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July 2014

The Guide To The Atlanta Startup Scene

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1995-1998Morehouse College

1998-2002Georgia Tech

2000-2014CipherTrust Secure Computing Purewire Barracuda Pindrop TechSquare Labs

1995Moved to Atlanta

TIMELINE!I’m often asked about the Atlanta startup scene and thought there should be something that tries to explain all of the excitement and progress. Allen convinced me to stay up one night and pull together my thoughts. (And then it took 3 nights.) I hope that you find it useful. Please send me any questions or mistakes: PJudge@PJudge.com. We are happy to host anyone that would like to visit the Atlanta startup scene. !Bio written in third-person: (Imagine Samuel Jackson voice) Paul is a serial entrepreneur and noted scholar. He was CTO of CipherTrust acquired by Secure Computing then McAfee, cofounder of Purewire acquired by Barracuda and cofounder of Pindrop. He has invested in 30 tech startups. He currently holds over 30 patents and was recognized by MIT’s Technology Review Magazine as one of the Top 100 young innovators in the world. Paul has contributed to national media outlets including Wall Street Journal and TechCrunch. He is based in Atlanta and spends one week per month in Silicon Valley. !!

ABOUT ME - AND WHY I MADE THIS

Paul Judge, PhD @PaulJudge

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1. Atlanta's past tech success 2. 25 startups to watch 3. startups by sector 4. investors 5. spaces 6. schools 7. government 8. content, media & events 9. service providers 10. F1000 companies 11. culture 12. living in Atlanta

THE GUIDE TO THE ATLANTA STARTUP SCENE OUTLINE

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“High expectations are the key to everything.” –Sam Walton

ATLANTA’S TECH SUCCESS - A LOOK AT THE PAST

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5VENTURE DEALS IN GEORGIA - Q1 2012 - Q1 2014

1.1% OF US DEALS

$781 MILLION

104 VENTURE

DEALS

TOTAL DEALS 104 Deals since 2012

TOTAL DOLLARS The average investment was $7.5 Million

PORTION OF MARKET This represented 1.1% of all deals and deal dollars in the US in that period.

Source: pwcmoneytree.com

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6OVER 100 EXITS IN ATLANTA -TOTAL $60 BILLION IN VALUE

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7THE ACQUIRERS - ACQUIRED ATLANTA COMPANIES

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8PUBLICLY TRADED TECH COMPANIES - IN ATLANTA

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1. AirWatch was acquired in 2014 for $1.4 billion by VMWare. ! ! (founded in 2003, acquired in 2014)

2. Radiant Systems was acquired in 2011 by NCR for $1.2 billion. ! ! (founded in 1985, IPOed in 1997, acquired in 2011)

3. Witness Systems was acquired in 2007 to Verint for $1 billion. ! ! ! (founded 1988, IPOed in 1997, acquired in 2007) 4. Per-Se Technologies was acquired in 2007 by McKesson for $1.8 billion.

! ! (founded in 1985, IPOed in 2004, acquired in 2007) 5. Internet Security Systems was acquired in 2006 by IBM for $1.3 billion.

! ! (founded in 1994, IPOed in 1998, acquired in 2006) 6. Scientific Atlanta was acquired in 2006 by Cisco for $6.9 billion.

! ! (founded in 1951, IPOed in 1959, acquired in 2006) 7. TradeX was acquired by Ariba for $5.6 billion in 2000. 8. MindSpring merged with EarthLink in 2000.

! ! MindSpring was worth about $1.3 billion at the time. 9. WebMD merged with Healtheon in 1999 in a $7.9 billion deal.

UNICORNS - IN ATLANTA

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10INFOSEC EXITS IN ATLANTA - $4 BILLION

$4B INFOSEC

EXITS

CURRENT INFOSEC COMPANIES

!•Ionic

•Pindrop

•Endgame

•Damballa

$4 BILLION IN INFOSEC EXITS IN ATLANTA !

Airwatch, Alan Dabbiere and John Marshall , $1.5B

ISS, Chris Klaus and Tom Noonan, $1.3 B

Secureworks, Mike Cote and Jon Ramsey, $612 M

CipherTrust, Jay Chaudhry and Paul Judge, $273 M

AirDefense, Jay Chaudhry and Mike Potts, $90 M

SPI Dynamics, Caleb Sima and Brian Cohen, $90 M

Purewire, Paul Judge and Mike Van Bruinisse, $XX M

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11MARKETING AND SALES AUTOMATION EXITS IN ATLANTA - $750 MILLION

$750M S&M AUTO

EXITS

CURRENT S&M AUTOMATION COMPANIES

!•Mailchimp

•WhatCounts

•Salesloft

•InsightPool

$750 MILLION IN SALES AND MARKETING AUTOMATION EXITS IN ATLANTA !

