Tag: Austin Startup Week

Tips on Raising Funds from Angel Investors at CTAN Workshop

Rick Timmins, chairman of the Central Texas Angel Network, speaking to a packed house at its workshop during Austin Startup Week.

Rick Timmins, chairman of the Central Texas Angel Network, speaking to a packed house at its workshop during Austin Startup Week.

By LAURA LOREK
Reporter with Silicon Hills News

Raising money is really, really hard, said Bob Baughman, co-founder of HUVRData.

“I thought it was hard enough just to develop some great new idea and get the business case, but funding is really hard,” Baughman said.

HUVRData closed in August on $2 million in a Series A funding round from the Central Texas Angel Network, the Houston Angel Network and the Texas HALO Fund. Baughman spoke Tuesday afternoon to a packed house at CTAN’s Entrepreneurs Workshop, a featured event during Austin Startup Week. The event was held at Techstars in downtown Austin.

HUVRData is a data and analytics company that has a fleet of drones with cameras to inspect wind turbines and other commercial properties in the wind, solar and oil and gas industries. It has six employees and is hiring. Its offices are on State Highway 71 on 100 acres.

During his presentation, Baughman joked that he met with investors in coffee shops and the ones who wore flip-flops, T-Shirts and shorts had made a ton of money and were very astute. The interaction level with angels is very different than VCs, Baughman said. The angel investors are actively involved in their investments and they also expect the entrepreneur to know their business and industry and have done a ton of research, he said. The worst thing to do is to try to B.S. the investor during a meeting, he said.

“If you don’t know the answer to something, don’t guess,” Baughman said.

He also advised entrepreneurs to have patience and persistence.

CTAN is one of the most active angel networks in the country, said Rick Timmins, CTAN’s board chairman. CTAN members have invested more than $62 million in 110 companies since 2006. The organization has an angel network with more than 130 members who are accredited investors. CTAN investments are primarily in technology, life sciences and consumer products, food and beverage companies. But the organization will look at deals in any industry.

Last year, CTAN invested $14.6 million in 33 companies with 16 of those new companies and the rest follow on investments in existing portfolio companies, Timmins said. This year, CTAN has invested $10 million so far, he said. The average investment is $450,000, he said. Angel investors do a lot of mentoring and coaching and often take a board seat on the company they invest in, Timmins said.

CTAN has a vetting process to become a portfolio company. The organization recommends entrepreneurs start off attending a meet the angel investors office hours event at Abel’s on the Lake. From there, the entrepreneur can decide whether to apply to CTAN for funding. It costs $250 to apply. CTAN selects approximately ten companies during each funding cycle to pitch to its members. The group then further narrows the companies down to three finalists.

It generally takes ten weeks to raise funds from angel investors, Timmins said. CTAN does extensive due diligence on the company and its founders, he said.

Angel investing is a risky business, Timmins said. But it can be rewarding, he said. Twenty percent of Timmins investments will produce all of the returns on his investment and another 30 percent will give some kind of return and the others will provide no returns, he said. Most of the angel investors invest in companies because they enjoy giving back and helping others, he said.

And most venture capital funds do not invest in seed stage companies, Timmins said. The funding amounts are too small for them, he said. Overall, venture capital funds are shrinking today with less than 500 VC firms nationwide, Timmins said. Meanwhile, the number of angel investors has grown in the last few years, he said.

So what does CTAN like to see in a startup?

Timmins likes to see companies that have revenue and can demonstrate a path to profitability. He also wants the entrepreneurs to show him how they can successfully scale the operations. He looks for great teams, disruptive technology, paying customers and a solid business plan.

John Paulos, a board member with CTAN, also gave a presentation on what he likes to invest in. So far, he has invested in 25 companies and he currently serves on seven boards.

Angel investors like to invest in solid teams, big opportunities that are scalable, products and services that are unique with a plan to sell the product, reasonable valuations and a quality business plan, Paulos said.

“It’s less a plan in the traditional business plan sense, than it is a vision not just of here and there but the milestones and steps in between,” Paulos said.

The entrepreneurs need to be coachable and to listen to advice, Paulos said. The two most important things an entrepreneur has to do are to get funding and hire good people, he said. An entrepreneur needs to communicate and be inspirational, he said.

To be a great entrepreneur, the person has to have a focus and a drive that most people don’t have, Paulos said.

CTAN also doesn’t invest in lifestyle businesses, Paulos said. The startup has to have an exit strategy so investors can get a return on their investment, he said.

Get Set to Rock at the ATC Battle of the Bands at Austin Startup Week

ATC Battle of the Bands photo from 2014, courtesy of Austin Technology Council.

ATC Battle of the Bands photo from 2014, courtesy of Austin Technology Council.

Tech and music go together like smartphones and selfies.

And fresh off the first weekend of the Austin City Limits festival comes one of the biggest tech band battle showdowns of the year.

This year, six bands hailing from the offices of local tech companies will compete at the Austin Technology Council’s Battle of the Bands that will also kick off Austin Startup Week Oct. 5th at Mohawk. That’s down from 11 bands that played at the event last year.

This is the third annual Battle of the Bands and each year the event attracts more than 1,000 people, according to event organizers.

The bands are from AthenaHealth, Sailpoint, Under Armour, SpareFoot, Civitas Learning, WP Engine and Dropbox.

The event is free but ATC does want everyone to register for a ticket. There’s also an option to order food from onsite food trucks via Foodee for a few dollars extra.

