What 30 Years in Tech Taught One Investor About Starting, Scaling, and Staying in the Game
From Sun Microsystems to angel investing in the Southeast, Jay Schaefer has seen the startup world from just about every angle.
He stopped by the Spectruss Speakeasy to talk about it all. His time at Sun during the early internet boom. Co-founding a startup that built something people loved but couldn’t scale fast enough. And what he’s learned now on the investor and advisor side as Market Director for VentureSouth Chattanooga and Board Member of Atlanta Technology Angels.
It’s a good one. Here’s what stood out.
Your pitch is the movie trailer, not the movie
Jay has sat across from a lot of founders. One pattern he keeps seeing: people over-explain.
A founder gets in the room, starts their pitch, and five minutes later they’re still going. His take is simple. Your elevator pitch isn’t supposed to tell the whole story. It’s supposed to make someone curious enough to want to hear the whole story.
He likes to quote a Georgia Tech professor on this: come up with a dozen words that would make someone want to get on a plane to come visit you. That’s the goal. Not comprehensive. Just interesting enough to open the door.
The same logic applies to outreach. If you want to meet with someone, don’t say “let’s get coffee sometime in the next two weeks.” Say “are you free next Friday at 2 or 3?” It’s a small thing, but it moves the conversation forward instead of leaving it hanging.
The funding ladder most founders climb in the wrong order
When founders need money, most of them go straight to angels or VCs. Jay thinks that’s backwards.
His order of priority:
- Customers. Someone paying you for your product is the best possible validation. Revenue is proof.
- Partners, suppliers, and vendors. Anyone who benefits when you succeed is worth talking to. Co-marketing deals and strategic arrangements can generate real money without giving up equity.
- Banks. If you have assets, a bank will lend against them. They want their money back with interest. They don’t want a piece of your company.
- Angel investors and VCs. Risk capital. Last on the list, not first.
He also breaks down the difference between angels and VCs clearly. Angel investors use their own money. VCs manage other people’s money, charge management fees, and typically take around 20% on a successful exit. Atlanta Technology Angels is all-volunteer with no carry. VentureSouth takes around 10%, which is well below the standard.
Stage matters too. Atlanta Tech Angels will look at companies with an MVP and a pilot. VentureSouth wants to see several hundred thousand in revenue and repeatable processes. Jay puts it this way: if ATA is first base, VentureSouth is rounding first on the way to second, with a Series A somewhere ahead.
What is your equivalent of Amazon starting with books?
Jeff Bezos wanted to build the everything store from day one. But he started with books. Not because books were the vision, but because they’re easy to ship, don’t break, don’t spoil, and rarely come back as returns. Books were the lowest-friction way to prove the model worked.
Jay now asks every founder he meets a version of that question: what is your equivalent of books? What’s the simplest, most manageable entry point that lets you get traction and start proving things out?
He learned this one the hard way. His own startup, VoiceQuilt, built a product people genuinely loved. It was a customizable digital music box where friends and family could call in, record a message, and you’d compile it into a gift for a birthday or graduation. Great product. Real problem.
But they were selling direct to consumers in the gift space, which is expensive and requires changing how people behave. Scaling was brutal.
The “books” equivalent showed up years in, almost by accident. Division I women’s soccer coaches were buying VoiceQuilt music boxes for graduating seniors. One coach ordered 30 or 40 of them over the years. That was the channel. That was the niche with real traction. They just found it too late.
Disrupting yourself before someone else does it for you
Jay spent 14 years at Sun Microsystems, almost a decade of that in professional services. When he joined in 1991 the company was around a billion dollars in revenue. By the peak of the dot-com era it was at $20 billion.
The lesson that stuck with him wasn’t about the growth. It was about what Sun did when competitors started threatening their core business. The company was 75% desktop machines when Silicon Graphics and others started gaining ground in servers. Sun didn’t wait around. They pivoted aggressively and flipped to 75% servers.
Scott McNealy’s line says it best: if we don’t make our own product obsolete, somebody else will.
It’s easy to say. It’s genuinely hard to execute when things are going well. But it’s the move that separates companies that survive technology shifts from the ones that get replaced by them.
Networking is a contact sport
Jay didn’t wait until he moved to Chattanooga to start meeting people here. He was reaching out before his house was even ready. By the time he arrived he already had conversations going with founders and operators across the city.
The lesson goes back to his time helping launch Health Connect South, a nonprofit designed to connect Atlanta healthcare organizations that were all operating in silos. The insight from that experience: build the relationship before you need it. An emergency is no time to be exchanging business cards for the first time.
That same thinking is behind the Chattanooga Founders Forum, which he runs with Carter Fowler of Totem Labs. Founders show up, say what they’re working on, and say what they need. Simple premise. The connections that come out of it are real.
Chattanooga is further along than most people realize
Jay talks about the local startup scene with specifics, not talking points.
Brickyard has invested in 55+ companies and brings founders here for product-market fit work, with some of them staying. Collab has moved toward cohort programs built around anchor partners like EPB, TVA, and Volkswagen. VentureSouth just raised over $400,000 for Taran, the Chattanooga company behind the Chattanooga FC jerseys, through a crowdfunding structure open to non-accredited investors.
The practical case for being here is real too. You can get across the city in 15 minutes. Nashville, Knoxville, and Birmingham are all about two hours away. The cost of doing business is lower. And people are genuinely accessible in a way that’s harder to find in larger markets.
Communication is leadership
One idea from the conversation that applies well beyond startups: communication is leadership.
Jay heard it on a podcast about the founder of The Container Store. The point is basic but easy to forget. If something is happening, tell the people who need to know. Tell them sooner rather than later. Don’t make them wonder.
He uses a small example to illustrate it. If you’re running late to a meeting, send a quick message. Once you do that, you’re not late anymore. It’s a minor thing that turns into a reputation over time.
In startups, in investor relationships, in managing a team, the people who go quiet when things get hard tend to lose trust fast. The ones who communicate proactively, even when the news isn’t great, tend to build it.
