Category: Austin (Page 154 of 318)

Austin-based re:3D Makes 3D Printers for People Who Think Big

By SUSAN LAHEY
Reporter with Silicon Hills News

Samantha Snabes, founder and catalyst for re:3D, courtesy photo.

Samantha Snabes, founder and catalyst for re:3D, courtesy photo.

They were a group of space geeks, scientists, engineers and artists who met at NASA but, because of cutbacks in the U.S. space program, considered they might never get a chance to slip the bonds of earth’s orbit. So instead, they started a company to tackle two huge problems in the third world, the ability to make things communities needed, and the ability to recycle waste.

That was the beginning of re:3D, a company that makes the Gigabot, a 3D printer that prints items as large as eight cubic feet—about the size of a toilet or a dorm refrigerator—for under $6,000. The original idea was to make it so easy anybody could use it, and to figure out how use recycled materials as feedstock.

“A group of us were going to be astronauts,” said co-founder Samantha Snabes. “With the space program being limited it was like…now what? A lot of NASA is about education and connecting with the community. So we started talking about how technology can be an accelerant for individuals like ourselves to explore and create.”

Before re:3D, Snabes had gotten degrees in biology, international studies and Hispanic studies at the University of Michigan. She’d also received master’s degrees in supply chain management and international business, and worked as a research affiliate for the Digital Media Collaboratory at the Center for Agile Technology at the University of Texas. She then was a research associate with Aastrom Biosciences (now Vericel), which focuses on patient specific cellular therapies. Her first startup, BioFlow Technology was tissue culture device that allowed stem cells to grow in three dimensions for over a year while maintaining regenerative potential. Then she was recruited to Johnson Space Center/Space Life Sciences where she met her co-founders: Engineer Matt Fiedler, Design Engineer Katy Jeremko, Technologist Chris Gerty, and later Lara Jeremko who manages private equity at UT and is an angel investor.

“Chris saw that there was this gap where design, technology and social impact weren’t linking up and we started to talk about it….”

They settled on building an inexpensive 3D printer that could build human-sized objects. And while they were at it, they thought, what if they could convert old plastic bottles and other trash into feedstock?

Almost as soon as they cooked up the idea, they applied for StartUp Chile and were picked as one of 105 companies out of 1,400 applications. In Santiago they learned a lot about how 3D printing could address the needs of emerging countries. They also won a $40,000 seed round.

In 2013, they launched a Kickstarter campaign hoping to raise $40,000. Twenty four hours later, they’d raised $250,000. Investments since then have included a $100,000 investment from Indie.VC, and a $50,000 Kickstarter campaign in March of 2015 for their newly designed Gigabot.

What they ultimately came up with was an open-source 3D printer designed to be modular–easy to ship, assemble and use–with an open source community that would make constant improvements on hardware, software and the electrical components.

GB-WheeledXL_grandeCulture, Jeremko said, is shifting to an ethos that eschews collecting “stuff” just for the sake of having it. With 3D printing, she suggested, someone could have a nomadic lifestyle, creating furniture, utensils, shoes and other things they need, then melt them down and restart in another place, rather than throw them away or have to haul them along. At the same time, if someone wanted to build something to last a lifetime, with a unique and personal design, they can do that too.

“You could put the story of the object at the bottom…embed a signature into the file, and you’ve got something very lightweight and structurally sturdy and strong.”

In another scenario, Snabes said, a community of refugees or people displaced by natural disaster could use the printers to begin creating objects they need and starting a shared economy, especially once the recycling aspect gets stronger. They recently gave a Gigabot to Tochukwu, the man behind 3D Nigeria, which is looking to implement 3D printing centers to “unleash the creative potential, reduce poverty, and encourage bottom-up growth through localized entrepreneurship.”

Recycling waste has turned out to be a bigger challenge than re:3D originally imagined, though the company has recently had some success and other startups have begun shredding ABS and PLA plastic and extruding filaments for feedstock. They also learned early on that the only want to effectively produce really large 3D printed items was with a heated bed in the printer so the bottom wouldn’t harden too quickly and damage the item being made.