The fifth annual Austin Startup Week runs Monday through Friday. Check out the full lineup of events here.

Get Set for the Fifth Annual Austin Startup Week

File photo of Jacqueline Hughes from Austin Startup Week's Startup Crawl. Photo by Laura Lorek.

File photo of Jacqueline Hughes from Austin Startup Week’s Startup Crawl. Photo by Laura Lorek.

Austin Startup Week is a great time to socialize and network with people in the Austin startup community and to learn something new.

This is the fifth annual five day event. It kicks off Monday, Oct. 5th and runs through Friday, Oct. 9th. It started in 2011, the same week Silicon Hills News launched and we’ve covered it every year. Jacqueline Hughes and Joshua Baer created the event to put a spotlight on the city’s startup community.

Baer has also declared Monday, Oct. 5th, the first day of Austin Startup Week, as vintage T-shirt day. Baer is a passionate and vocal advocate of quality T-shirts as a great marketing vehicle for tech startups.

One of the big events every year is the Austin Technology Council’s Battle of the Tech Bands, in which members of various tech companies with bands compete to be crowned the best band. It takes place Monday night, Oct. 5th, at Mohawk.

The Built in Austin job fair is also a great place to find a new gig. This event also takes place on Monday right before the Battle of the Tech Bands at Mohawk. It starts at 3:30 p.m. and runs until 6 p.m.

A new event this year is the Women in Tech mixer put on by Gina Helfrich at the Scarborough Building, 101 W. Sixth Street, Eighth floor. Helfrich flew in for Austin Startup Week in 2013 and then decided to move to Austin and work in tech. The event is co-sponsored by “Feminist Hack ATX, Women Who Code ATX, PyLadies ATX, Austin All-Girl Hack Night, EdTechWomen ATX, recruitHER, Third Coast InnovateHER, Lesbians Who Tech, Women in Data Science ATX, ATX Women Hardware Hackers, and Austin Pair Programming.”

On Wednesday, UK Trade & Investment Office will host Britain Open for Business, a Texas breakfast for startups and technology companies interested in expanding their business to the United Kingdom. It will feature experts from UK-based law firm, Taylor Wessing and UK-based accounting firm Blick Rothenberg. The event will kick off at 8:30 a.m. at Old School, 401 E. Sixth Street.

To further showcase the international flair of this year’s startup week, also on Wednesday morning, an Austin technology startup has a chance to win an all expense paid trip to Oslo, Norway for Oslo Innovation Week. The pitch competition is being put on by Fred Schmidt and will be held at Capital Factory.

To add to the bounty of riches on Wednesday at 10 a.m., PR Over Coffee’s Dave Manzer is hosting the third annual “Meet and Pitch the Tech Writers panel” at Techstars at 412 Congress Ave. The event features Stacey Higginbotham with Fortune, Tom Cheredar with Gigaom, Jared Wynne with the Daily Dot and Laura Lorek with Silicon Hills News.

To cap off the day, Wednesday evening, Ruben Cantu hosts the Austin+Social Good Summit featuring its third annual fast pitch competition.

Like the fireworks at the end of a great event, on Thursday, the Austin Startup Crawl takes place. It gets bigger and bigger every year as does Austin’s startup community. It is limited to the first 5,000 people to sign up for the crawl. It even has its own app, which provides an updated map of all the startups participating in the crawl.

Austin Startup Week concludes with a hangover breakfast on Friday morning.

Austin Startup Week is free, but the organizers do want everyone to register to attend the various events around town. It is sponsored this year by Capital Factory, Hired, Techstars and Taecho Group.

Correction: It is actually the fifth annual ATX Startup Grind. It’s been four years since it launched but this is the fifth event. Thank you Scott Gress for pointing that out!

FBombs, The Startup Week Panel on Failure

By SUSAN LAHEY
Reporter with Silicon Hills News

Chris J. Snook,  9WSearch’s Susan Strausberg, Denver area Entrepreneur Gabriella Krista Morgan, co-founder of P2BInvestor and Denver Management Consultant Allen W. Duck, photo by Susan Lahey

Chris J. Snook, 9WSearch’s Susan Strausberg, Denver area Entrepreneur Gabriella Krista Morgan, co-founder of P2BInvestor and Denver Management Consultant Allen W. Duck, photo by Susan Lahey

In a panel dedicated to failure in starting up a business, the audience seemed to be most focused on one thing—the risks inherent in picking a co-founder.

Panelists shared stories about enormous, botched business deals thanks to people they trusted, horrible lawsuits, embezzlement, and then the more common scenarios of just having to work through a challenging decision with a co-founder…or greet an ex-co-founder amicably when you run into him or her.

Fort Collins, Colorado, entrepreneur, investor and speaker Chris J. Snook moderated the panel that included 9WSearch’s Susan Strausberg, Denver area management consultant Allen W. Duck and Denver entrepreneur Gabriella Krista Morgan, co-founder of P2BInvestor.

The Ugly Breakups

Snook told about a publishing company he started with a co-founder who, one night, sent Snook a drunken email, saying he wanted out of the business. When the co-founder had a change of heart, Snook welcomed him back. Several months later Snook was served with a lawsuit, filed by his co-founder, alleging numerous breaches and illegalities.

Snook felt suddenly under siege. “We had 42 authors,” he said, “I had no idea if any of them were in on it, no idea if he was setting up shop. He didn’t really ask for anything,” but Snook bought his way out of the suit with roughly a quarter of a million dollars. “I was blown away, and it was shocking and hurtful, and it happens.”

