Texas Startup Manifesto 2.0. Texas is the most promising technology…

It seems like every day there is a new headline about an exceptional startup founder, investor, or corporate headquarters moving to Texas.

Elon Musk.

Joe Lonsdale

. Drew Houston.

Jim Breyer

. McKesson. Tesla. Charles Schwab. Hewlett Packard. Oracle. Who’s next?

These names aren’t the end of the story — they are just the beginning. I expect to see more announcements of big name people and companies moving to Texas every month in 2021.

Tens of thousands visit Austin every year for the Austin City Limits Music Festival.

What’s bringing them here? Are they drawn to Texas or moving away from California? Are they running from high prices, high taxes, dysfunctional government, and wildfires? Or are they running to a fresh perspective, a massive talent pool, and an innovation culture that balances social impact with global domination?

Did COVID-19 fundamentally change things, or was it just the final straw? Was this going to happen anyway?

It’s all of the above, of course.

People are moving to Texas because this is where they want to build their lives and raise their families. People are moving to Texas because they see a better future here than what they are leaving behind. People are moving to Texas to study at world-class educational institutions. People are moving to Texas because they just got a job, because they believe they can get a job, or to create their own job and jobs for others.

It all starts with people — talent. For decades, Austin, Dallas, Houston and San Antonio have been on all of the “Top 10 Places for…” lists. When people think, “Where should I move?” Texas is increasingly top of mind. When remote work lets everyone choose where to live, more are choosing Texas than anywhere else. As a result of being the fastest growing region for the past decade, it seems like everyone knows someone who moved to Texas recently. Count all of the people you know!

All of the investors, all of the big companies, all of the government groups — they are all chasing talent.

Something is different now. It’s like a dam has broken and now there is a flood of new entrepreneurs, investors, and big companies moving to Texas.

Texas is a leader in oil & gas but also in renewable energy.

Texas is a powerhouse

• Texas has five of the 13 largest cities in the country by population. Houston is fourth, San Antonio seventh, Dallas ninth, Austin eleventh, and Fort Worth thirteenth. The larger Dallas metro-region is the fourth largest in the country and Houston metro-region is the fifth.
• Texas is the second largest state by population. If you want to launch a new business, this is a great market to launch from because you can easily reach all of the major Texas cities with one office.
• In the first six months of COVID there were some big migrations across the US and some cities were big winners and others lost out. Six of the ten cities who gained the most during COVID were in Texas.
• As a standalone economy, Texas would have the ninth largest country in the world with a GDP of almost 1.9 trillion in 2020. Texas exported more than California and New York combined in 2019.
• More than 50 Fortune 500 companies are headquartered in Texas and six of the Fortune 50. Twenty four are in Dallas and 22 are in Houston. Only California and New York have a few more, and maybe not for long. These are all potential customers and strategic partners for startups.
• Texas has world-class educational institutions across the state. The University of Texas System is massive including
  UT Austin
  , UT Dallas, UT Arlington, and UT San Antonio.
• The Texas A&M System is almost as big, plus there are so many other institutions such as Baylor University, Huston-Tillotson University, Rice University, Southern Methodist University, St. Edward’s University, Texas State University, Texas Tech University, Trinity University, The University of Houston System, and The University of North Texas System.
• Our community colleges are excellent as well, including the Alamo Colleges, Austin Community College, the Dallas College and the Lone Star Community College.
• The University of Houston has the number one undergraduate entrepreneurship program in the country and Rice University has the number one graduate entrepreneurship program in the country. UT Austin, UT Dallas, and Baylor University are top ranked as well.
• Rice University received the largest single gift in its history, $100 million from the Welch Foundation, to created the Welch Institute to advance innovation in the field of advanced materials science. Materials science is a relatively underfunded field from both a research perspective as well as startup formation: and yet the applications are enormous, and many of the companies and industries most ripe for innovation in this field are in Houston and Texas.
• The University of Texas System is the third most innovative university in the world, behind only the University of California system and Massachusetts Institute of Technology in intellectual property patents.
• UT Austin is home to the Austin Technology Incubator (ATI), the longest-standing technology incubator in the country, which has had an economic impact of over $3 billion in Texas with a focus on deep tech such as healthcare, sustainability, and clean energy.
• Texas is a leader in health innovation. Houston is our medical hub with the Texas Medical Center (the largest medical center in the world by far) and MD Anderson Cancer Center but there is also UT Southwestern in Dallas, the Dell Medical School in Austin and numerous other Health Science Centers around the state. The newest development phase dubbed “TMC3” will lead the world in life sciences research commercialization. The Innovation Center at Houston’s TMC (TMCx), co-located with Johnson and Johnson’s J-Labs, and the Center for Medical Device Innovation, drive medical innovation.
• In North Texas, UT Southwestern Medical School has produced six Nobel Prize winners and two $1 billion exits in the last two years (Peloton Therapeutics and Taysha Gene Therapies).
• Launching in 3Q 2021, Pegasus Park will bring together scientific and social innovation on one 23-acre campus, including the first location for BioLabs+, a biotech co-working space, in the center of the country.

