Alabama Capital Network (ACN), at just over a year old, is introducing innovation to investment. With the help of the Birmingham Business Alliance (BBA) and other resource partners, ACN is constantly looking for innovative companies that its network can potentially invest in. After the multimillion-dollar fundraising successes of Planet Fundraiser and Circulogene in ACN’s first year, ACN CEO Miller Girvin chatted with the BBA about what the Network is looking for and why Birmingham is so attractive to investors.
BBA: Tell me about the work Alabama Capital Network does.
Girvin: Alabama Capital Network was founded by five Birmingham businessmen. They saw an uptick in activity around Birmingham and across Alabama and wanted to get involved. We are a network of businesses and individuals that want to support the Alabama innovation ecosystem. That support can take the form of investment dollars, mentorship opportunities and local companies being customers of innovative technology or startups in general.
BBA: When and where did ACN launch?
Girvin: On March 1, 2017, in Birmingham. Over the last year our network has grown to 40 businesses or individuals that have joined us. Looking at other cities worked – Nashville is the primary example of a model we took our structure from and then tailored for what works for the state of Alabama. Five Birmingham businessmen – Charlie Perry, Bill Terry, Bill Goodrich, Ruffner Page and Sanjay Singh – had taken the initiative to develop the concept and were looking for someone to lead it and get it off the ground, and they approached me.
BBA: What types of companies do your members invest in? What are some examples of some companies they have invested in?
Girvin: The ultimate goal is to support and help keep companies growing in Alabama. It doesn’t do the business community any good for us to try to get investment outside of the region and ultimately ask them to move to another city. Local buy-in and local investors help keep them here.
In terms of industries, our membership is varied – we have 40 members and everyone has a niche interest and expertise. That said, we don’t pigeonhole them into a particular industry focus. We look for companies who have traction in the marketplace, five to 10 employees, and have a really strong business case for the company and are looking for funding to take them to the next level.
Planet Fundraiser [which raises funds for schools and nonprofits by shopping at local businesses] and Circulogene [which has developed a liquid biopsy process to monitor tumors] are two that we have taken to our entire membership and have had success in our membership being interested in investing. Several others raised smaller amounts and were strategically connected to one or two of our members. We have a few others in our pipeline.
After Steve Case and Rise of the Rest on May 9, the finalists will also pitch to the Alabama Capital Network on May 10. We want to utilize Rise of the Rest for more than just one day and allow the finalists to get in front of local investors looking to support local Alabama companies. We support any company across the state and meet with companies all over the state interested and in need of funding, mentors or customers.
BBA: If I am launching a startup and applying for funding with ACN, what are the best tips for me to be successful? What is the process like?
Girvin: From a members’ potential investment perspective, we are looking for companies that have already raised a little bit of capital and are looking for the next round to take them to the next level. This isn’t a hard and fast number, but if I were to put ranges around things we would want to see between $700,000 to $1 million in revenue, five to 10 employees, a strong business plan and something that takes a hard look at a problem people are willing to pay to solve. I get referrals to companies all of the time, and some just cold call and reach out. I definitely want to sit down in person or have a really substantive phone call with someone to understand why they started the business, the traction they’ve gotten in terms of who customers are and who has invested previously, and what the entire business looks like.
BBA: Realizing you probably can’t name specific investors, can you tell us what types of investors are in the pool? Are they high net worth individuals, professional investors, civic leaders or all of the above?
Girvin: All of the above! I am really pleased at the quality of members that we have, both from a corporate and an individual perspective. A lot of corporations are absolute institutions in the community and pillars of Alabama that want to see growth in the innovation sector. The individuals are also leaders in the community who want to invest their own resources, time and money into local startups. They want to see them grow and will do everything they can to facilitate that growth. Our investors represent industries across the board – doctors, lawyers, construction, bankers, entrepreneurs themselves, family offices; some are professional investors in family offices, but most I would say are successful businesspeople who want to invest locally.
BBA: What types of innovation are you seeing in Birmingham?
Girvin: I am really pleased to see innovation around some of the verticals that Birmingham is known for. There is some cool stuff going on in manufacturing, particularly advanced manufacturing. UAB has seen several world-class, cutting edge technologies be licensed in the last few months to a year, and I am excited to see where those companies go. They have a lot of potential. FinTech companies are doing neat things. Birmingham is known for construction and infrastructure companies; there are developing technologies around that vertical that are going to take it to the next level.
BBA: What makes Birmingham attractive to investors?
Girvin: I recently had coffee with some out of town venture capitalists who have made investments in Birmingham, and we talked about this very subject. One of the big things that they see is the support of the community and support of organizations like Innovation Depot, the University of Alabama at Birmingham, the Economic Development Partnership of Alabama, the Birmingham Business Alliance, TechBirmingham, Innovate Birmingham and all groups that have the singular goal to grow Birmingham. Honestly, it is pretty unique, in a city that has an innovation sector as young as ours. The goodwill and friendly competitive spirit of wanting everyone to succeed, the feeling of “A rising tide is going to float all boats” across Birmingham and all of Alabama.
The cost of living and the cost of doing business is significantly lower here than in other places. An investor can invest a million dollars here and may get 10 developers; in California a million dollars invested may get you three or four developers. The dollar in hiring people and running a business goes a lot further, and that is really attractive to investors.
BBA: Are there trends that you’re seeing among startup companies?
Girvin: Artificial intelligence is hot everywhere and something we are seeing more of. We are seeing some here already. Something that continues to take hold, with Birmingham being the banking town that we are, is FinTech around crypto currency. People understand more about blockchain and opportunities there.