Others told of business deals that went awry. Duck told a story about buying a financial planning company and keeping the seller on for the last three years before retirement.

“Within six months it was pretty clear things weren’t going according to plan,” he said. He flew up to the company—which was in Connecticut—and the seller told him he wanted to leave. Next thing he knew, he learned that the seller had been embezzling from the company and had started another company where he was re-signing all his original clients. Ducks company won a judgment against the man but it took three years to bring to trial. The day of the trial, Duck was meeting with the lawyer who was looking over papers and suddenly went white. It turned out the seller had declared bankruptcy.

“For us, it was a pointed battle. We needed to win this,” Duck said. But the company almost went broke doing it. “The judiciary works very well,” he said. “But it works really slowly, and you can go out of money quickly in pursuit of vengeance. You have to be very astute.”

When she ran Edgar Online, Strausberg said, MarketWatch offered the buy the company. Everybody was in favor of the deal and Strausberg empowered her CFO and president to handle it. Meanwhile, as she had amicable phone chats over a bottle of wine with Larry Kramer, founder of MarketWatch, her underlings were unraveling the deal without her knowledge. It died over the terms of the president’s contract. That wasn’t a co-founder issue though. Strausberg’s co-founder has always been her husband, Marc Strausberg.

Even when there’s no malintent, co-founders sometimes have to part ways over differences in vision.

One advantage to having her father as her co-founder, Morgan said, creates a level of trust and also a bond that has to be preserved. So it causes them to work through issues more carefully than they might if they were less connected.

But if things do go wrong, Duck said, “You will never get chastised for holding the moral high ground.” Disparaging previous founders only reflects badly on you.

The Biggest Mistake

Unfortunately, the entrepreneurs said, you rarely see a mistake as it’s happening. It’s only in retrospect. Morgan wishes she had spent less time raising funding and more effort getting to revenue. Duck had taken a subsidiary of a Finnish company from near bankruptcy to such financial success that it was supporting the parent company, by changing the culture and marketing tactics to those that would appeal more to Americans. One day parent company executives called and told him they needed $1 million to pay down debt. Duck believed the returns would be better if they kept the money in the company. When he told them so, they hung up on him.

Several days later, he said, there were six Finns in his office. “Finns don’t leave Finland,” he joked. “Ever. No one wants to see them and they don’t leave.”

Duck was let go and eighteen months later, the company was closed.

“It had become so personal for me…” he said. “If I could take that decision back, if I had humbly sent them the million dollars, that company would still be in Colorado. That haunts me. It was nothing more than ego that precluded me from making the different choice. Thirty five people lost their jobs, and they didn’t need to.”

Ultimately though, he said “The biggest fuckup for any business is to procrastinate. Everybody has seen the S curve of a company’s life cycle. If you procrastinate you limit the creativity of the organization to a point where it stagnates, boils back to inactivity…making a bad decision and then having to change course is better than not making a decision.”

Austin Startup Week’s Werewolves Vs. Villagers

Wolf Howling at MoonlightBY SUSAN LAHEY
Reporter with Silicon Hills News

Mercury Fund director Aziz Gilani says he uses it in board meetings because the premise isn’t who’s right, but who is most persuasive. Ali Syed of Justworks said it helps with pitch competitions. But mostly the 30 or so people who convened to play Werewolf at Techstars Wednesday night had no objective but to bullshit each other, catch each other in lies, and have fun.

Werewolf is the parlor game of choice in the tech world, and while games can last only about a half hour, players can go all night.

IMG_7243 2At the onset, each player gets a card and is either a werewolf, a villager, a seer, a priest…that’s the basic premise. There are variations. Werewolves kill. Villagers die and lynch suspected werewolves. Seers can identify werewolves, and priests can save people from death. The last two, considered “special characters” have some immunity because the villagers want to protect them. Anyone, including werewolves, can claim to be a special character. In fact, lying is encouraged.

Only the werewolves and the game director, in this case a commanding Brian Fryer of Evosure, knows who the werewolves are. At “night” everyone closes his eyes and makes noise—in this game a tribal drumming on the table—and Fryer cries “Werewolves wake up!” The werewolves, by mutual silent consent, pick a villager to “kill.” Fryer orders the werewolves back to sleep. “Seer wake up! Who do you want to see?” The seer silently accuses someone of being a werewolf and Fryer signals whether he is correct. “Priest wake up! Who do you want to priest?” The priest can choose to protect himself or another. When it’s time for the villagers to wake up, the newly dead villager must leave the game and the rest make accusations about who the werewolves are. If they spot them, the werewolf is killed, unless he can convince the villagers that he is not, in fact, a werewolf. Villagers are often wrongly accused.

IMG_7197 2In the first round, three Techstars villagers died and Gilani was accused of being the werewolf and given a chance to speak in his defense. Considering Mercury Fund paid for the game, one would have thought that would have counted, but no.

“I say it’s Andy (Aguiluz, expansion management consultant for Techstars.) Three Techstars people have died and nobody’s more anti-Techstars than she is!” he argued.
Aguiluz was, in fact, one of the most proactive werewolves. But the vote was taken and Gilani was killed.

IMG_7192 2“Okay, if you want to kill Van Helsing, go ahead,” he said, leaving the table.
Later, Jason Seats was accused of being the werewolf. “I am priest,” Seats pronounced with conviction. “And I am very good at this game. I am impenetrable at night.”