“I’ve long believed science is the answer,” said Dallas philanthropist Lyda Hill, “But funding for innovation in science has some unique challenges. That’s why we’re launching the Biotech+ Hub at Pegasus Park to work with UT Southwestern and others in North Texas to move science out of the lab and into the clinic where it can benefit patients. It won’t be an island, however, it will be connected to the other health centers in Texas and other innovation centers in technology, defense, robotics and other disciplines across the state.”

• While Houston is the world energy leader in oil and gas, it is now also a leader in clean energy and clean energy innovation. In fact, the Houston city government ranks number onein the country in renewable energy use.
• Texas is a leader in defense innovation. Texas already had the largest National Guard, the largest combined military base, and the Air Force Cyber Command. Then the Army Futures Command decided to set up shop in Austin because of its proximity to both traditional defense industry and innovative startups.
• Texas now has the Army, the Air Force, the National Guard, the National Geospatial Intelligence Agency, and the Department of Defense all running innovation units and increasing their footprint in Texas and that has attracted a host of defense industry growth from Amazon, BAE Systems, Boeing, Deloitte, IBM, Microsoft, Northrop Grumman, SAIC, STS International, and many others. Lockheed Martin is building the F-35 aircraft in Fort Worth.
• In 2019 and 2020, we saw hundreds of millions of dollars in non-dilutive funding go to Texas startups, most of which had never worked with the government before. Texas military bases pump more than $75 billion into the Texas GDP annually and support more than 226,000 direct jobs.

“The Army selected Austin for a reason. This is where you find innovation and IT expertise,” said General John “Mike” Murray, Commanding General of the Army Futures Command.

• Texas supports our Veterans and it shows in the rankings. Austin is fifth best city in the US for Veterans to live according to Business Insider. Military.com ranked three Texas cities in the Top 10 places to live for younger Veterans. Texas ranks number two for having the most Veterans nationwide. Bunker Labs is active across the state introducing Veterans to entrepreneurship.
• Over the course of more than 20 years, Port San Antonio has emerged as one of the most successful military base redevelopment efforts in the country. Home to over 80 private- and public-sector tenant customers who directly employ about 12,000 people on the campus, activity from Port SA contributes over $5 billion annually to the regional economy.
• Texas is a leader in “new space” — the commercialization of outer space. NASA and the Johnson Space Center (JSC) are drivers in the establishment of a commercial space ecosystem, working with companies in Houston like Intuitive Machines who will be conducting their own lunar exploration missions, developing strong relationships with innovation and startup organizations in the region, and emphasizing transfer of NASA technology to the private sector.
• Among other initiatives, JSC is working with The Ion to establish the Aerospace Accelerator for minority and disadvantaged businesses, as well as with Mass Challenge with their Commercial Space Startup Track.
• Other companies, like Blue Origin, Firefly Space and Space X are all conducting operations in Texas, both together with NASA and for their own unique space ventures. The Spaceport in Houston is the home of Axiom, builder of the world’s first commercial space station.
• Axiom just raised $100M is funding and then announced that four people had paid $55 million each to be a part of the first fully private astronaut crew to the ISS, launching in a SpaceX Crew Dragon in 2022.
• Each major city has created physical technology hubs with strong public/private partnerships. San Antonio has Geekdom with USAA and Port San Antonio with the Air Force Cyber Command; Houston has The Ion with Rice University, Microsoft and NASA and The Cannon distributed across the city; Dallas has Pegasus Park with UT Southwestern and Lyda Hill Philanthropies; and Austin has Capital Factory with the Army Futures Command.
• Texas has strong business support organizations in each city such as the Austin Chamber, Austin Technology Council, the Dallas Regional Chamber, Houston Exponential, and the Greater Houston Partnership that all engage actively with investors, founders and accelerators.
• Texas has strong tech civic engagement organizations too such as the Austin Tech Alliance, North Texas Innovation Alliance (NTXIA), and Techbloc in San Antonio.
• When it comes to founders, Texas has jewelry mogul, Kendra Scott; Mavericks owner,
  Mark Cuban
  of Shark Tank; Whitney Wolfe Herd of Bumble; video game developer, John Carmack; Vista Equity Partners Founder, Robert Smith; Michael Dell of Dell Technologies; and now Elon Musk of SpaceX and Tesla!
• Texas gets an international spotlight as a technology and innovation hub every year when South by Southwest (SXSW) brings >100,000 forward thinking innovators to Austin. It helped launch Twitter, Instagram, and Airbnb and brings in keynotes like philanthropist Melinda Gates, London Mayor Sadiq Kahn, and former First Lady Michelle Obama.

