“Innovation is bigger in Texas,” declares Capital Factory. And they are taking fifty of the country’s top tech investors on a tour to showcase just that.
The inaugural J.P. Morgan Texas Startups Roadshow, a statewide journey across the “most vibrant startup ecosystem in the country,” kicked off in Dallas today. Entrepreneurs, innovators, and of course, investors gathered to begin the three-day, four-night, and four-city journey from Dallas to Houston to Austin to San Antonio.
Capital Factory—dubbed the “center of gravity for entrepreneurs in Texas”—said the trip aims to close the gap between funding and opportunity. The largest Texas cities consistently rank as top cities in the U.S. to start a business, hire tech talent, and live, but often only receive as little as 2 percent of VC funding.
About two years ago, Capital Factory launched its Texas Startup Manifesto, which is the vision of treating the entire state of Texas like one big city. The goal with that was to show startup founders that they should be talking to the big investors in all the cities—not just the ones where they the startup was based.
“If you’re a Dallas startup, you don’t have to move to Austin to take advantage of Austin. You can still go there and recruit or raise money, then come back to Dallas,” Joshua Baer, founder and CEO of Capital Factory, told Dallas Innovates. “And vice versa: If you’re an Austin startup, you can come to Dallas to sell to the many companies there, or to recruit people, or things like that. And that’s a big part of the [Texas Startup Manifesto].”
Baer said he and his Austin-based team started that by partnering with The DEC and opening up their Dallas location at The Centrum on Oak Lawn. And, for the past year, on the third Tuesday of each month, Capital Factory has been packing up for a one-day bus-trip to Dallas, Houston, or San Antonio.
“It’s been very successful for us,” Baer says. “And it’s a great day. The energy is great. There’s a lot of real interactions and things that happen. There’s results. We continue to see a bunch of companies that got funded because they came on a bus trip.”
Baer says they realized the method was working, but a common complaint was that more capital and money was needed. So they pondered how to take it to the next level.
“There’s a lot of investors saying, ‘We invest in people.’ But there’s a corollary to that. Investors also invest with people,” Baer says. “Most funded startups don’t just get invested by one investor. Investors like to invest with other investors that they know and trust. One of the hardest things about getting outside money to come to Texas is they don’t know all the people. And that is the main point of this trip.”
Baer says there’s about two dozen investors who aren’t from Texas loaded up onto the bus to spend time with Texas investors, making connections and inspiring future collaborative deals.
“I really believe that will make a big difference,” he says. “And so that’s the goal of this trip—to get investors, through this experience, spending time with other investors.”
So, by way of two buses and a sponsorship from J.P. Morgan, Baer is acting as the tour guide across the state.
The trip offers bus-riders an intro to the local startup community to show how it might play a role in the state as a whole. The focus and schedule at each stop depends on location, with Capital Factory’s ten-year birthday party wrapping the entire event.
Everything from the state’s technology to its entrepreneurial growth will be discussed, mixed in with plenty of sightseeing, local speaker presentations, and good ‘ole Texas barbecue.
The Dallas leg of the trip is focusing on UTD Entrepreneurship programs, fintech, proptech, retailtech, blockchain, family offices, and esports.
The day began at Old Parkland with an early morning breakfast and welcome, then moseyed on over to Capital Factory + The DEC. There, Hedera Hashgraph’s Mance Harmon gave a keynote on Investing in Blockchain and Distributed Ledger.
Startups and investors then headed to what Capital Factory calls Epic Office Hours for investors and founders.
“Since the Texas Startup Roadshow is an investor-focused roadshow, it is mostly for investors outside of Texas that don’t know a whole lot about what we have to offer here, or they do know, and they want to get more connected in with that,” Capital Factory President Gordon Daugherty says. “So sitting across from those investors are the startup founders that are seeking investment.”
Think of it like speed dating: For 90 minutes, the best startups in each city get a chance to rotate between local and national investors in their industries that Capital Factory matched them with. But Daugherty explains it’s often not even about just securing funding. It’s about making the connections and opening the doors to the future.
“To be a successful startup founder, a critical skill—maybe even a success or failure type of skill—is in applying. And it’s just because of the sheer number of meetings you have to have,” he says. “That is a survival skill. This is like tip of iceberg.”
The room was abuzz with new ideas and relationships. Numerous local startups present attributed a number of reasons for wanting to be in the room.
“With events like today, it’s a great blend of opportunities for companies,” MyndVR co-founder Shawn Wiora says. “We are now connected with these fantastic investors who are attracted to Capital Factory for a lot of different reasons: qualified opportunities, fantastic conversations with entrepreneurs, and more.”
David Cherrie, co-founder and CEO of Arcade, echoed the sentiment. “Texas has always been a formidable force in every industry in the country,” he says. “I’m really excited to see the cities unite and actually come together to become a center for startups and awesome technology, and to unlock all the potential that the state has with capital.”
“What we do kind of plays off of what they’re doing here,” Jordan McLain, one of the DumbMoney trio, says. “We’re trying to give a voice to local startups around the state, but mainly Dallas. Because we’ve got VCs and investors from around the country that watch what we’re doing, this is a good way for a local startup to get some traction and notoriety, without having to take a bunch of meetings.”
The buses then ventured up North with a demo at Neighborhood Goods, led by co-founder Matt Alexander, followed by a tour of The Star in Frisco. Now that Complexity Gaming’s opened its new headquarters there, attendees got to see a glimpse at both the Dallas Cowboys’ and the esports team’s home-base.
And, at 7:45 p.m. tonight, the buses are heading down to Houston to do it all over again.
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