Yet the villagers voted to kill him.

“Wow,” someone said. “Not so impenetrable.”

IMG_7230 2Other arguments included “I can’t grow enough facial hair to be a werewolf.”
The game broke into screaming accusations and counter accusations at times and occasional statements of “These villagers are stupid.”

The first time he played, Nick Spiller of the UT Freshman Founders Program said, he was the seer. Seers are a special target for werewolves because they can identify them. Spiller announced his seer status in the first round and was too humiliated to come back and play for awhile. It was a rookie move.

“It was a kneejerk reaction,” he said in his defense. “I was in possession of this information and I shared it. But in this game, you have to prove yourself.”

Austin Startup Week Kicks Off

imgres-3It’s that time of year again to celebrate Austin innovation, entrepreneurs and tech companies.

Austin Startup Week, which began three years ago – the same week as Silicon Hills News, is bigger and better than ever before. And this week features lots of fun and free events. If you haven’t registered already, sign up now so you don’t miss out.

Today’s highlights include Vintage Startup T-shirts – which has already got the Twittersphere buzzing with t-shirts from Ben Dyer, sporting a Peachtree Software Tee, Bob Metcalfe in a classic 3Com Tee and Joshua Baer in Dash and Other Inbox T-shirts. And Fred Schmidt with his Origin Systems T-shirt from 1981. The company, founded by Richard Garriott that started Austin’s gaming industry.

The big events for today include:

SXSW Eco Demos in Brushy Park, across for the Austin Convention Center, which is free and open to the public from 10 a.m. until 2 p.m. SXSW Eco, a conference focused on green tech and more, also kicks off today at the convention center.

Looking for a job? Look no further than the Built In Austin Startup Career Fair from 3 p.m. until 6 p.m. at The Mohawk, 912 Red River.

And don’t forget the opening party: the ATC Battle of the Tech Bands which runs from 6 p.m. until 10 p.m. at The Mohawk. Read more about the event in Susan Lahey’s story.

Austin Technology Council Battle of the Bands: Geeks Who Rock

iStock_000020943970XLarge copy

By SUSAN LAHEY
Reporter with Silicon Hills News

There are moments in a person’s life when the stars line up and they are—at least for that moment—totally cool. Take geeks. Geeks used to be completely uncool, juxtaposed against people who played in a band who were inherently cool. But now, geeks are just about the coolest, and geeks who play in a band? Wow. Which brings us to the Austin Technology Council’s Battle of the Bands that will kick off Austin Startup Week October 6 at Mohawk.

Battle of the Bands was a notion ATC came up with last year and frankly, said ATC president and CEO Julie Huls, they didn’t know whether it would fly.

“We were looking for a fun activity to do and a way to showcase our member companies,” she said. “We had been hearing about the crossover between music and tech, a lot of people in tech play music. We wanted to showcase their talents in a way that was a unique, different, fun way for companies to compete with one another.”

But they didn’t know if anyone would show up. As it turned out, 1,000 people attended last year. Battle of the Bands, Huls said, is a great chance for Austin to shine in front of companies that might be in town for Startup Week trying to decide whether to locate here, as well as for companies that are recruiting, to demonstrate some of their internal culture for people interested in relocating.

The Contenders

This year, about 20 bands applied and 11 will play, largely chosen on a first-come-first-served basis. The bands are:

DevDigital– Mitch and the Texas Jam Band

SailPoint—Him and Her Crew & Justin Big and Black Heart

SpareFoot—Boogaloo Grove

HP—HP Austin Rocks

MapMyFitness—Digital Tiger

Spredfast—Golden Solid

Bazarrvoice—Feedback

Reachforce—Vorcha

WPEngine—The L4s

Securenet–$$

Athenahealth—P1

Each band gets two songs in a time span of 15 minutes.

Musicians Who Code

In order to play, bands had to be tech people employed by Austin tech companies, though they didn’t all have to be employed by the same tech company.

Golden Solid from Spredfast, for example, includes drummer Chad Gowan and bassist Zac Kloepping, both software engineers at Spredfast. But it also includes vocalist and guitarist Sam Berniard, storage marketing manager at Dell, and guitarist and keyboardist Ian White, who is a software engineer at T3. Gowan and Kloepping have played with the others in prior bands.

“I think Austin is the big correlation (between music and tech),” Gowan said. “A giant percent of people you meet are musicians or at least have an appreciation for music. And the tech world is really hot in Austin, there are a lot of companies moving in and a lot of good developers…. Being in a band is kind of a do-it-yourself thing and staying up with latest technology is do-it-yourself too.”

Previously Gowan and Kloepping said, they played in bands that focused on complex music, syncopated rhythms, similar to the Police. Their current band is more “melodically driven,” more like a cross between the Beach Boys and the Foo Fighters. Something people can sing along to. It’s less about showing off and more about entertaining people, they said.

SpareFoot’s Boogaloo Grove, on the other hand, leans toward funk.

“We gravitated toward a funk jam thing,” said “let’s just get together and see what happens,” said Ari Dvorin, saxophonist, base guitarist, and chef for SpareFoot. Their music might incorporate a variety of flavors, including hip hop, he said.

“Around the office one of our extracurricular activities is jam sessions,” said SpareFoot developer Alan Nguyen, who plays multiple instruments and hopes to be a professional musician some day. “We thought, ‘We play music recreationally, why not form into something solid for battle of the tech bands?” They also hope to perform at SpareFoot’s SXSW party.

