A very interesting interview with Dr. Jeff Cornwall [Bio | Blog | Linkedin | Twitter] and Venture Capitalist and Co-founder and Managing Director of Accelerator JumpStart Foundry Vic Gatto [Bio | Blog | Linkedin | Twitter].

In this interview Vic talks about investing in startups very early (uncommon), about how he invests and the types of returns he looks for and over what time horizon.

He goes on to talk about the importance and role local tech focused startups are playing in the long term economic development of Nashvile. He emphasizes the importance of businesses starting and staying in Nashville. My favourite quote is: "People come to Nashville and don't want to leave". He's referring to startups that form and choose not to move to Silicon Valley, New York, Boston etc. This culture and climate attract people who want to live, work, stay and grow the Nashville startup and tech scene.

 Enjoy the interview and tell me what you think by leaving a comment below or participating in the members only discussion here.

Interview timeline (my very rough notes):

[00:58] How is Solidus different from other VCs?

 - business model and types of deals funding

 - not typical in that they invest very early on which is not how traditional VCs invest

 - their fund is not a closed fund, instead it's an evergreen fund with investors more patient and not bound to a particular

[03:35] Which deal to pick and and invest and why?

 - more than an art than a science

 - looking for 10 times return on his capital between 2 and 12 year time horizon (avg 7 years).

 - on $1M he is looking for a $10M payout. He's looking for 1 in 4 investments to provide this type of return

 - what he looks for in founders when talking to them at the kitchen table exrperience, talent and passion; ability to recruit a team to follow them, get their first clients

 - will ask about market opportunity; is it too competitive, will you get meaningful market share?

 - invests more in the founders based on experience and ability to execute and succeed

 - It's who he invests in and less than the idea that matters

[05:58] The General leading the charge for local accelerator. His, and other’s work on building a local accelerator

 - 18 people got together and were integral to making local accelerator, Jumpstart Foundry, a success

 - started with one client and focused on getting model right...walked before they ran

 - took time to get proof of concept right but balanced this with the need get started; did not want to get bogged down with too much planning

 - now at 127 participants; goal is 50% from outside of Nashville and 50% from within community. Mixing these groups is good.

[11:00] Entrepreneurial potential was there but Nashville was stuck (complacent?)

 - growing group of people thought the entrepreneurial community had to diversify; the tale of two Nashvilles.

 - Existing markets, healthcare and music, won't innovate that fast because they are mature and establshed. But,  newer markets need to be created with technology being a market that Vic wanted to focus on. He has tied innovation and technology startups with existing markets (music and healthcare) to help them innovate

 - next steps is for some of the local startups to become “big”. He refers to Moontoast and Change Healthcare as local Nashville companies that have potential.

[14:45] The Local Experience!

 - local talent, technology students and technology entrepreneurs WANT to stay in Nashville. Don't want to move to tech hot spots (they’re becoming one!).

So What About Halton?

In Halton we’re proud of the technology companies that already exist and their successes. But, there is a need to focus on helping them grow AND making it possible to start more of them in Halton region.

We need to show that Halton is a fertile area for young people and older folks to hatch a technology idea, develop a product, build a company and contribute to becoming an economic and employment engine.

Game developers that graduate from Sheridan college should be inspired and supported to build their own gaming companies here in Halton. Startups, once hatched, should want to grow into the next HootSuite or RIM and not become the next Google acquisition. Established technology companies should be jazzed with the idea that they will be supported via a pool of local talent, supportive government and a community like Silicon Halton, Silicon Peel and Silicon Simcoe.

All organizations in Halton need to become more aware of what’s available locally in the areas of talent (young and older) when it comes to the rich base of technology professionals, service and solution providers that live and/or work in Halton. These individuals and companies can transform their business by helping them leverage technology to reach new markets, to serve customers in new and innovative ways.

Where does Oakville, Burlington, Milton, Halton Hills and Georgetown stand when it comes to a concerted strategic effort in the development and growth of the ICT sector over the next 10 years? It took 18 people representing various organizations to form Jumpstart Foundry. Who would those organizations and people be for doing something similar in Halton? My hand is raised. Anyone else?

How can we create a technology and startup ecosystem that focuses on growing and keeping technology companies in Canada. If you look at the Infographic below what does the Canadian version of this look like?

  [Click here to enlarge]