“We’re constantly improving it and we know customers don’t want to drop 5K and not get the features and improvements on the next version,” Snabes said. “We want to make this a community. We also want you to make the bot your own, and make it customizable.” Jeremko said they work closely with members of their Kickstarter community on modifications in software, hardware or the electrical package.

imgres-4One Gigabot was used to make dinosaurs for the Queensland Zoo and others have been snapped up by artists, designers and people looking to create businesses from them. They’ve sold 300 thus far.

Artist Micah Ganske said he read about re:3D’s Kickstarter campaign and instantly backed it. “I thought, I don’t know how I’m going to afford this but I’m going to figure it out because I need this in my life.” Ganske was their first North American client and, he said, he “Instantly destroyed,” his Gigabot.

“Printing at that scale is so different from building on a 10-inch platform. You have to make sure the bed is level, the height is adjusted. There’s only so much wiggle room.” So he adjusted the machine, using the calculations he would apply to calibrating a 10-inch machine, then went to dinner for three hours. In printing, he said, there are ridges that push up. And when the bed is that big, by the time the next layer goes down, the first layer can be rock hard. After creating a few of these layers, the ridges rose up and ripped the heads right off.

“That was the saddest call I ever had to make,” Ganske said. “Of course I bought new heads, but anything that’s happened since then–like occasionally a cable will go bad—they will send you a change.” Building at the scale he does saves him a huge amount of time on sanding and assembling his pieces.

Shawn Fitzpatrick is another customer who has worked in design of industrial plants such as smelters, mines and mills. “With industrial plants…nobody has ever actually had 3D modeling. They all just used drawings…. If you had that it would like when you look at a plant virtually you can see and adjust interferences far better than in 2D. With 3D printing you could actually have a physical scale model of the plant you could take to clients or board meetings that didn’t cost thousands of man hours to build.”

But that’s just one idea. He’s actually not sure what he’s going to do with his Gigabot. Reinvent himself somehow. But the British Columbian remembers when the first fax machine was installed in the small town he lived in and everybody in town wanted to use it. He figures that’s where 3D printing is headed, fast.

The Gigabot, Snabes said, was created to “Democratize access and inspire local solutions.” So far, so good.

Makerarm has Raised $429K Exceeding its Kickstarter Goal

imgres-2With just a few hours left in its Kickstarter campaign, Makerarm has raised $429,716 exceeding its initial goal of $349,750.

Austin-based Makerarm has created a complete digital fabrication system that is a sleek and slender robotic arm that can serve as a 3D printer, laser cutter, ink printer, fabrication and assembly machine. The product is aimed at makers and it looks like it has met a need in a marketplace.

The company offered its Makerarm early on for just $999 but those went super quick. It is currently selling the makerarm for $1,399, which is still 50 percent off its retail price.

Female co-founder Zaib Husain serves as the company’s CEO and Azam Shahani is also a co-founder and serves as its Chief Technology Officer.

Correction: an earlier version of this story incorrectly reported the total number of dollars MakerArm has raised through its Kickstarter campaign.

Austin-based Consero Global Buys Starting11 of Boston

By LAURA LOREK
Reporter with Silicon Hills News

Bill Klein, Consero’s President and Co-Founder at the company's Austin headquarters, courtesy photo.

Bill Klein, Consero’s President and Co-Founder at the company’s Austin headquarters, courtesy photo.

Consero Global started out in 2006 with the goal of taking the pain out of finance and administrative duties for small to medium sized businesses.

The Austin-based company has since grown tremendously earning it a spot on Inc. 500’s list of fastest growing companies in the U.S.

And now it’s growing even more.

Consero, a finance and administrative software and services provider with 20 employees, Tuesday announced it has acquired Starting11, a Boston-based outsourced accounting company with 10 employees. Financial terms of the deal were not disclosed.

“Acquiring Starting11 enables Consero to expand our service delivery through the Northeastern United States, but also complements our own vision, said Bill Klein, Consero’s president and co-founder.

A year ago, Consero opened a Boston office. Starting11, founded by Jason Pulsifer, and the rest of the staff will join Consero’s operations. Pulsifer will become the company’s director of Northeast Business Development.