In fact, a lot of tech organizations have loosely organized musical jams and bands, as do Capital Factory and Techstars. That makes sense since, besides the fact that these companies are located in the self-proclaimed Music Capital of the World, research shows a direct correlation in the brain between math and music. Also, Dvorin and Nguyen said, playing music with co-workers builds rapport. “It helps us feel more open and confident around each other,” Nguyen said.

Prizes for the winner include a day of recording at Arlyn Studios, two tickets for SXSW Interactive and two VIP passes for Fun Fun Fun Fest. Judges include Hugh Forrest, director of SXSW Interactive, Adi Anand, national program manager for DoStuff Media, Gillian Wilson, president of Austin Startup Games and Will Bridges, co-owner of Arlyn Studios.

“Ultimately,” Dvorin said, “it would nice to win. But it’s just awesome to get together and play music with people you work with.”

Startup Week Founder Jacqueline Hughes: The Person Behind the Community

BY SUSAN LAHEY
Reporter with Silicon Hills News

Jacqueline Hughes at Austin Startup Crawl last year at Capital Factory, photo by Laura Lorek

Jacqueline Hughes at Austin Startup Crawl last year at Capital Factory, photo by Laura Lorek

Jacqueline Hughes seems the antithesis of a typical event coordinator—what Austin Technology Council’s Grover Bynum calls “whistle and clipboard” people. Event coordinators have reputations for being frenetic, type A, wearing frozen, stressed smiles. Hughes, curled up in an easy chair at Techstars Austin, seems relaxed, chill, though she’s in the midst of putting final touches on several major events including her own creation: Austin Startup Week. She’d worked all night until 7 a.m. and was back in the early afternoon to do more.

“It’s kind of exciting to email someone at three a.m. asking for something you need and getting an answer back immediately,” she laughs. “It’s like ‘You are crazy too! What’s wrong with you? Who stays up working until three in the morning?’”

Hughes does. Regularly. Ever since she got introduced to the Austin tech community with her job as community manager for an Austin co-working site, she’s become a fixture at nearly every tech event, many of which she planned and executed. She not only created Austin Startup Week, she’s been either chief planner or involved to her elbows in numerous other events including several major events for Techstars, Made in Austin Career Fair, Rise Week and many SXSW events. The sociology major from Texas State University has become an expert in the sociology of Austin tech. It lets her exercise two of her favorite things: Getting to know interesting people and creating fun events.

The Person Behind the Community

“Sometimes, there are people out front and when you dig a little bit deeper, you find the person behind the person,” said Jason Seats, managing director of Techstars Austin. “I feel like Jacqueline’s the person behind the community. Almost anything that’s happening here, she’s really just one hop away from it, even the things she’s not directly involved in. She knows how all these things plug together, what’s involved, what kinds of things people like to do and don’t like to do. I feel like calling her a connector is underplaying it… I would be hard pressed to pull someone out of the startup community that she hasn’t done something for.”

In a town with more events than calendar days, planning something unique and fun is a huge challenge. Hughes’ take on it is: “I like to see people have fun. I like to see them happy.”

Julie Huls, President of Austin Technology Council with Jacqueline Hughes, founder of Austin Startup Week, at the ATC Battle of the Bands last year, photo by Laura Lorek

Julie Huls, President of Austin Technology Council with Jacqueline Hughes, founder of Austin Startup Week, at the ATC Battle of the Bands last year, photo by Laura Lorek

“What I observe her doing is she gets a rough plan and then she walks through it over and over in her mind,” Seats said. “Every time, she thinks up 15 more small details. Maybe this isn’t the right door for people to go in, because traffic clogs here. ..she likes people to have fun and enjoy themselves and that’s the mindset she has on. ‘Okay, I’m Joe Schmo, what will I think when I walk in? What am I going to see? Will be the music be too loud in this area? Will I be able to meet people? Will I feel awkward?’”

At the same time, Seats said, “She lets things happen the way they’re going to happen.”

Bynum, ATC senior advisor, said Hughes is not only incredibly laid back, but also transparent and eager to collaborate, let events evolve organically, give other people a voice in what the event will eventually become.

“She’s an excellent national ambassador for the city,” he said. “She recognizes that the value of Startup Week is still being determined and instead of trying to figure out what it is, she understands the community, lets different approaches be heard…she introduces the value and lets people chew on it.”
One Startup Week, he said, he wanted to bring his policy and advocacy background into the mix and offer a serious discussion on Internet policy led by a national advocacy group at City Hall. “We really didn’t know what the uptake was going to be,” he said. Though they had some concerns that the event—being less sexy and festive than other sessions—might not draw participants, Hughes encouraged Bynum to go for it. “It turned out we had a full house at City Hall when it might have just been me. That’s been a successful piece of Startup Week ever since.”

Falling Into the Startup World

In many ways, Hughes fell into the startup world and the world of event creation. A product of the Houston suburbs and its traditions—like Cotillion—she discovered a whole new world of interesting, passionate people when she went to Texas State for College.