Vitrue, Reggie Bradford $300 M

Silverpop, Bill Nussey, $270 M

Pardot, David Cummings, $95 M

BLiNQ Media, David Williams, $90 M

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12RANKED #8 METRO AREA FOR ACQUISITIONS - 13 IN 2013

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1325 ATLANTA STARTUPS TO WATCH -GROWTH STAGE

“The way to get started is to quit talking and begin doing.” —Walt Disney

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1. Autotrader: $1Billion in revenue.!2. Cardlytics: $50M revenue in 2013 and $104M in funding. !3. Clearleap: $20M in revenue and $16M in funding.!4. CloudSherpas: $75M in revenue in 2012.!5. Damballa: $44M in funding.!6. eFolder: $26M in funding.!7. Endochoice: $30M revenue in 2012.!8. IngeniousMed: $11M revenue in 2012. !9. Ionic Security: $38M in funding. !10.Kabbage: $10M in revenue.!11.MailChimp:!12.News Distribution Network: 573 M monthly views.!13.Paymetric: $14M in revenue in 2012.!14.Pindrop: $12M in funding.!15.PlayOn Sports: $35M in funding.

16.Purchasing Power: $200M revenue in 2012. !17.Salesfusion: $4.8M in revenue and $10 in funding. !18.SalesLoft: >$1M in revenue.!19.ShareCare: $91M in funding. !20.SoloHealth: $25M in funding.!21.Suniva: $224M in funding.!22.The Rainmaker Group: $20M revenue in 2012.!23.Vendormate: $25M revenue in 2013.!24.WhatCounts: $30M in funding.!25.Yik Yak: $10M in funding

25 ATLANTA STARTUPS TO WATCH - RIGHT NOW

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“Embrace what you don’t know, especially in the beginning, because what you don’t know can become your greatest asset. It ensures that you will absolutely be doing things different from everybody else.” – Sara Blakely, SPANX founder

ATLANTA STARTUPS - BY SECTOR

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16SALES & MARKETING AUTOMATION - IN ATLANTA

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17FINANCIAL TECH STARTUPS - IN ATLANTA

FYI: 70% of all US credit card transactions

are processed in Georgia !

including [Elavon, First Data, Global Payments, TSYS, WorldPay]

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18HEALTH TECH STARTUPS - IN ATLANTA

15,000 employees

$11 Billion annual budget

Based in Atlanta

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19ENTERPRISE STARTUPS - IN ATLANTA

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20CONSUMER STARTUPS - IN ATLANTA

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21OTHER STARTUPS - IN ATLANTA

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“Chase the vision, not the money; the money will end up following you.” –Tony Hsieh, Zappos CEO

INVESTORS - ACCELERATORS, SEED, AND VC

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•ATDC •Atlanta Ventures Accelerator •Flashpoint •ForgeATL •Global Center for Medical

Innovation •Startup Chicks •Tech Square Labs

INCUBATORS AND ACCELERATORS

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!Buckhead Investment Partners !

!Cox Venture Fund!

!Forte Ventures!

!Fulcrum Ventures!

!Imlay Investments!

!Mosley Ventures!

!Noro-Moseley !

!TechOperators!

!TTV Capital

VENTURE FUNDS

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! Atlanta Ventures, David Cummings and Johnson Cook!

! BLH Ventures, Ashish Mistry!

! BIP Early Stage Fund, Jamie Hamilton!

! Tech Square Labs, Paul Judge and Allen Nance!

! Tech Square Ventures, Blake Patton

SEED FUNDS

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!Angel.co/TechSquare!

!Syndicate is focused on promising Atlanta startups!

!Expected deal quantity: 7-10 per year

ANGELLIST SYNDICATE - FOCUSED ON ATLANTA STARTUPS

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“Risk more than others think is safe. Dream more than others think is practical.” —Howard Schultz, Starbucks CEO

PLACES - COWORKING AND HANGOUTS

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•ATDC

•AT&T Foundry

•Atlanta Tech Village

•Collider

•The Goat Farm Arts Center

•Hypepotamus

•Kollective South

•151 Locust

•OHub at 200 Peachtree

•NEX Atlanta

•ROAM

•Strongbox West

•Switchyards

•Tech Square Labs

WORK - COWORKING, ETC.