Texas dominates every top ten list.

The Texas startup cities

lays out his case for rising cities in his book “The Third Wave”. In short, the first wave of internet companies were widely distributed and brought people online (AOL in Virginia, Microsoft in Albuquerque and Seattle, Dell in Austin, etc.) The second wave of companies were mainly concentrated in Silicon Valley, and coincided with the rise of platforms (Google, Facebook, etc.) Now in the Third Wave, the internet will transform industries, and that innovation will once again happen in a distributed manner in cities which have led those key industries for many years. Dallas, Houston, Austin, and San Antonio are textbook examples of Third Wave cities. They will be on the cutting edge of transforming healthcare, new space, defense, energy, and more. Clearly, Texas checks all the boxes.

• San Antonio (Central) is the seventh largest city in the country and is known as “Military City” because it is home to the largest group of military bases, the largest active and veteran military population in the country, and the largest concentration of cybersecurity talent outside of Washington D.C. It is also home to the Air Force Cyber Command, housed inside the growing Port San Antonio industrial technology park, and big companies like Rackspace, Valero Energy and USAA. San Antonio is home to H-E-B, our regional grocery store which is also one of the most innovative and community focused organizations in the state and mobilizes to respond to hurricanes and pandemics and to keep Texans fed. San Antonio also boasts a strong constellation of primary and secondary innovation and research institutions such as the S.W. Research Institute, Texas Biomedical Research Institute, and several public universities and Department of Defense research and development programs.

“From software and hardware design to advanced manufacturing, Texas is fertile ground for innovation, investment, business starts and smart job growth. While each employment center features its own unique lifestyle experience, all offer a large, skilled and tech-ready workforce ready to power your business,” said San Antonio Mayor Ron Nirenberg. “In San Antonio we take great pride in our diverse, artistic, affordable and culturally rich community filled with a young and burgeoning creative class workforce. While we are known for strengths in cybersecurity, cloud computing, military research, and advanced manufacturing, we work hard every day to keep San Antonio a vibrant and supportive city for all types of technology ventures large and small.”

• Houston (East and Gulf Coast) is the fourth largest, and the seventh most diverse city in the US. It’s the energy capital of the world and is home to the Texas Medical Center (TMC), the world’s largest concentration of healthcare delivery and research institutions; to the NASA Johnson Space Center, a hub for cutting-edge human space flight research and astronaut training; to the number one seaport in the nation for waterborne tonnage, for foreign waterborne tonnage, and for vessel transits. Houston is an international city — a seaport, a spaceport, a “health-port”, and an “energy-port.” As a result, Houston has a diverse, high-tech industry ecosystem, and is increasingly an industry destination, serving as the home to 22 Fortune 500 company headquarters (with Hewlett-Packard Enterprise becoming the latest addition).

“Texas is America’s premier business destination and well-positioned as a tech innovation leader. It possesses a strong corporate base, talented workforce, and a vast network of nationally ranked universities, startup development organizations and innovation-minded companies to support a robust tech ecosystem,” said Houston Mayor Sylvester Turner. “With science and engineering breakthroughs ingrained in the fabric of Houston’s economy, the region has become a thriving hub of digital technology talent. Today, startup founders focus on the fundamental challenges of our time with energy, life sciences and industrial technologies dominating Houston’s tech scene. In Houston, we are not just running, we are sprinting — in the last four years we’ve seen a 250% increase in venture capital funding and have doubled the number of startup development organizations in our community.”