“I had these amazing teachers,” she said. One class, A People’s History of the United States, gave her a completely new view on the world. “It was the first time I kind of learned that Christopher Columbus wasn’t the nicest guy in the world….I was interested in studying values and norms and it opened my eyes to the fact that I don’t have to fit into a square or a circle.”

imgresShe was living in Austin, a year into her master’s in sociology, when she decided to look for a program where she could get a Ph.D on environmental sociology and she and her boyfriend at the time planned a road trip to schools in Colorado, Utah, California, Oregon and Washington to find the right programs. Then they broke up. On the one hand, her plan had now disappeared and she was a little lost. But around the same time, her grandparents left her $20,000. She took off for London, then returned to the U.S. and spent the rest of the year making the money stretch, taking road trips all over the U.S. and spending tons of time alone.

“I loved it,” Hughes said. “I felt very free. I had this couch on the porch and I would lay on it and read (Harry Potter among others), then fall asleep, wake up, read some more. I napped during the day and only slept three or four hours at night. At one point I went to get a massage and the massage therapist said ‘You don’t have any stress…at all.’ I’m really glad I had that time. I don’t think a lot of people get to have that.”

But eventually the money was running out and it was time to get a job. She was living in Austin and knew networking was key. She got a Twitter account and started connecting with people and going to events. “Someone on Twitter told me about TabbedOut, Foursquare, I started thinking about what else you could do with apps.” This was another whole new world. When she started meeting techies and geeks, she didn’t even know there was code behind websites. But once again, she was surrounded by interesting people tackling cool projects.
After sending out 100 resumes, Hughes was hired to build membership at a co-working space. That year she attended 300 events, going from a life of near total solitude to one surrounded by people.

Bridging the City

“I spent time just meeting people for about six months,” she said. “I was that person who showed up at everything. That was what I was known for, just knowing people. I didn’t think that was really admirable. It came sort of naturally to me to meet people. I have a really good memory. I don’t remember movie quotes or actors but I’ll remember when I first met someone, where it was, what we talked about. People started putting me on a pedestal because I knew so many people. I felt like a phony, like that’s the only skill I have? So I decided to start working on my own startup.”

Hughes wanted to create a platform that would have all the city’s events listed in one place, without having to input the data. It was called Bridge the City and it was to be similar to Foursquare’s new Swarm app.

“One thing I think Foursquare is not as good at is, if I was going to Refresh Austin and it was at Buffalo Billiards, I wasn’t headed to Buffalo Billiards—I was headed to Refresh Austin.” Bridge the City would focus on the events and make it easy to find the people you wanted to meet at those events, something she said no app does well, even still.

She and her cofounders spent three months working on it, then they split up.

“We came together wanting to solve the same problem, but couldn’t align on how to get there. After we released a MVP — an events calendar – we began struggling with direction. Half of the team wanted to build something simple similar to what Swarm looks like, the other half envisioned something closer to what Do512 looks like today. In the end, neither side was willing to compromise and we split up. I think the team was looking to me to steer us in the right direction, and I didn’t step up.”

The Birth of Startup Week

Jacqueline Hughes, photo by Susan Lahey

Jacqueline Hughes, photo by Susan Lahey

Hughes still had the co-working job and started working with startup Qrank, but neither was full time. One day, when she was planning a trip to San Francisco, she created a pitch to ask the CEO of Plancast whether he was interested in hiring her to do community management for that company as well. He hired her. The idea for Austin Startup Week came after Hughes realized that people in Boulder were using the app in a really “interesting way.” Plancast sent her to Boulder where she was introduced to Boulder’s Startup Week. The organizer gave her permission to borrow as many of their ideas as she liked.

The consummate event attender, Hughes wanted to put a lot of the area’s startup activities in the same week and anchor them with something like a UT or Capital Factory demo day. Josh Baer was the first person she approached.

“I wouldn’t say I’m a very good event planner but I’m a very good event creator. I’m really good at figuring out what’s fun. I like to create fun experiences for people…. I’ve worked with some event planners who were amazing. They make my life so much easier. They go through everything I’ve done to make sure I’m not leaving anything out.”

The first Austin Startup Week was in 2011 and those early budgets were meager. One good thing about that was that they had to ferret out interesting locations, like GSDM’s entryway, that could accommodate both their budget and their crowds. Sponsors covered specific events, usually to the tune of a few hundred dollars. But this year the organization decided to take on one big sponsor for each day of the event. Some of the early sponsors included Indeed and AT&T. Meanwhile, Hughes has been responsible for more than 50 events—everything from dinner parties to Startup Week.
She’s become to go-to events person for Austin Techstars.

“I love working for Techstars,” she said. “I have never worked with a group of people who work so hard. Everyone on the team is just so good at the things they’re good at and they trust me to own and be good at the things I’m good at.”

One of the most recent events she threw for Techstars was a retreat at Marfa. She remembered the last night, when they hadn’t brought a cooler so she lined a grocery cart with trash bags and filled it with ice for beer and Seats and a couple others pulled out their guitars and played under the starlight.

“Things that are easy to do in other places are not easy to do in Marfa,” Seats said. “Just finding seating for 40 people at once and catering—we had to have four or five different restaurants cater together when we were on that trip…I think she surprised herself at how well that worked out. It could have been horrible but every part of it was so over-the-top perfect.”

Hughes knows she’s the kind of person who could work herself into the ground. Her four-year-relationship with her boyfriend, Scott Gress, helps her to stay balanced. Gress, who is also working on a startup is an intense worker too. But he helps her know when it’s time to turn off the computer and say she’s done for now.

One day, Hughes wants to be an investor. Starting a business is so hard, she said, she wants to be able to support people’s entrepreneurial ventures. Meanwhile, she’s still more comfortable being the person in the background, making things happen.