Logo_High Performance FinanceConsero, which received $5 million investment from Kayne Partners earlier this year, planned to use the funds to expand into new geographies, Klein said. The company currently works with more than 100 high growth startups that outsource their finance operations and processes to Consero. Its software provides those companies with easily scalable operations, Klein said. It also reduces the amount of time companies need to spend on financial and administrative data, he said.

Consero’s software provides each company with a customized dashboard, reports and forecasts that provide a snapshot of the short-term and long-term health of the business, Klein said.

“The small company finance economy has just been broken for a long time,” Klein said. “They need strategic guidance to help them in their planning.”

That’s the role Consero Global plays. It eliminates the inefficiencies or bottlenecks for companies to scale their business, Klein said. One person at a company acting as the chief financial officer isn’t able to do it all, he said.

Consero Global’s platform saves companies 20 percent to 40 percent on their financial and administrative costs, but more importantly, it saves a high-growth company a lot of time, Klein said.

“It’s the fact we can get them up and running on our platform in a few weeks,” he said. “And they feel more empowered. That’s pretty powerful. We provide them with information they need to make informed decisions about managing and growing their business.”

Consero Global's corporate office in Austin, courtesy photo.

Consero Global’s corporate office in Austin, courtesy photo.

Favor on a Fast Growth Track, Hits 1 Million Deliveries

3-GrowthIn 2013, Favor launched in Austin to deliver food to homes and offices.

Zac Maurais and Ben Doherty initially founded the company while students at California Polytechnic State University and they ran a pilot program in San Luis Obispo.

Now the company has announced it has reached another milestone. It has surpassed one million deliveries nationwide. The delivery service has also expanded its business. It no longer just delivers food. It connects people with personal assistants, called runners, who will fetch anything from batteries to burritos. Customers place their requests through Favor’s mobile phone apps, available for both iOS and Android platforms. It reports an average delivery time of 35 minutes.

Favor currently makes deliveries in 15 markets in the U.S. and Canada.

“Thanks to our incredible runners, customers, and merchants we were able to accomplish this tremendous milestone in a little over two years. We’re looking forward to hitting one million more, and are working hard to accelerate the expansion of the service into new cities, both here in the U.S. as well as internationally,” Jag Bath, Chief Executive Officer and President of Favor, said in a news release.

Media Startups Apply to Pitch the Newspaper Association of America

logo-mainThe Newspaper Association of America is looking for startups with innovative ideas in the print, digital, mobile or advertising areas.

The NAA is soliciting submissions for its third annual Accelerator Pitch program. The event will take place at NAA mediaXchange 2016 in Washington, D.C. April 17-20.

The program is open to media startups founded in the last three years. The NAA will select up to eight startups and give them a chance to pitch their products and services to approximately 1,000 newspaper media industry executives and their colleagues.

“We are excited to be bringing back the Accelerator Pitch program at NAA mediaXchange 2016, as it generates a lot of buzz on the part of the startups and the newspaper executives alike,” David Chavern, NAA president and CEO, said in a news release. “Accelerator Pitch is an excellent way to highlight innovations taking place in the industry that will propel newspaper media companies into the future.”

“As a former newspaper editor, it was great to be among the delegates at last year’s NAA mediaXchange. It was even more of a buzz to take part in the Accelerator Pitch – and a thrill to win!” Paul Field, CEO Europe for TouchCast, a 2015 Accelerator Pitch winner, said in a news release. “As a video start-up working extensively with media partners like the BBC, Wall Street Journal, Globo and Financial Times, it was fantastic to be able to network with newspaper executives at the event.”

NAA is accepting entries for the program through 5:00 pm EST on Friday, December 11. Entries will be judged on usefulness to newspaper media companies, innovation and creativity. The winners will be notified by Feb. 5, 2016.

Broomly Raises $1.3 Million and Launches “Uber for Home Services”

logoBroomly, which bills itself as “Uber for Home Services,” announced it has received $1.3 million in seed stage funding.

The Austin-based startup provides on demand services including pest control, plumbing, HVAC, laundry and handyman services.

With the funding, the company plans to expand into other cities nationwide.