• Frisco-Irving-Plano-Richardson (North) Once considered the suburbs of Dallas, Frisco, Irving, Plano, and Richardson are now nationally known cities and destinations for investors and corporations. Plano is home to a new Texas unicorn, Alkami Technologies, a Digital Banking Platform, and a number of corporate headquarters including Capital One Financial Services, Dr. Pepper Snapple, Frito-Lay PepsiCo, Pizza Hut, and Toyota North America. Richardson, well-known as the Telecom Corridor now has the IQ Innovation district and is home to Texas Instruments, RealPage, Blue Cross Blue Shield, State Farm, Raytheon, and UT Dallas. Irving is home to many companies like Exxon Mobil (#3 no Fortune 500), 7–11 (including 7-Ventures), NEC Corporation of America, and the Microsoft campus (one of the largest campuses in the country). With a number of sports franchises headquartered in Frisco including the Dallas Cowboys, Complexity Gaming, Frisco Rough Riders, FC Dallas and most recently the new PGA Headquarters, Frisco is known as “Sports City.”

“Frisco has become a hot spot in North Texas for venture capitalists, angel investors, startups, universities, pitch competitions and seed accelerators,” said Frisco Mayor Jeff Cheney. “In order for Frisco to achieve its full vision to be a destination city for VC’s, we have to be part of a larger, statewide network to support our partners and entrepreneur support organizations to help advance our collective and common goals.”

• Fort Worth (North West), aka Funky Town, is the thirteenth largest city in the US and is recognized for its agriculture, oil and gas, defense, and logistics industries and is home to corporations including Alcon, American Airlines, BNSF, GameStop, Lockheed Martin, and Textron/Bell Helicopter. Charles Schwab and Sabre Technologies are nearby. Fort Worth is also known for the Barnett Shale, Texas Motor Speedway, the Fort Worth Stockyards, and AllianceTexas, a Mobility Innovation Zone (MIZ) in Fort Worth that offers one-of-a-kind infrastructure to technology businesses and startups.

“Entrepreneurship, innovation, and risk-taking are at the heart of the Texas experience, and no place embodies that spirit more than Fort Worth. While our community stands on the forefront of innovation in mobility, electrification, advanced manufacturing, and healthcare, we are made stronger through our engagement with our region and our state,” said Fort Worth Mayor Betsy Price. “Building on five multi-million dollar exits in the last five years in biotech alone, Fort Worth is poised for exponential expansion of its entrepreneurial ecosystem. With improved connectivity among the vast resources of the dynamic communities of Texas, there is no greater place for investors and startups to come together and lead the economy of the future.”

• Dallas (North) is the ninth largest city and was recently named the number one commercial real estate market in the US. It has critical mass in many industries including biotech, consumer, construction & prop tech, and travel, to name a few. Dallas is home to Southwest Airlines plus most of the other large companies that are not energy companies. It is also where there is the largest concentration of family offices that are actively investing in tech.

“Dallas is a modern city that drives the economy of the fourth-largest metropolitan area in the country and boasts a business community that is the envy of the nation. With eleven Fortune 500 companies in the city and twenty-six in the area, as well as amazing amenities and six nationally recognized research institutions in a fast-growing region, Dallas is the place to be to start and grow a business — and a family. If you have the hustle, we have the talent, the infrastructure for startups, and the business climate that will allow you to create your own success story,” said Dallas Mayor Eric Johnson

• Austin (Central) is the eleventh largest and consistently fastest growing city in the country. It is the tech hub of Texas and has the most local venture capital and attracts the most venture capital. It used to be that Dell, National Instruments, and Whole Foods were the only headquarters in Austin, with companies like Apple, Facebook, Google and Microsoft having some of their biggest offices here. But now Austin has homegrown heroes like Indeed, Sailpoint, Silicon Labs and VRBO, plus others who have moved here or are moving here such like Army Futures Command, Oracle, TikTok, Yeti, and Vista Equity Partners.

“A significant strength of Texas lies in its diversified portfolio of unique cities. Each offers a different culture, resources and economic base. For example, those that self-select to live and do business in Austin prioritize entrepreneurial innovation in a community with a high tolerance for risk-taking where art is created everywhere. Each city has its own special character. Somewhere in Texas, there is a reason to come home,” said Austin Mayor Steve Adler.

Revolution’s Rise of the Rest Seed Fund visited Texas in 2018 when their seventh bus tour made a stop in Dallas. They made stops at Paul Quinn College (one of nine historically black colleges and universities (HBCU) in Texas); the Dallas Entrepreneur Center; local startups Booster Fuels and rewardStyle; and capped off the day with a pitch competition and fireside chat featuring Steve Case and Amber Venz Box, co-founder of rewardStyle. Nickson took home the $100,000 investment from Rise of the Rest and has since grown their furniture leasing business significantly.