“I would love for her to become more comfortable owning the recognition for the stuff she does at this level,” said Seats. “She does so many things for so many people and they get the credit, which is noble and nice and we all are the beneficiaries of it.”

VCs and Founders Give Advice on Funding a Startup

By LAURA LOREK
Founder of Silicon Hills News

BWJolG9CMAA9hCnFunded companies, which are performing well, get nice offices and free lunches for their employees, said Mike Dodd, partner with Austin Ventures.
Mass Relevance is one of its portfolio companies performing quite well. And on Wednesday, the company hosted a panel discussion about successfully raising capital for a startup company as part of Austin Startup Week.
The two-year-old company has grown from four employees to more than 120 employees and raised $5.5 million in a Series A round of funding and it already has millions in revenue from customers like NBC, MTV Networks and CNN. Its partners include Facebook and Twitter. Mass Relevance, formerly known as TweetRiver, aggregates social media content for its customers.
Claire England, executive director of RISE Austin, moderated the discussion, which paired two successful startup Co-founders with their lead investors. Eric Falcao, founder and Chief Technology Officer of Mass Relevance joined Dodd of Austin Ventures and Josh Kerr, Co-founder and CEO of Written teamed with Krishna Srinivasan, general partner at Live Oak Venture Partners.
Mass Relevance got early traction by landing a six-figure deal with MTV, said Falcao. And then the Co-founders brought on Sam Decker, formerly of BazaarVoice, as its CEO. He had connections with Austin Ventures. Mass Relevance got seed funding easily and raised its first round without a lot of trouble, Falcao said. Mass Relevance also went to California and received funding from Mike Maples Jr.’s Floodgate Partners, an early investor in Twitter.
Kerr bootstrapped his first two companies, but he wanted to build a really big company with Written, which markets bloggers’ content to brands, so he saw the need to get funding from the start. He was able to get a seed round from Live Oak Venture Partners.
“I wanted the structure that comes from raising money and the acceleration that comes with it,” Kerr said.

Signs of a successful startup

Next, England asked the venture capital investors to talk about the signs they look for when evaluating a startup investment, the warning signs of bad investments and top signs of good investments.
“This is such a people business,” said Srinivasan with Live Oak Partners. “I think that is the most important factor. We’re looking for people who have an insight from what they have done before.”
Live Oak Partners also looks for people they can work with and collaborate, Srinivasan said. The ones that don’t work out are entrepreneurs who are not collaborative and those that don’t want to be great partners, he said.
“It’s obviously team, team, team,” Dodd said.
BWJozAFCYAEAKeaBut Mass Relevance had a really great product and they were solving a problem of aggregating real-time Tweets for companies early on, Dodd said.
“What we try to do is look around the corner at the early markets,” Dodd said.
Austin Ventures saw Mass Relevance as being one of the big players in social media for television, Dodd said.

The importance of relationships

Next, England asked how often the companies and funders met and interacted with each other.
Falcao said he sees Dodd once every quarter, but that Dodd met with other executives, like Decker, on a more regular basis.
Dodd said he talked to Decker about once or twice a week. He joked he visited the Mass Relevance office often because they have free lunch for employees. His firm also helped in hiring some of the senior executives and helped to recruit people.
“We can get six head of sales literally almost over night,” he said.
Kerr said Srinivasan gives his seed stage company sage advice.
A good investor helps in team building and scaling the company much more aggressively, Srinivasan said.
England also asked if there was a downside in partnering with investors. The question was met with laughter and then a bit of awkward silence before Falcao answered.
“When things are going well, things are going well,” said Falcao. “VCs are good. They come with checks and advice and more checks. When things work, they work. So far, we haven’t gone through hardship. So it’s tough to point to anything.”
The downside is companies start to rely on them, Kerr said.
“They are bringing this really great value to the business. It’s not just money,” Kerr said. “It’s your buddy. It’s much, much more than that. But you’re not the only company they are invested in and you’re not getting 100 percent of their time. So the only downside is you might want more and not get it.”

What happens when things are not going well? England asked.

imgres-10“I have plenty that are not doing well,” Dodd said. “They don’t have offices like this. They don’t have free lunches. We focus on burn.”
Austin Ventures works to make sure they are focused on maximizing profit and minimizing losses and working to get market share in their industries, Dodd said. The relationship between the investor and the entrepreneur doesn’t change, he said. In a few cases, though, it has, he said.
“I still believe in what they are doing, it’s just taking longer than expected,” Dodd said.
Venture capitalists like to chase trends but it’s good to keep focused on the main business and not get distracted by whacky ideas and the latest trends, Falcao said.
“You need to ask yourself are we just chasing something new?” Falcao said. “You shouldn’t always do exactly what your customers want you to do. There’s something about staying on a mission and staying focused rather than chasing X.”
When a firm makes an investment and things don’t go as planned, the investors work to salvage the value and help hold the ship together to find an acquirer or to get some modest outcome, Srinivasan said.
“Those things take a lot of hard work,” he said.

