I was lucky to live in Austin for ~10 years before I moved to Boston. Over those years, I, and many other entrepreneurs, notably Josh Baer and more recently, Bill Boebel, did everything we could to make the Austin startup community more robust. While it has improved around the edges, with an uptick in the past year with Capital Factory’s new space (visited by the President last week) and Bazaarvoice’s IPO, no single event has served as a catalyst. Fast forward to today, and Techstars’ announcement of their new incubator there will be the event that pushes Austin over the edge.
I’ve been fortunate to be a mentor at Techstars Boston, and have seen the profound impact it can have on an ecosystem, even one as dynamic as Boston’s. For Austin, it will mean 3 things:
While Austin has many positive virtues, inertia keeps most companies from moving (though some do, including those fleeing high taxes in California). Getting into Techstars, however, is a reason in and of itself to uproot and move. Techstars usually has two classes a year, and with ~10 startups per class, that is 20 new startups a year! These startups come from all over, which I will talk about in 3) below, and in my experience I’ve seen many stay in Boston after they graduate from Techstars. This will be a huge boon for the Austin startup community as they all come out with some funding, and many go on to become successful businesses. Startups from the Boston Spring 2011 class, for instance, have raised nearly $58 million collectively and have 124 employees!
Crunching the data linked to above, the startups in each Techstars class, on average, have raised $17 million! Austin Ventures, Mercury Fund (our awesome investors at Infochimps) and Silverton can’t fund that by themselves. Money will flow in to fund these startups from all over. Who knows - will a West or East Coast VC open up a satellite office in Austin? This is how it started in NYC…
I’ve been privileged to mentor a number of Techstars startups, but I’d like to give a nod to three in particular to exemplify the diversity Techstars adds to a community.
Austin has always been a great startup town - and it is great to get the validation from Techstars. This is the tipping point.