“Texas has emerged as one of the leading startup states in the country, led by Austin with strong ecosystems in Dallas, Houston, and San Antonio. Revolution brought the Rise of the Rest bus tour to Dallas in 2018, and it’s no surprise that our Rise of the Rest Seed Fund has since made 15 investments in the state, among the highest for any state in the country. Austin-based BigCommerce, which went public last year, was also a recent success story for our growth stage fund, Revolution Growth. The state is home to Dell, a pivotal First Wave internet company, and is poised to be a leader in the Third Wave with strong industries such as aerospace, energy, healthcare, and more,” said Steve Case, CEO of Revolution.

The Texas megalopolis

As the world gets smaller and each of the four Texas cities get larger, the borders blur and they start to look and behave more like one big city. It’s easy to get from Austin to Dallas to Houston to San Antonio on big Texas highways with up to 85 mph speed limits. You can do a day trip between any of the cities and sleep in your own bed at night.

Most of the major cities are close enough that it’s just as fast to drive as it is to take a short plane flight. Southwest offers flights for as low as $86 each way and Megabus for as low as $5 each way!

• Austin to Dallas — 3–4-hour drive or 45-minute flight
• Austin to Houston — 2.5 hour drive or 30-minute flight
• Austin to San Antonio — 1.5-hour drive
• Dallas to Houston — 4-hour drive or 45-minute flight (or soon, 1.5-hour high speed train)
• Houston to San Antonio — 3-hour drive or 45-minute flight

The Texas Central bullet train will take passengers from Dallas to Houston in 90 minutes, compared to a 4-hour drive.

Everything may be bigger in Texas, but innovative transportation options are making it feel smaller than ever and making it more affordable and convenient to get from city to city than ever before.

• Megabus runs eight routes a day each way between Austin and Dallas with Wi-Fi and power outlets for anywhere from $5 to $28 each way.
• VonLane is like riding in first class on an airplane but you take the bus instead.
• Hitch offers affordable ridesharing between cities.
• Surf Air offers daily executive air service between Dallas and Houston (and hopefully Austin again soon!)
• Texas Central is building the first high speed rail in the US between Dallas and Houston. After more than eight years — they’ve now received all the key government permits and are soon to start construction!

Texas is well capitalized

Silicon Valley has traditionally received a disproportionate share of private, early-stage funding compared to other geographies given its density of firms focused on these types of investments and the number of start-ups and private companies in the region.

This dominance has been declining as firms and their funding have moved into or sprung up in other cities around the country. At the same time, early-stage companies are thinking beyond the high prices of Silicon Valley to put down roots and find financing and growth partners.

The venture and private capital ecosystem in Texas has never been as healthy or vibrant as it is today. Texas now has global brand recognition with investors and start-ups alike.

Accelerators

Texas has a robust offering of local accelerator programs to help startups raise funding and connect them to mentors and corporate partners. The list is getting longer every year!

• BuildSecFoundry (San Antonio)
• Capital Factory (Austin, Dallas, Houston and San Antonio)
• DivInc (Austin and Houston)
• Founders Institute (Austin)
• Greentown Labs (Houston)
• Health Wildcatters (Dallas)
• MassChallenge TX (Austin and Houston)
• RealCo (San Antonio)
• Sputnik ATX (Austin)
• Techstars (Austin)
• TMCx (Houston)

Angel Investors

In addition to a large base of experienced angel investors, there are many Texas family offices who traditionally invested in oil and gas and real estate but are now allocating some of the portfolio to technology, consumer packaged goods, and impact investing.

A decade ago there was only one angel network in each city, but now Texas has numerous angel investor networks and the Central Texas Angel Network and Houston Angel Network compete each year to be the most active in the country.

The Austin Ventures stage at the Austin City Limits music festival.

Venture Capital

Texas has seen significant growth over the past five years of venture capital sources in three major areas: Texas-based venture firms, National venture firms with a local partner or office in the Texas area, and venture firms outside of Texas investing with other local investors in Texas startups. Additionally, Texas has seen increased numbers of investors per funding and higher average funding per round over time which has had a very positive impact on the vibrancy of the Texas scene with over $2.3 billion in venture capital invested in the Austin metropolitan alone. According to Pitchbook, Texas had more than 550 deals reported in 2020 and $4.66 billion invested across the state.