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•Octane •Cypress •Starbucks on 5th & Spring •Spence •Ormsby’s •The Vortex •The Ivy •Terminal West

HANGOUTS - COFFEE SHOPS & BARS

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•Tech Square (Midtown) •Buckhead •Alpharetta •Ponce City Market

CLUSTERS - HOT AREAS OF STARTUP ACTIVITY

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Georgia Tech’s Technology Square is a mixed-use development in midtown Atlanta that houses over 700,000 square feet of business, educational, research and retail space. It is the epicenter of technology innovation and entrepreneurship in Atlanta and the Southeast. Georgia Tech’s business school is one block to the east and Georgia Tech’s computer science school is one block to the west. The land that is Technology Square was originally purchased by Georgia Tech in 1997 and the development opened in 2003.

TECH SQUARE - MIDTOWN, ATLANTA, USA

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“The more that you read, the more things you will know. The more that you learn, the more places you'll go.” " Dr. Seuss, I Can Read With My Eyes Shut!

SCHOOLS - COLLEGES AND UNIVERSITIES

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Atlanta ranks 7th in college enrollment with 275,000 students

Atlanta ranks 5th in university research with $1.49 billion in expenditures

Atlanta has 60,000 students enrolled in 7 technical colleges

STATS ABOUT SCHOOLS - TALENT AND RESEARCH

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•Georgia Tech

•Emory

•Georgia State

•SCAD

•Morehouse

•Spelman

•Clark Atlanta University

•Ogelthorpe University

•Kennesaw State

•Mercer

•Agnes Scott

•University of Georgia (1 hr away)

SCHOOLS - HIGHER EDUCATION IN ATLANTA

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!

•In 2014, Georgia Tech was ranked #7 among public universities in the country by U.S. News & World Report.

•The Georgia Tech College of Engineering is consistently ranked in the nation's top five by the magazine.

•Tech’s industrial engineering program has been ranked #1 for more than two decades.

•Eight of the undergraduate engineering programs – and all 11 graduate engineering programs – are in the top 10.

•Georgia Tech's graduate computer science program is also ranked in the top 10.

•400-acre campus in the heart of Atlanta

•100 interdisciplinary research units

•14,500 undergraduate students and 6,900 graduate students

source: gatech.edu

President Bud Peterson

GEORGIA TECH - WE CAN DO THAT

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!

•ATDC

•Enterprise Innovation Institute

•Georgia Tech Research Institute

•Georgia Research Alliance

•InVenture Prize

•Invention Studio

•Capstone Design

•Venture Lab

•StartupExchange

•Startup Lab

•Startup Summer

GEORGIA TECH & ENTREPRENEURSHIP - COMMITTED

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!In Atlanta Since 2014

!In Atlanta Since 2014

!Merged with Highgroove in

2012

PROGRAMMING EDUCATION - IN ATLANTA

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“…entrepreneurs also play a critical role in expanding our economy and creating jobs." —President Barack Obama

GOVERNMENT - SUPPORTIVE OF STARTUPS & TECH

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39CITY OF ATLANTA - STARTUP AND TECH SUPPORT

•Mayor Kasim Reed •City Council President Ceasar Mitchell •Councilman Kwanza Hall •Invest Atlanta •Startup Atlanta •Atlanta City Hackathon

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40STATE OF GEORGIA - STARTUP AND TECH SUPPORT

• HB 958: Video Game $25M Tax Break • April 2014, extending 2008 law

• HB 318: Georgia Angel Tax Investor Credit • March 2013, extending 2010 law

• Invest Georgia Exemption: Intrastate Equity-based Crowdfunding for non-accredited investors.

• December 2011: Rule 590-4-2-.08

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“Entrepreneurial communities have to be led by entrepreneurs" —Brad Feld

CONTENT & EVENTS - MEDIA AND GATHERINGS

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42MEETUPS - WEEKLY EXCUSES TO SPEAK GEEK

•Atlanta Web Design Group (2800+)

•Atlanta Startup Village (2700+)

•PyAtl: Atlanta Python (1300+)

•The Atlanta Javascript (1700+)

•Atlanta Big Data User Group (800+)

•Atlanta Ruby Meetup (1600+)

•Atlanta Scrum Users Group (1400+)

•Atlanta Hadoop Users Group (700+)

•Atlanta Game Developer Meetup Group (800+)

•Atlanta Spring Users Group (400+)

•Atlanta Microsoft Developers (500+)

•DevOps ATL (600+)

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43ASSOCIATIONS - SUPPORTING THE MEMBERS

•Technology Association of Georgia •TiE Atlanta •Metro Atlanta Chamber •Atlanta CEO Council •ChooseATL.com •Technology Executive Roundtable

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!Atlanta Business Chronicle!

