My roundabout journey to Austin
Seven years ago, I accepted a job offer in Austin, TX. I was pumped for the move and started doing all sorts of research on the neighborhoods, restaurants, and weekend activities in town. Two weeks before my scheduled start date (and a week after I put down a deposit for a downtown lease), HR called to let me know that the company over-hired for their Austin office and that I could re-interview in Mountain View, CA. And yes, I would be on the hook for breaking the lease!
But as is usually the case, things worked out. I spent the next seven years in the tech ecosystems of San Francisco, New York City, and even back in hometown Detroit, taking on various operating and investing roles. After seven long years, my journey has come full circle to where it should have been from the start. I’m excited to begin Part 2 in Austin with the amazing team at Silverton Partners.
On leaving NYC
The worst part about moving is leaving behind friends, colleagues, and connections. I’ve met a lot of great people in the NYC entrepreneurial ecosystem, and I hope I’ve been able to give back a fraction of what I’ve taken in. I am going to try to stay in touch with as many of you as I can.
Special shout out to Gil Beyda who taught me 90% of what I know about venture capital.
On the Austin market
Austin has a very interesting startup ecosystem.
According to the NVCA, Texas has consistently ranked 4th in VC investment by state behind California, New York, and Massachusetts. 1Q 2017 data that just came in reflects these numbers, as well.
Worth noting here that the number of deals in the Texas market was slightly less than half of that in New York. Considering that you can count the number of active, early-stage institutional funds in our market on both hands, that’s an amazing ratio! The Texas market is clearly under-served by local investors and there is a lot of opportunity to fund great early-stage companies.
(It’s no exaggeration when I say that it was very hard to keep up with all of the new funds popping up in NYC while I worked there. It’s a very competitive market for VCs. This was also a common point of frustration for entrepreneurs: many felt they were wasting their time talking to the numerous funds that circle around and wait to follow vs. lead. I imagine SF must be worse.)
Despite being the 4th largest city in Texas by population, Austin accounted for nearly 25% of venture dollars in the state. Average deal sizes were also larger than our neighboring metros.
Strangely enough, new VC dollars invested declined each year in Austin from 2014–2016 while the numbers nationally have steadily increased since the last downturn.
Others will have a more informed opinion on why the VC dollars have declined in Austin but my sense is that we’ll see a reverse of this soon with the new fund closings that have been announced recently. Doesn’t seem to be driven by any weakness in talent or exits with 50% more exit dollars in 2016 than the previous year. Outlook is very good.
Anyhow, I’m excited to be here in Austin, and I’m looking forward to meeting everyone in the ecosystem. If you’re in Austin and would like to get in touch, feel free to hit me up on Twitter!
