By Allan Maurer

Ribbon cutting at opening of the MAC. That's Mike Price on the far right, Director Dori Linsey on his left.

ATLANTA – Most tech startups fail for one reason: they don’t sell enough. CEO Ventures, an organization of successful CEOs and entrepreneurs that owns and manages a portfolio of tech companies, wants to pioneer a new model for seed stage venture investing with its Market Acceleration Center (MAC).

Michael Price, general partner and original founder of CEO Ventures tells us, “The MAC came out of the harsh reality that seed stage companies struggle with most: getting traction. Building a product has become easier and easier the last few years, but getting traction in a tough environment like we’ve seen the last 24 months is tough. That’s where we have seen the most casualties.”

CEO Ventures, which started out in 1999 as VC South, is a small fund that invests from $100,000 to $300,000 in its portfolio companies.

A startup pitstop

Growing tired of seeing tech startups fail essentially for the same reasons, Price says, “We decided to roll up our sleeves and recognize that while venture capitalists do a great job on screening companies and finding the best technologies where we think there the market is going to be big, ultimately startups tend to die because they can’t get market traction.”

So, Price says, “We thought if that’s how we and most others lose most of our companies, why not put the best minds together to find the best sales practices, customer relationship management systems, and everything else we can think of.” Thus the MAC was born.

The idea, says Price, “Is to act like a NASCAR pitstop. Put the right tires on the car, tune it up, add high octane fuel and give that company a good shove down the race track.”

Clamoring for market traction

To do that, says Price, “We went to some of the best Southeastern companies and talked to CEOs, heads of marketing and sales and we’re sharing their best practices at the center.

Price admits the MAC is an experiment. “We don’t know of any other venture firms doing this, but we have high hopes for it. It’s what our portfolio firms are clamoring for most, ways to get sales and market traction.”

A startup CEO may have all the key characteristics a venture investor looks for yet still may not be “God’s gift to sales,” says Price. “You hope and pray they are,” but that just is not always the case.

“Everyone in our business has historically noticed that even with a B or C-quality product, a highly sales oriented team can usually make the company work. Likewise, even with an A-quality product, a technical team without good sales processes rarely gets to cash flow positive,” Price says.

Will share best practices

So, CEO Ventures is funding the MAC with the intention of teaching its portfolio companies the best ways to sell, sell, sell.

“If you have 10 or 20 firms and get just one or two to perform better, it could have a dramatic impact on your rate of return,” Price says.

It is intended to complement existing seed stage venture models which typically add capital and a slice of an angel or partner’s time, incubators, which include space for equity, and newer models such a YCombinator, which include mentoring. The  MAC will be a more comprehensive model addressing “all common points of failure.”

He says the MAC and CEO Ventures will share its best practices and techniques via white papers and case studies and will publish those on a routine basis.

CEO Ventures already has three firms in the MAC, which launched last week. “The doors are open and part of the initial MAC team has been hired.” In their first two weeks “Dialing and and closing deals” they landed three sales already.

The idea is not to keep portfolio companies in the MAC forever, though. “Once the sales process is cracked, they’ll migrate. We don’t want them to view the venture firm as responsible for generating their revenue.”

Top execs consulted

That could be a problem when a potential buyer did due diligence. “We want them to move through the process,” says Price.

Dori Lindsey is director of the MAC, which will be centrally located at Atlantic Station in Midtown Atlanta.

Executives CEO Ventures consulted to set up the MAC include a who’s who of Atlanta’s tech scene:

Key executives consulted on what  worked in their experiences and on future trends included:

Ron Verni who is the retired CEO of Sage which owns products like ACT!, Peachtree Accounting, etc (and member of CEO Ventures’ Advisory Board), Tom Lynch of Infor (now $2 Billion in revenue), David Cummings of Hannon-Hill and Pardot, Allen Nance of Mansell Group, Glenn McGonnigle of TechOperators, Jim Noble of Noble Systems (member of the Advisory Board), Don Addington of ORTEC, Joe Tibbetts of Sapient who headed a related initiative at Charles River Ventures, Greg Smith of Xerox (member of the Advisory Board), Brooks Robinson who is a Co-Founder of CBeyond, and Tim Mattox who heads Dell’s Worldwide Product Planning (also a member of CEO Ventures’ Advisory Board).