Making the pitch to investors

BWPJv2yCIAAwxMGEngland then asked the entrepreneurs how they marketed themselves to potential investors.
Kerr said when he pitched his company to Live Oak, Srinivasan sent him three really challenging questions in an e-mail message. He had time to think about the answers, but he couldn’t come up with the answers.
“Ultimately I ended up going back to him and saying these questions are too hard,” Kerr said.
At an early stage, the investment in the company is more about the people than the idea, and it’s better to be honest and admit when you don’t know something, Kerr said.
“If you don’t know the answer, you don’t know the answer,” he said.
Srinivasan said that he liked the honesty that Kerr displayed. He was able to evaluate the risk of investing in them and to gauge how much it would take to get the company to the next level, he said.
Startups should know how to answer basic questions from investors about customer acquisition costs and know how to scale, Falcao said.
“If you haven’t thought about that, you’re not thinking about how hard it is to scale a SMB (Small to Medium-Sized Business) company,” Falcao said.
How much money should startups ask for and how much time should they spend doing it?
The size of a check should be reflective of the stage of the company and issues it is facing, Srinivasan said.
“Just getting out of the gate, you’re going to raise a little bit of money,” Dodd said.
Typically, seed stage companies raise money from angel investors ranging from $350,000 to $1.2 million, Dodd said. A Series A round receives between $2.5 million and $7 million and a Series B round can get up to $20 million, he said.
Kerr said he spends 90 percent of his time raising money. His other partners focus on running the business.

The startup ecosystem in Austin

250px-AustinSkylineLouNeffPoint-2010-03-29-bEngland asked if Austin had a strong enough funding ecosystem to support startups.
Both Kerr and Falcao raised money from California from Floodgate Investments.
“More firms. We need more firms here,” Dodd said.
The ecosystem needs more sophisticated seed stage investors, he said. He said he wished there were three or four more firms like Live Oak to increase competition for funding, he said.
Raising second and third round funding is easy if a company is doing well, he said. But it’s harder to get people in the valley to invest in early stage companies, he said.
Austin needs more firms focused on early stage, Dodd said. More investment firms are good for Austin, he said.
“A rising tide floats all boats,” he said. “The more money that is in town, the better everyone will do.”
In the 30 years he has been in the market, this is the most vibrant and most exciting time, Srinivasan said. The quality of the ideas is really good, he said.
“Clearly this place can have more early stage companies,” he said.
The overall maturing of Austin’s startup ecosystem has contributed to Austin’s vibrant startup community, Srinivasan said. People who have been through the process a few times and transplants from California now populate it, he said.
“It’s a genealogy effect,” Dodd said. Successful companies spin out successful startups, he said.
Austin Ventures has funded three or four startups by people who left BazaarVoice, a company Austin Ventures backed that went public, Dodd said.

Battle of the Bands and Made in Austin at Austin Startup Week

By LAURA LOREK
Founder of Silicon Hills News

IMG_1478For the second year in a row, Eric Bandholz travelled from Spokane, Washington to attend Austin Startup Week.
“I lived here in 2003 and 2004 and I’ve been waiting for past ten years to get back here,” Bandholz said.
His favorite events during Austin Startup Week include epic office hours, the Startup Crawl and a UX Design mentorship meetup. The week long celebration of Austin’s technology entrepreneurs and industry is jammed packed with daily events at various venues around town.
The event kicked off Monday and runs through Friday.
Monday night, Bandholz manned a table for his company beardbrand at the Made in Austin Career Fair and later attended the Austin Technology Council’s Battle of the Bands at Mohawk.
Before the Battle of the Bands, 50 companies had tables at the Made in Austin Career Fair, sponsored by HP Cloud, CoolheadTech, Masters of Technology Commercialization Program at UT, Reed & Scardino LLP and PayPal.
IMG_1470Erik Larson and Frederick “Suizo” Mendler of TrueAbility, a site that tests the technical aptitude of Linux administrators and others, made the trip from San Antonio, to recruit a few new employees.
Other companies in attendance included Mutual Mobile, The TechMap, SpareFoot, MapMyFitness, StoryPress and Tech Ranch Austin.
Bandholz is one of ten people Jacqueline Hughes, organizer of Austin Startup Week, arranged to fly in for the event. Altogether, ten people flew in this year for Austin Startup Week, up from six last year, she said.
Overall, Hughes said she expects more than 4,000 people to attend the various events throughout the five days of Austin Startup Week, up from 2,500 people last year, she said.
Bandholz plans to move his company, beardbrand, to Austin in April. His business partner, Lindsey Reinders moved here a few months ago. IMG_1489Their ecommerce site sells products for the bearded lifestyle, Bandholz said.
“We foster style for the urban beardsman,” said Bandholz, who sports an impressed beard himself. “We do a lot of business on the Web. We could be located anywhere. Austin is our city of choice. We’re coming here because it’s a cool city.”
That’s the kind of thing Julie Huls, president of the Austin Technology Council, likes to hear. She arranged for the first ever Battle of the Bands Monday night at Mohawk. The event featured eight startup bands made up of technology workers at various startups around town.
“There’s similar patterns between musicians and technology people,” Huls said. “Music is a huge part of the technology industry in Austin. The technology industry wouldn’t be here without music. The two industries are symbiotic.”
The competing bands included Scorpio Rising, Digital Tiger (MapMyFitness), TroubleHawk (BuildASign), Thanks Light (Big Commerce), Boogaloo Grove (SpareFoot), The Pons (PeopleAdmin), Vorcha (ReachForce) and Hector Ward and the Big Time (Oracle).
IMG_1490TroubleHawk from BuildASign won the crowd favorite as measured by a clapping meter.
Vorcha won the judge’s favorite and as a prize gets time to record in Aryln Studios.

© 2024 SiliconHills

Theme by Anders NorenUp ↑