Augusta,GA is well on its way to establishing itself as a world class cyber and tech business community.
People and companies from around the globe have started to take notice of our town and we are on the fast track to success! Augusta is starting to produce a lot of Seed Stage companies and the goal is to get these companies to five million in revenue.
Why five million?
Five million is a turning point for a company, it says that the company has established itself and has a product or service that customers want or need.
When a company reaches the five million dollar mark, they are at the point where venture capital firms can justify the due diligence cost associated with putting together a deal.
Let’s walk through this entire process and look at the road map for success:
- What is a Seed Stage Company and Who Can Start One?
- What is the biggest obstacle to growth?
- What happens when a company hits five million?
- Who is interested in 5 million dollar companies?
- Get your company in front of the right people
What is a Seed Company and Who Can Start One?
At this stage, a company is trying to figure out what services or products to offer and who exactly will buy it. There are a lot of mistakes made at this stage. An incorrect team member or an ill thought out cap table can spell disaster out of the gate for a young company.
Anyone can start a small business if you have a skill set that can be translated into a product or service that someone is interested in purchasing. Most people don’t see themselves as an entrepreneur. This perception typically changes over time as they gain experience and confidence.
What is the biggest obstacle to growth?
There are a lot of obstacles to business growth, but the biggest one I run into all the time is the man in the mirror.
What does that mean?
The person you look at every morning in the mirror is sometimes your best friend and always your worst enemy. I learned this by reading the great Napoleon Hill.
I’ll give an example:
The tech guy who thinks he is a CEO is his own worst enemy and that of the company. I see this all of the time. One guy (or gal) steps up in the company and says, “I’ll take the CEO role”.
What qualifies them to be a CEO? Nothing.
It’s this thinking that harms more small companies than anything else. Go out and find a team member who has business experience. It will save the company years of on the job training and from making mistakes that will possible kill the company as a whole.
Don’t be your own worst enemy. If you can’t find a business leader for your company, then hire a business coach.
What happens when a company hits five million?
When your company hits five million in revenue all of your problems go away.
When your company gets to this point, you are now big enough for venture capital firms to start looking at you as a Series A investment. VC firms vary in what they focus on and the size of their investments, so it’s not a one size fits all scenario.
Your focus will shift from establishing the company to growing the company to 50 or 100 million in revenue. To do this, you will need professional help from people who specialize in companies of this size.
I personally like focusing on smaller companies and trying to get them to the five million dollar mark. This is one of the sweet spots for Augusta right now. The revenue numbers (Sweet Spot) will get much larger as the private sector grows in Augusta over the next several years.
If you are in the government contracting business, then getting to these marks will come more quickly because of the sheer size of the government contract. Quick question, would you rather have a 50 million dollar government contract at a 5% margin, or a private sector company that grossed 10 million and had a 50% margin?
Who is interested in 5 million dollar companies?
I have spoken with VC’s and they point out that the 5 to 10 million range is what they are looking for when it comes to companies which they are interested in purchasing or investing in.
Large banks have now basically turned into tech companies and they are looking to outright purchase small cyber security companies that meet their needs.
We are watching a market being formed in Augusta where larger companies will buy up smaller innovative companies. Think about when Facebook purchased Instagram. It was easier for Facebook to purchase the company with the IP rather than develop it all themselves.
In Augusta, its all about cyber security and software as a service and that is where our focus needs to stay. When it comes to cyber security, I will put Augusta,GA up against Palo Alto any day of the week.
Get your company in front of the right people
So how do you get your company in front of the right people (Bankers, VC’s, etc)? In the past, that was pretty hard to do in Augusta,GA. Now that has all changed since cyber has basically taken over the city and as Augusta is emerging as a world class expert in the field of cyber security.
One way you can get your company in front of the right people is to get your company on the stage at the Invest Augusta Conference!
With bankers, top brass, and large companies in the audience, your company will get noticed by the right people.
If you have a company that is 100% focused on Government contracting, then Technet or the cyber battle lab event is an option for you.
No matter if your company is straight government contracting or you service the private sector, things are looking good in Augusta,GA!
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