“Broomly is using technology to disrupt a massive ($400B) antiquated market, solving the problem of having to seek different vendors for every service,” Hugh Forrest, Director of SXSW Interactive and investor in the startup, said in a news release.

In addition to Forrest, other investors “include Adam Zeplain, Venture Capitalist and Board Member of Branch Basics; Dan Graham and Blake Borgeson, Co-founders of BuildASign; Marc Winkelman, CEO of Calendar Holdings LLC; Andy Bursten, Founder and President of Coastal Telephone Company and Former Chairmen of CyrusOne; Joe Ross, Co-founder of CSIdentity; Curtis Howard, of Lexus; Alex Andrawes, Founder of PersonalWine.com; Russell Hinds, Managing Director, RSH Ventures; Mark Hawkins, CFO of Salesforce; and Herb Simon, Co-Founder and Chairman Emeritus of the Board of Simon Property Group Inc. and Owner of the Indiana Pacers,” according to a news release.

“Offering high quality work at low prices, Broomly differentiates themselves by combining technology and awesome customer service,” Jerry Sun, co-founder of Broomly, said in a news release.

In addition to Sun, the other co-founders include Matt Hawkins and Joe Shiraz.

Beekeeper Data Raises $550,000 and Launches its Software Platform

Matthew Rathbone, CEO and founder of Beekeeper Data

Matthew Rathbone, CEO and founder of Beekeeper Data

At the Texata Summit 2015 in Austin, Beekeeper Data, a reporting and analytics startup, announced the launch of its software platform.

The company, based in Dallas with five employees, makes software that allows businesses to easily send reports to their customers via email.

Beekeeper also announced it has raised $550,000 in seed stage funding from Wisconsin Investment Partners, Serra Ventures, BrightStar Wisconsin and other investors from the Midwest. The company is also a graduate of the gener8tor Milwaukee business accelerator and started its private beta rollout in October of 2014.

Matthew Rathbone, a software engineer who previously led big data and analytics projects at Drop.io, acquired by Facebook, Shoutlet, acquired by Spredfast, and Foursquare.

BeeKeeper-website-2“After manually building a spreadsheet report for the hundredth time I figured there must be a better way to share data, so I set out to build something new,” Rathbone said “We’ve worked hard to make reporting as easy as sending an email newsletter, and the reception to this approach from our customers has been fantastic.”

Rent the Runway’s Project Entrepreneur Launches Venture Competition

By LAURA LOREK
Reporter with Silicon Hills News

Lori Feinsilver with UBS interviews Jenny Fleiss, co-founder of Rent the Runway at the Project Entrepreneur Summit in Austin on Friday.

Lori Feinsilver with UBS interviews Jenny Fleiss, co-founder of Rent the Runway at the Project Entrepreneur Summit in Austin on Friday.

Six years ago, Jenny Fleiss founded Rent the Runway with Harvard Business School classmate Jenn Hyman.

Today, the New York-based company has more than five million members and 500 employees. And to scale their venture, Fleiss and Hyman have raised $114 million in venture capital from Bain Capital Ventures, Kleiner Perkins Caufield & Byers, Conde Nast and other high profile investors, according to its CrunchBase profile.

“You need to dream and think big to get your company going,” Fleiss told a crowd of mostly women Friday at a Project Entrepreneur Summit in Austin.

In the U.S. the clothing market, which is the largest in the world, has a market value of about $331 billion. The key to building a big business is to get just a tiny slice of a huge market, that’s still a billion dollar business, Fleiss said. Those huge, scalable businesses are what VCs are looking to finance, she said.

Fleiss gave the keynote address at the free event, held in the ballroom at the Omni Hotel in downtown Austin. Rent the Runway and UBS partnered to put on Project Entrepreneur, a venture competition and free educational program designed to give women the mentorship, tools and resources they need to build high-growth, high impact businesses. The summit is the second of three national events taking place. The first was held in New York and another takes place on Nov. 14th in Washington, D.C.

The four-hour summit featured female executives from Dell, Bumble, Doobop and Urban Co-Lab conducting workshops on a variety of topics. The sessions included “the basics of running a tech company,” by Whitney Wolfe, co-founder of Tinder, founder and CEO of Bumble and “How to Build a Brand with Purpose” by Jennifer “JJ” Davis, executive director of global communications for Dell.