Along with well-known established local funds such as LiveOak Venture Partners, S3 Ventures, and Silverton Partners, a number of relatively young local venture firms, including ATX Venture Partners, Gigafund, Ecliptic Capital, Elsewhere Partners, Ironspring Ventures, Moonshots Capital, Next Coast Ventures, and True Wealth Ventures have been making the news with active funding activities.

Aristos Ventures has a list of Texas Venture Capital Firms and other funding resources available as well as a working list updated by David Altounian, Associate Professor of Entrepreneurship at St. Edward’s University. These Texas-based firms are attracting capital to the markets and deploying that capital in a way that is driving growth and vibrancy in our Texas entrepreneurial ecosystem.

Additionally, firms traditionally based outside of Texas, such as Breyer Capital, Sapphire Ventures, Draper Associates, and 8VC have established a presence in Texas.

“In 2000 or 2010, it made sense to build in San Francisco. That’s where all the talent was, but not anymore… Some of my most prolific entrepreneurial friends from California have moved with us here to Texas. Others have left for Miami, Nashville, Las Vegas and other great American cities. Six of our portfolio companies are already based in Austin and employ hundreds of people,” said Joe Lonsdale, 8VC

Finally, over the past 24 months, there has been a strong increase in non-Texas VC firms actively participating in Austin funding deals with major players such as Shasta Ventures (data.world), Chicago Ventures (PreFix, MetaSaas, Infinite.io), Andreesen Capital (RigUp), Noro-Mosely (Aunt Bertha, Trendkite, Outbound Engine) participating in funding rounds for Texas-based companies and the list of non-Texas venture firms investing here is growing rapidly.

The HX Venture Fund is a $50M fund of funds seeded by local corporate LPs to drive investment by VC funds outside the state who are interested in doing deals in Houston. It’s a smart model and I wouldn’t be surprised if we see other Texas cities following their lead.

We’ve also seen an increase in the syndication of investments from firms outside of Austin into specific Texas-based companies such as Studio VC, Goodwater Capital, and Highland Capital Partners — all Bay Area firms — investing in Everlywell, Moderne Ventures (Chicago), and Wavemaker Partners (Singapore) to invest in Icon, and investors from Nebraska, Oklahoma, and Colorado joined a Houston-based venture firm to invest in Televet, an Austin based Veterinary Clinic Management platform.

Across the Texas entrepreneurial ecosystem, the increase in local venture presence and increased funding syndication activity with non-Texas based venture firms is leading to an increasing number of deals across funding stages and larger deal sizes in terms of total investment dollars.

“Texas is hitting critical mass as a global startup hub. Texas seems to be a more business-friendly and better-quality-of-life Silicon Valley. Texas provides the red carpet for businesses to succeed while California puts up walls of red tape! I can’t get an elevator put in in my building in San Mateo, while in Texas, I am getting the freedom to build whatever I need to make my business successful. I asked my Silicon Valley team who would like us to move to Austin, and almost all of them raised their hands. And the entrepreneurs are moving there too. More and more creative business ideas are coming from the region. It seems to be a more dynamic, young, friendly environment to build a company, and innovative work is truly appreciated by the government,” said Tim Draper, Draper Associates

The history of Texas VC

In the 90’s and 00’s, Texas venture capital was dominated by one large firm — Austin Ventures. With billions under management, they were responsible for funding some of the biggest success stories in Texas over the past few decades including Bazaarvoice, CompUSA, HomeAway (VRBO), Khoros, Lifesize, Motive, Naviant, RetailMeNot, Sailpoint, Silicon Labs, SolarWinds, Spiceworks, Spredfast, Tivoli, Vignette and Waveset.

Austin Ventures was a great VC firm but entrepreneurs only had one place to turn for funding and it was hard to attract capital from outside Texas. When Austin Ventures broke up, most of the active investors stayed in Austin and kept investing in Texas — they each raised smaller, independent funds. Combined with new investors that moved here and outside investors being more open-minded about investing here, entrepreneurs now have many choices for traditional venture funding in addition to new sources such as crowdfunding.

“I can tell you, without question, that the best is yet to come for Central Texas. Our current portfolio will generate more value for shareholders in the next two years than in the prior 10 years combined. Given our focus on Texas, I believe this positive trend is indicative of the positive development of the ecosystem and I couldn’t be more excited to be part of it.” — Morgan Flager, Silverton Partners