While I was away, John Rife posted an excellent assessment/announcement over at his blog FindingJohn. I've been friends with John for about a year now. He has a lot of passion for both Orlando and for technology, and a ton of experience when it comes to investing. We've had a number of conversations over the last couple of months sizing up the local tech scene and trying to determine our collective needs. It's great to see him moving in this direction, as I think it will help our community a great deal.

Why More Local Venture Funds are a Good Thing

As most of you probably know, Gavin and I have so far chosen to self fund Emurse.com and our other web products (hoping for a new yet-to-be-announced-product to launch soon, possibly barcamp?) The #1 reason for doing so is, well, because we can, but a close second is the lack of available options locally. We do not intend to leave Central Florida. In fact, I moved back to Central Florida from DC largely because of our growing company. The idea of packing our bags and heading west feels like we'd be selling out. We don't particularly have a problem with the west coast, but we don't particularly love it either. Orlando, we love.

Many of the issues entrepreneurs have with outside investment (besides the obvious equity exchange) revolve around losing control, losing corporate identity and risking their culture. When there are a plethora of options available, these risks are minimized by the presence of choice. If you don't like the investors, don't work with them -- there are others to choose from.

To give you an idea of what goes into choosing an investor.. I can't speak for everyone, but in our case, it's not so much the money that would be important as much as the connections the money might carry. Being on the east coast, someone with west coast ties would be appealing. We're in the HR space, so someone with strong local ties would be nice (easier to pilot beta products with someone right down the street). Then there are other questions, like what are the other companies in the investment groups portfolio? Are there in house partnership opportunities? How does the web industry view the investment group? Are they well received, controversial, or flat out hated? This might all come across as being picky, but investment is more than just money, it's an added business partner.

No one investment group will appeal to everyone, and thats where the necessity for multiple firms comes into play. Off the top of my head, Dan Rua and Inflexion comes to mind. There is also the option of the UCF incubator, but from what I've been able to gather, it wouldn't necessarily address our particular needs. The EDC can also help match up investors with investments, but I'm not sure their capacity. All in all, the Central Florida region desperately needs choice. We're far from establishing our own version of Sandhill Road.

Why Orlando?

I get asked pretty often why we chose to base ourselves out of Orlando. In most folks eyes, it's the tourism capitol of the world and not much more. What is sadly overlooked is the rapidly growing $10 billion a year technology industry that resides here in Metro Orlando. The fact that the metro area has 7 airports gives us easy access to other markets when we need to be there. Florida has an extremely friendly business tax system (Tax Foundation named us 5th in the nation), and no state income tax. UCF, UF and USF are all within a hundred mile radius of Orlando. UF is the 3rd largest school in the country, UCF is the 6th largest in the country, and USF is the ninth. All in all there are more than 25 colleges and universities in metro Orlando, and more than 50 technical schools. There's plenty of talent here, and it's cheap talent, because our cost of living is so low. In the last couple of years, more than a few leading business magazines have echoed the same sentiments -- Orlando is a great place to be an entrepreneur and a great place to live.

We have a great community locally that's finally starting to come together. Ryan's done amazing things with Florida Creatives, and Gregg appears to be organizing the barcamp to end all barcamps. Josh's blogOrlando format has not only taken root here, but all over the eastern seaboard. There's a ton of money here in Central Florida, and more choice in the venture arena can help get financing into the hands of people who need it. The success of our area's new companies will help create even more mentors and knowledge locally, and that will help create even more success.

Orlando's monstrous growth rate, local wealth, ample qualified talent, great weather, low taxes and creative spirit make it an amazing place to live and work. All that's left for this town is for the startup scene to start connecting the dots.

Jason Calacanis asked an interesting question today in regards to the economy.. Interesting times, indeed.

I spent a little time trying to catch up on the economic going-on's in the world on my flights this past week, and things are looking volatile if nothing else. Credit fears and overall consumer confidence levels are a drag, inflation concerns and the price of oil are putting downward pressure on the markets, and real estate is in the dumps.

I've posted before about the movement of money from one investment opportunity to another, and I still think thats the case. It's just.. When the market goes south, along with a hard asset like real estate, that largely leaves things like gold, CD's, t-bills and private equity investments, right? If interest rates are forced up from inflation, that doesn't make CD's all that appealing, but the Fed is looking like they might have to cut rates to spark spending -- I'm just not sure what a rate cut would do to consumer confidence. Wouldn't it be seen as more than an admittance of trouble ahead? I bet the media would at least spin it that way.

The other option is to move money overseas, which could lead to an even more unbalanced trade deficit/weakening dollar. Not necessarily a problem if we didn't have such profound budgetary concerns. Can't cover the overruns unless you can grow the economy faster than the debt. That won't happen if the money is invested elsewhere (the often overlooked exception to trickle down).

On the other hand, a month ago the Dow set a record high, factors like the unemployment index are fairly strong. June 2007's CPI was up 2.7% from June 2006, which seems to be about right (expectation should be 2-3% a year, correct?). The productivity index is up strong for the second quarter (over 2% 2nd quarter, compared to 0.2% for the 1st quarter of 2007). Many aspects of the economy seem to be not just healthy, but growing stronger. (follow along at home over at bls.gov)

I'm inclined to suggest that our overall confidence in handling the potential threats is what's dragging us down, and if there is a signal of good news somewhere, it'll cause a rebound. The threats aren't small ones, to be sure, but we're also surrounded by lots and lots of negativity driving down confidence. I'm not an economist, and I'm still trying to learn as much as I can about the subject, but it would appear that our economy is much stronger than folks want to give it credit for (hah, get it? credit?...ahem). It goes without saying that housing continues to be the biggest risk -- if we can avoid sellers panic, we may just pull through. Thin ice, though.

Thoughts?