“Women start companies at a rate 1.5 times the national average but account for less than 10 percent of founders at high-growth firms; while the passion and talent clearly exists, barriers stand in the way of women maximizing the economic significance of their efforts,” according to Project Entrepreneur. And that’s something the project is seeking to change. For its venture competition, Project Entrepreneur will award three winning teams a cash prize of $10,000 each and a spot in a five-week accelerator program hosted at Rent the Runway in New York. Entrepreneurs can enter the competition now through Jan. 8th. In April, 200 finalists will gather in New York City and the winners will be announced.

At Friday’s event, Lori Feinsilver, head of community affairs for Americas UBS, interviewed Fleiss about Rent the Runway.

Rent the Runway is a company with the mission to “democratize luxury” and deliver women a “Cinderella experience,” said Fleiss.

The company lets women rent high-fashion designer dresses in sizes ranging from 0 to 22, accessories and handbags for a fraction of the price. It’s free to sign up. Then members select a dress they would like to rent. Their credit card is charged when the dress is shipped. Customers can rent the dress for four days or eight days. At the end of the term, they put the dress in a pre-paid mailing envelope and Rent the Runway takes care of dry cleaning.

The big idea Fleiss and Hyman had was to turn retail clothes buying into a rental business to deliver “aspirational experiences” to its customers. Rent the Runway also has brick and mortar stores in New York, Washington, D.C., Chicago and Las Vegas.

Fleiss advised the entrepreneurs in the crowd to find a partner they feel comfortable with when they are seeking venture capital.

Investors are a big part of a startup’s team, life and company, she said. She speaks to her investors on a weekly basis.

She also recalled the challenge of explaining to male VCs in their 50s and 60s why a dress rental service met a need in the marketplace for women.

“It was very challenging explaining why women need possibly hundreds of different dresses to wear,” Fleiss said.

Rent the Runway’s customers get to wear designer clothes and that makes them feel like they can take on the world, Fleiss said.

“That’s what fashion does for women,” she said.

Instead of telling VCs about the need, they decided to demonstrate it firsthand by running some trials with customers. They invited VCs to those trials too to watch the women interact with Rent the Runway’s merchandise firsthand. They also filmed them.

For the first trials in Boston, Fleiss and Hyman bought a bunch of designer dresses in their own sizes.

“In case things didn’t work out we’d have some great dresses,” Fleiss said.

They also borrowed dresses from friends.

In one case, they saw a women put on a Tory Burch gold sequined celebrity dress. The woman twirled around in the mirror and said “wow I look hot.” That was the light bulb moment for Fleiss and Hyman. They knew they were really “renting a Cinderella experience.”

“Customers can tell you a lot,” Fleiss said.

One of her customers wanted Rent the Runway to rent ball gowns. And now ball gowns are 30 percent of its business, Fleiss said.

During the question and answer session from the audience, a woman asked Fleiss how Rent the Runway differentiates itself from Bag, Borrow and Steal, one of its competitors.

“We are a service, rather than a product that is cheaper,” Fleiss said. Bag, Borrow and Steal is a value proposition and it “loses some of its specialness in that way,” she said. Bag, Borrow and Steal also didn’t make relationships with designers. Rent the Runway did, she said.

Dell Medical School Plans a Technology Accelerator

By LAURA LOREK
Reporter with Silicon Hills News

Dr. Clay Johnston, dean of the Dell Medical School delivers the keynote talk at MedTechTX 2015

Dr. Clay Johnston, dean of the Dell Medical School delivers the keynote talk at MedTechTX 2015

The new Dell Medical School at the University of Texas at Austin is going to have a technology medical accelerator to nurture new startups.

Whether the Dell Medical School operates it or partners with an existing accelerator is something they are looking at right now, said Dr. Clay Johnston, dean of the Dell Medical School. It could be they partner with Capital Factory, the Austin Technology Incubator or another organization, he said.

Startups need access to the medical system, Johnston said. The new Dell Medical School intends to provide that to encourage a culture of innovation, he said.