!Atlanta Journal Constitution!

!Atlanta Tech Edge!

!PandoDaily!

!TechCrunch!

!GigaOM!

!CNN!

!Booth 61 with Ricky Steele

TECH MEDIA AND NEWS - LOCAL AND NATIONAL

add AP, AJC

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!

•facebook.com/groups/techsquare

•www.bizjournals.com/atlanta/blog/atlantech

•hypepotamus.com

•AcademicVC.org

•AllenNance.com

•atlantatechblogs.com

•DavidCummings.org

•JonBirdsong.com

•blog.weatherby.net

•notonlyluck.com

•blog.salesloft.com

•ventureatlanta.org

STARTUP BLOGS IN ATLANTA - RECOMMENDED LIST

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46HACKATHONS - FUN & PRODUCTIVE

•HackGT @ Georgia Tech •Startup Weekend Atlanta •Coca-Cola Startup Weekend •AT&T Foundry Hackathon •Govathon by Startup Atlanta •Emory Hackathon •Healthcare Hackathon

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47CONFERENCES - AND OTHER EVENTS

•Digital Summit •Venture Atlanta •TAG Business Launch Competition •Southeast Venture Conference •MIT Enterprise Forum - Atlanta •Startup Lounge •Hacker Halted •Startup Chowdown •Startup Drinks •Startup Riot •Founder Fables

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“If you’re not a risk taker, you should get the hell out of business.” —Ray Kroc, McDonald’s founder !

PROFESSIONAL SERVICES - PROVIDERS

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LEGAL

•HA&W

•TechCXO

•Cheery Bekaert

•Acuity CFO

ACCOUNTANTS REAL ESTATE BANKS

• Silicon Valley Bank • Square 1 • CBRE

• Cushman Wakefield • Icon

•DLA Piper •Morris Manning &

Martin •Nelson Mullins •Sutherland

OTHER

• Arketi • Friendly Human • Peachtree Supplies • TriNet • ZAG PR

PROFESSIONAL SERVICES - PROVIDERS

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“Your most unhappy customers are your greatest source of learning.” —Bill Gates, Microsoft co-founder

ENTERPRISE COMPANIES - FORTUNE 1000

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source: Metro Atlanta Chamber, Fortune Magazine

FORTUNE 1000 IN ATLANTA - STATS

27 FORTUNE 1000 companies headquartered in metro Atlanta

!!

15 FORTUNE 500 companies headquartered in metro Atlanta

!!

$359.6 Billion revenue of Metro Atlanta’s headquartered FORTUNE 1000

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source: Metro Atlanta Chamber, Fortune Magazine

FORTUNE 500 IN ATLANTA - REVENUE

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source: Metro Atlanta Chamber, Fortune Magazine

FORTUNE 500 IN ATLANTA - LOGOS

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source: Metro Atlanta Chamber, Fortune Magazine

FORTUNE 1000 IN ATLANTA - LOGOS

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source: philanthropy.com

NON PROFITS IN ATLANTA - Five of the Top 20

Five of the Top 20 Non-profits in the US are based in Atlanta

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And a lot of things in hip hop are very instructive for being in business. Particularly, hip hop is a lot about business, and so it was very useful for me in any job. - Ben Horowitz

CULTURE - KEY TO CONSUMER INNOVATION AND ADOPTION

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• Home to GRAMMY® winners in multiple categories and genres

• 300 music studios

• Over 40 annual music festivals statewide

• Pop, R&B and hip-hop: 2 Chainz, Akon, B.o.B., Cee Lo Green, Ciara, Jermaine Dupri, Future, Keri Hilson, Kris Kross, Lil Jon, Ludacris, Monica, OutKast, Soulja Boy, TLC, T-Pain, Toni Braxton, T.I., Usher and Young Jeezy. Execs: L.A. Reid, Babyface

• Country music: Jason Aldean, Zac Brown Band, Luke Bryan, Billy Currington, Brantley Gilbert, Lady Antebellum and Sugarland.

