During an Austin Tech Week panel discussion held at Capital Factory on Wednesday morning, emerging venture capital fund managers discuss why they’re betting on Austin and share candid advice for founders seeking early-stage investments. did.
The “New VCs on the Block” panel, moderated by Perkins Coie partner Dan Austin, included partners from several emerging investment firms, including Firebrand Ventures, FirstMile Ventures, Rock Yard Ventures, and Runtime Ventures.
Investors highlighted Austin’s collaborative spirit as a key attraction. “There’s a buzz of energy and something is happening here,” said Daniel Dart of Rock Yard Ventures.
Zaz Floreani of FirstMile Ventures extends this sentiment across Texas, noting that the welcoming atmosphere extends to the Dallas and Houston startup scenes as well. According to Crunchbase, FirstMile Ventures primarily focuses on seed and pre-seed investments in Colorado’s software, IT, and SaaS industries. The company has invested in 58 startups and raised $30.6 million.
Austin’s growing cybersecurity ecosystem makes it an attractive market for Runtime Ventures, which specializes in cybersecurity investments. “More and more companies and cyber professionals are coming to town,” said David Endler, who has lived in Austin for more than 20 years. “The community here is supportive, but that’s not the case in every city.”
When discussing how founders should approach VCs, the panel emphasized credibility over perfection. Floreani offered a “scorching view” that the added value of VCs is often overstated. “Companies are founded and sold by founders and their teams,” she said, adding that VC’s main value is in helping companies prepare for future funding rounds and providing guidance during difficult times. He suggested that this was the case.
Getting funding is difficult, Dart said. Funders generally control power dynamics. Rock Yard Ventures does about 5,000 deals a year, 10 of which are highly competitive, Dart said.
“The reality is, if people give you shitty money, you take it,” Dart said.
According to Fundera, less than 0.05% of startups receive venture funding.
Investors also answered frequently asked questions about the timing and preconditions for the financing. Claire Hansen of Firebrand Ventures says that while the definition of funding stage is changing, being a seed sage typically means having a product that can be sold to some beta or full customers. I explained. At the same time, pre-seed typically involves companies that are still primarily focused on product development.
Founded in 2016, Firebrand Ventures has raised $57.7 million, with its latest $40 million fund announced in 2021. According to FundingTrip.com, the company has investments in Austin, Boulder, Denver, Chicago, Des Moines, Kansas It has invested in 27 companies in Citi.
On artificial intelligence, the panel agreed that not all startups need to be AI companies. But regardless of industry focus, we’re looking for founders who understand how to leverage AI to make their operations more efficient.
The discussion ended with practical advice for founders. It’s about knowing your target investors, doing your homework, and understanding that warm introductions are still important. Mr Dart said: “If we think we can make money off you, that’s what we do. And we’re very accessible. That’s what we do, too.”