The Dell Medical School closed applications on Oct. 1st for its first class. It received 4,700 applications for 50 spots, Johnston said. They are in the process of selecting the students right now.

The Dell Medical School, which has 125 employees, is also still hiring for specific and targeted positions, Johnston said.

Johnston made the remarks to Silicon Hills News following his noontime keynote speech at MedTech2015, medical device and technology summit at the Norris Conference Center put on by the Small Business Development Center at Texas State University. About 150 people registered for the event, which featured more than 30 speakers discussing topics ranging from funding a medical technology startup to ways to regulatory challenges and manufacturing medical devices. Hugh Forrest, director of South by Southwest Interactive gave the morning keynote address and Nicholas Pachuda, worldwide vice president of Orthopedic Innovation for Johnson & Johnson Medical Devices, gave the closing keynote.

The daylong summit addresses the growing interest in medical technology industry in Central Texas, said Mike Breck, event organizer with the SBDC at Texas State University.

“Our motivation for this was the fact that we have a very unique opportunity in Central Texas right now with a brand new medical school,” Breck said. “We want to make Central Texas and Austin a hub for the life sciences industry. And the medical school is going to be an instigator to make that happen.”

Austin Needs Bigger VC Deals and More of Them

By LAURA LOREK
Reporter with Silicon Hills News

David Altounian presenting data on funding deals in Austin.

David Altounian presenting data on funding deals in Austin.

Is a bootstrap mentality holding Austin’s entrepreneurs back from breaking through to big markets and venture capital opportunities?

That question sparked a lively discussion from seven panelists attending an event put on by the Austin Chamber of Commerce and the Austin Technology Council Thursday night at Carmelo’s Italian Restaurant.

“A lot of the companies that I see while they are serving a purpose in a market, I think sometimes what I don’t see is that they serve a really big market,” said Michael Rosenberg, partner with Redwood Capital, based in New York. He serves on ATC’s Capital Advisory Council and he frequently visits Austin. “And that might be sort of a victim of what’s happened in Austin.”

Those companies find a niche market and grow revenue to $3 million to $5 million and then they sell, he said.

“That’s probably a mentality in Austin, possibly as a result of the financial network that is here” Rosenberg said. “If you’re looking at getting investment outside of Austin, if you want to get investment anywhere, you really need to have a plan that shows there is a tremendous market opportunity….You really need to think about big market opportunities.”

Rosenberg was one seven funders and entrepreneurs on a panel discussing ways to increase venture capital and deals in Austin. About 50 people attended the event sponsored by Consero and Redwood Capital.

In Austin, it’s about bootstrapping, said Alan Knitowski, founder and Chief Executive Officer of Phunware and one of the most vocal panelists.

“It’s about very little money, don’t burn money, it’s about break even, be scrappy, win Austin, win central Texas, win the Midwest, win the United States and then think about the world,” Knitowski said.

“In Silicon Valley, you figure out a market that no one is in, go dominate the hell out of it, kill everybody that’s already in there, and when you win the world by default you get the United States, which gives you the Midwest, which gives you Texas, which gives you Central Texas and oh yeah, you get Austin,” Knitowski said.

Panelists attending a discussion on funding deals in Austin at an event hosted by the Austin Chamber of Commerce and the Austin Technology Council.

Panelists attending a discussion on funding deals in Austin at an event hosted by the Austin Chamber of Commerce and the Austin Technology Council.

Austin needs bigger and more venture-backed deals said David Altounian, assistant professor of entrepreneurship at St. Edwards University, serial entrepreneur and a partner at Capital Factory. He gave an overview of the Austin venture capital research study he recently completed.

For 2014, Silicon Valley had 1,390 deals worth about $24 billion in venture capital investment, compared to $620 million and 114 deals in Austin, Altounian said.

The top three markets are Silicon Valley, Boston and New York and Chicago is also healthy, Altounian said. The healthiest VC markets are generally where other financial markets existed, he said.

The average deal size in Austin is about $5.4 million, compared to $17 million in Silicon Valley, Altounian said. Take out the top five VC deals in Austin last year, and the average deal size is around $2.9 million, Altounian said. Austin has 144 funding sources, he said.