• Gospel and Contemporary Christian: Francesca Battistelli, Casting Crowns, Jeff & Sheri Easter, Jamie Grace, Canton Jones, LeCrae, Karen Peck & New River, Laura Story, Third Day and Chris Tomlin.

source: georgia.org

ATLANTA’s MUSIC INDUSTRY - WORLDWIDE INFLUENCE

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58FILM AND TV - DEEP HISTORY AND FAST GROWTH

• In FY 2013, $3.3 billion invested in Georgia by television networks, Hollywood studios, and producers

• 700 feature films, TV movies, TV series, single episodes and pilots produced in Georgia since 1972

source: georgia.org

HEADQUARTERED IN ATLANTA

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NBA NFL

WNBA MLS

coming in 2017

SPORTS - EVERY PROFESSIONAL LEAGUE

MLB

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“Work Hard, Play Hard” — Unknown

LIVING IN ATLANTA - QUALITY OF LIFE

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1. GROWTH IN POPULATION

• 5.5 million people, 9th largest metro area

• Since 2000, grown by 1.1 million people, 26% increase

• Atlanta grows by about 200 people per day !

2. DIVERSITY

• International population; Percentage of companies owned by African Americans and by women exceed national averages

• Central role in civil rights movement and now helps drive global culture

• Recognized as a supporter of the LGBT community !

3. QUALITY OF LIFE

• 36% Tree coverage, highest of any major city

• Moderate cost of living and Wide range of social activities

• Foodie town: More restaurants per capita than any other city

• More about food and neighborhoods, please see: http://mailchimp.com/about/atlanta/

LIFE IN ATLANTA - GROWING, DIVERSE, QUALITY

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62COST OF LIVING - BELOW U.S. AVERAGE

source: Metro Atlanta Chamber

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• Most traveled airport in the world

• 95 million passengers a year

• Nonstop flights to 160 domestic destinations and almost 70 international destinations in 45 countries

• 80% of US market within 2 hrs

• 2 hrs to New York or Miami

• 4.5 hrs to San Francisco or San Jose

• 8.5 hrs to London

EASE OF TRAVEL - HARTSFIELD INT’L AIRPORT

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"See we do it for that boy that graduated/ That looked you in your eyes real tough and said ‘preciate it“ —Andre 3000 of Outkast

SUMMARY - AND NEXT STEPS

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65WAYS TO PARTICIPATE - GET INVOLVED

WE BELIEVE IN THE FUTURE OF THE STARTUP SCENE IN ATLANTA. WE WILL HELP YOU GET INVOLVED IN IT. SOME OPTIONS: !

1. FOLLOW ANGELLIST SYNDICATE: • ANGEL.CO/TECHSQUARE

2. JOIN A STARTUP • WANT TO WORK AT AN ATLANTA STARTUP? WE’LL HELP PLAY MATCHMAKER.

ATLANTASTARTUPJOBS@TECHSQUARE.CO

3. GET FUNDING • HAVE A STARTUP (IN ATLANTA OR THAT WANTS TO MOVE TO ATLANTA)? SUBMIT TO OUR SEED

INVESTMENT TEAM: INVESTING@TECHSQUARE.CO

4. COME VISIT • WE ARE HAPPY TO HOST TOURS OF THE FULL ATLANTA STARTUP SCENE AND ORGANIZE ON-

DEMAND DEMO DAYS BASED ON YOUR INTERESTS: TOUR@TECHSQUARE.CO

5. JOIN MAILING LIST FOR UPDATES • BIT.LY/ATLANTASTARTUPS

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TechSquare Labs was founded by Paul Judge and Allen Nance to continue their passion for early stage technology company building and investing. They are both graduates of Georgia Tech, accomplished entrepreneurs, and technology community influencers. Over the last ten years they have helped start seven companies, created 1000 jobs, and raised over $100 million from notable investors. !Now they are aiming to help create more unicorns in Atlanta. So far their active portfolio includes 4 startups located in Technology Square that employ over 70 team members, 40 of which attended Georgia Tech including 7 Ph.Ds. These companies have raised $20 million of funding and are trying to change the world.

Company Building Studio

ABOUT TECH SQUARE LABS - BUILDING THE FUTURE

About Allen: Allen is a serial entrepreneur and popular blogger. He has been recognized by both Georgia Trend and the Atlanta Business Chronicle as a “40 Under 40” to watch. As CEO he led WhatCounts to three Inc. 500 awards representing the fastest growing private companies in America. He is also a member of Young Presidents Organization (YPO).

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67THANKS - COME PARTICIPATE

It is better than ever.!Come participate.!Create, Build, Invest, Grow.!!

!

!

The Atlanta Startup Scene

Thanks, Paul Judge

TechSquare.co @TechSquare @TechSquare /TechSquare TechSquare.co @TechSquare@TechSquare /TechSquare