have opinions inside and outside of our ecosystem about Atlanta. I’m just trying to get to your opinion. What would you say is where we need the most development? Three choices; 1) pipeline of an investable startup, 2) angels who write some of those first check preseed concept companies, 3) early-stage investors who write those larger equity checks. Where do you think we need to develop the most?
Mike Ross
Well, I think the pipeline is here because we got so many universities. We got Georgia Tech, we got a US Senate, we got George state. I think there’s just so much talent coming into Atlanta every year. I think, the early VCs or early investors, I think that’s growing people like you and Jewel and Paul and people like that.
Lisa Calhoun
Yeah, there’s a lot of us out here doing our best. There’s a number. I think it’s fifteen by the latest count of early or seed-stage funds.
Mike Ross
I remember, there were hardly any, but I think there’s a dearth of angel investors. I think there are people out here that do have money. I think there are people out here that are curious about what’s going on in the technology industry. I think they want to get involved, but I don’t think they know how to get there. I don’t think they know how to get involved, how to stick their toe in the water, and not dive all the way in and so I think that there’s a lack of vehicles that are focused on how to cultivate the angel investing community here. Because a lot of times, the angel investors are the ones that really are the bridge between whether or not you really can get off the ground, and whether or not you can position yourself to give venture capital. In that particular question, I was saying the angel community needs to be cultivated more.
Lisa Calhoun
I tend to agree with you and I definitely underline that we do not have a pipeline problem. We have one of the best ecosystems I believe in the country. The ideas you see cropping up in Silicon Valley, in New York, are cropping up here, too. The difference is it’s easier to get a lot of those high-level concepts especially for consumer-level businesses funded still on the west coast and a lot of times, that’s an angel issue. I reserve the right to change my mind frequently, and often as I encounter new information, but right now, my thoughts are that it’s a confirmation bias problem. I think that Atlanta is one of the most diverse, biggest wealth gaps. Big gaps in employment well, bury your psyche, hyper-local groups of people and if you are an angel, of course, you sit in some spiky little local mountain group of you and your five closest friends or community advocates. But if you reach out to your second level, say the next five over and you say, “I’m thinking about this tremendous company.” You’re going to get blank stares. Because there are so many silos of information, even in our city. I think that that’s where a lot of deals break down. A lack of core muscle strings in going after your own beliefs and that may be something that we just need to learn about more in our city because I do think that if you knew that it could be right on a deal, you need to be both right and nonconsensus. The best investors and other people don’t agree with them and as luck perhaps would have it, they happen to be right. The fact that a lot of people agree with you on a great investment does not actually help support the idea that you’re going to make money. I don’t think that’s widely distributed in Atlanta’s headspace
Mike Ross
Atlanta’s real estate and construction down remember and a lot of people are kind of oriented toward real estate and construction because real estate is something tangible. You can actually go and drive and see your investment. This is esoteric. It’s not something that you can really touch and so sometimes people will have an opportunity and have difficulty in trying to just put their hands on exactly what they’re investing in. I think if we had a few more programs that could focus on people that have disposable income and educate them on where they can place money in it, that would cut down on their risk. I think it would be more helpful to the total ecosystem.
Lisa Calhoun
Absolutely. Another kind of crazy question out of the corner pocket, once this covid 19 pandemic is really in the rearview mirror, let’s cross our fingers and say five years from now because I really want to put a window this far into the future ten years if you need to, do you think COVID-19 will have been a net positive or negative for the Atlanta tech community?
Mike Ross
Well, the net negative part is the lives that have been lost. We’ll never get them back and so from that perspective, it’s just a big negative thing. You can get into a whole bunch of politics. I personally think that we could have gotten out of this quicker than we did. I looked at the New York Times, a map of what’s going on in the country and what’s going on in the world, and I look at it every day, and what’s very noticeable to me is that a lot of the problems in the world like Europe, North America, and South America, but it seems like Asia and Africa, for whatever reasons, got their arms around this thing pretty quickly and decided to do whatever they are going to do. They’re not having the same kind of problems that we’re having. I would say, it’s a net negative, but we have to be prepared for a crisis like this. We were caught off guard. We had to have a pandemic in 100 years. For the most part, I think, is negative. But I do think this, I do think I’m a hopeful person. I do think we’re resilient. As a company, I think if we are in this country we would use diversity as a strength as opposed to as a weakness. In other words, people would be more inclusive and more diverse and play the players that are going to be the best representatives of our country, kind of like we do in the Olympics and other endeavors. I think we could be, again, the leader in the world and in everything, but we tend to look at diversity as something negative, and we tend to be exclusive as opposed to inclusive. I think if we do a paradigm shift on that, nobody can compete with us. We’ve got the best universities, we’ve got the best creativity, and if we just took a little bit more of an approach of being inclusive, and recognizing the depths of strength. I think we definitely lead the world.