Altounian knows the pain entrepreneurs experience firsthand in fundraising. For his last startup, Motion Computing, he could not get funding in Austin. The company got its initial funding from an investor in China and other rounds came from California, Altounian said.

How does that put Austin at a competitive disadvantage? Altounian, citing data from CB Insights, gave the example of Austin-based Favor, which raised $17 million from seven investors. Its competitors, both based in San Francisco, Instacart raised $275 million from 17 investors and Postmates raised $138 million from 20 investors. It’s hard to grow a scalable company attacking a huge market without access to large amounts of venture capital, Altounian said.

“We don’t have a shortage of good companies worth funding, we do have a network problem we believe,” Altounian said. “We need more funding sources and more ties to later stage funders.”

Austin needs to network with funding biospheres in other cities to develop better networks and access to capital, Altounian said.

“We don’t want to recreate what they have in these other cities but we want to tie into them,” Altounian said.

The premise in Austin is if an entrepreneur builds a good company, venture capitalists will come here and invest, but Altounian said he didn’t see that in his preliminary research.

To further illustrate that point, the panel’s moderator Robert Alvarez, Chief Financial Officer and Chief Operating Officer of BigCommerce, said his company has raised more than $100 million in growth capital from firms outside of Austin.

And Panelist Steve Elliot, founder and CEO of AgileCraft.com, an enterprise software company, raised $10.5 million with $10 million in private equity coming from Houston.

Another panelist, Subbu Rama, CEO of Bitfusion raised close to $2 million and the majority of the funds were not from Austin.

Knitowski of Phunware raised $20 million in angel investment and $30 million in later stage funding. He just signed the term sheet for another $30 million to $40 million raise, he said

Out of the $62 million Phunware has raised so far, probably 10 percent came from Austin and 20 percent from Texas, Knitowski said.

“We’ve raised more money in Asia than we have here locally,” he said. “Phunware was listed as the fourth fastest growing company in North America and we had no opportunity to raise any money here.”

On the funding side, Rosa McCormick, president of Wild Basin Investments and a member of the board of directors of the Central Texas Angel Network, has seen some of the challenges companies have faced trying to find later stage funding in Austin. She also said that angel investors get tired and they need exits to continue financing more startups.

The Burn Rate

How entrepreneurs and investors think about building companies in Austin is different than the east or west coast, Knitowski said.

The burn rate, the amount of money a company spends before profitability, at some Silicon Valley tech companies is $5 million, $10 million even $20 million per month, he said.

“We burn about $1,250,000 per month, we’re looked at as the anti-Christ,” Knitowski said. “Now investment bankers in New York think we’re a responsible tech company, you only burn $1 million per month. It’s a very interesting dynamic. You don’t get to grow for free. And bootstrapping and growth are way at odds.”

Most wealthy Texas investors aren’t on board with investing in Silicon Valley Go-Go high growth companies, McCormick said. “That’s because they’ve gotten burnt before.”

Different funders have different expectations, according to the panelists. It’s important to understand the type of investor an entrepreneur is talking to and what their needs are.

Austin does have an entrepreneurial mindset but it needs entrepreneurs with really big ideas, according to the panelists. It might also have a marketing and branding problem and needs to do more to attract investors from the outside.

Austin doesn’t want to be like Silicon Valley

During the question and answer session, Bucky Couch, a successful entrepreneur in Austin and a member of the Austin Technology Council’s board of directors, said he called “bullshit” on the whole talk of Austin being like other major tech markets.

“I don’t care to be like the coast,” Couch said. “Texas was built on wildcatters and people have invested in stuff. We can do our own but there is some underlying reason why we have not.”

“At the end of the day, I don’t give a riff if we don’t have a big structure of investment capital in Central Texas,” Couch said. “I don’t want us going down the path to be like Silicon Valley or New York City.”

A few people in the room applauded his comments.

Austin doesn’t want to be Silicon Valley, it just needs to get its average deal size up to $8 million to $12 million and increase the number of deals, Altounian said. That way it can compete with other emerging tech markets like Chicago and Los Angeles, he said.

Correction: an earlier version of this story incorrectly attributed Rosenberg’s quote to a different panelist.

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