Lisa Calhoun
We need our players right at the game on this guarding bench, and not having to go through the extra thick tape to make their way and that’s what we have now is the structural bias of this country. We’re holding many of our best back. Call it unintentional or intentional, sometimes that’s a matter of perspective. But it’s reality, it’s absolute reality. My hope is that COVID-19 there’s no way that the people we’ve lost can be construed as some silver lining. Never. But I do hope that as we get the lessons learned from the experience, we are yet still going through and have not solved. The fact that we must tune our country’s policies especially let’s start with health care, around inclusion around not having young white men in colleges be the healthcare standard patients because that’s not the US standard patients and so we’re leaving people out and it’s hurting us. It’s hurting us in every way. Economically, but also, just who we are and our national identity suffers from it. So it’s an interesting time. I do hope that COVID will be the wake-up call that helps pivot the country, or in this pain that we’re sharing together into a new way of thinking. I mean, my husband and I woke up this morning, and he was reading the times, and he said, “We’re having as many people die every day now as 9/11. It’s like 9/11 a day.” If that can’t change us, what would it take if you didn’t have to change? That’s definitely my hope. We’re not so invincible as we thought we were. The health care system, the people, our health care champions, I mean, we need them and they are our heroes, but the structure in which they work needs to be reconstructed. Changes to a little bit of a happier scene, what types of technologies do you see Atlanta truly excelling at since you’ve been watching this game for a minute?
Mike Ross
I think fintech. I think we’re at the forefront of FinTech. I think Kabbage and those companies like Greenlight. I think that the crypto world is extremely exciting. I think we’re on the cutting edge of that with Bitpay and other companies. Financial Services is one that I’m really, really excited about. I think we do fairly well in the healthcare industry as well. I think because we have so many education institutions here of national and world renown, I think education tech is another industry that we can excel in and also the consumer. I know you’ve seen the T-shirts that say Atlanta influences everything. I think one of the industries that I think we really can focus on is the intersection of technology and culture. Because of the music and film industry here, I think we should really, really be a world leader there. eSports I’ve invested in a company access replay, that is in the eSports arena and I think we have a very exciting, burgeoning eSports ecosystem that’s developing in Atlanta. So those are the ones that I’m really excited about right now.
Lisa Calhoun
Awesome. If you’re a young founder listening to this podcast interview and thinking, “Okay, Mike Ross, he knows what he’s talking about. I’ll be following up with him.” But I know that you can’t handle the three/four dozen daily inbounds you already get from founders. Who else should founders also be reaching out to people you think highly of in the tech innovation environment in Atlanta right now who will help them build their businesses?
Mike Ross
Well, I think aside from you, and what you’re doing was Startup Runway, you got Jewel Burks Solomon, Barry Givens, and Justin Dawkins over at Collab Capital. I think they’re doing some really exciting stuff and, of course, The Gathering Spot. Of course, very near to my heart is the Russell Center for Innovation and Entrepreneurship and what Jay Bailey is doing over there is really phenomenal. I look at the Russell Center becoming the Motown of Atlanta where you can create a Smokey Robinson, or Diana Ross, or Marvin Gaye, or Stevie Wonder in technology and they’ve been successful in a lot of their fundraising efforts. I’m looking for some real big exciting things to come out of the Russell center. I would definitely say, “Hey, look, check-in with the Russell center. Go over there and meet Jay Bailey, Burunda Prince, talk to them and sign up and build the company of your dreams.”
Lisa Calhoun
Mike, that is wonderful advice. Thank you so much for sharing your wisdom and your perspective with us today. I really enjoyed it.
Mike Ross
Thank you, Lisa, for inviting me and much more success in Valor Ventures and also in Startup Runway. I think you are an embodiment of the phrase that you can do well and do good at the same time and anytime you need any support from me, just holler.
Lisa Calhoun
I appreciate you. Thank you, Mike. You take care.
Mike Ross
Thank you.
Lisa Calhoun
Bye
Mike Ross
Bye-bye.
Lisa
The Atlanta Startup Podcast is produced by Valor Ventures as a service to the startup and investor community. We couldn’t do it without the support of our sponsors–Atlanta Tech Park, the global innovation center, and Write2Market, Atlanta’s favorite tech, and healthcare marketing firm. If you’d like to get your information on the Atlanta Startup Podcast, our share a message with our listeners, visit us online and check out our affordable rate card. All advertisements here are tax-deductible donations to the Startup Runway Foundation, a nonprofit whose mission is connecting underrepresented founders to their first investor.
