• Anthony Garibay

Venture Capital for Austin Startups

"Keep Austin Weird" is a fitting motto for the live music capital of the world. But as venture capital funding grows and several investors and entrepreneurs head over to see what types of startups we’re making here, it might be time to whip up a different motto specific to the venture capital scene.


Austin’s startup environment is taking off. It's not only the lack of state tax that makes it an attractive destination for startups. Last year, Austin ranked 7th in the country for the amount of venture dollars invested in locally-based startups ($4.7 billion of equity funding across over 380 deals). The numbers are showing a very positive light so far.


This means there's a huge amount of potential for Austin-based startups to attract investments from venture capital firms.


Keep reading to find out why it's time for Austin startups to take the chance and which venture capital studios are on the hunt for goldmine investments.



Austin—A Growing Hub for Startups


There are multiple reasons why more venture capital dollars are being focused on the startup ecosystem in Austin.


A Growing Talent Base


Austin is more than just the state capital of Texas. It's also a tech hub that's home to a thriving startup community.


Companies like Apple and Google are building major hubs across the state, which will be magnets for talent. And Facebook's parent company Meta signed its 'largest ever' lease in Austin. Katherine Shappley, the head of the Austin office for Meta, stated that Meta is focused on growth in Austin.


Eric Engineer, a venture capitalist at S3 Ventures, says, “As more talented people move to Texas, more capital will follow them, which will then attract more talent.”


With an influx of big corporations looking to take advantage of Austin, there's also been a corresponding rise in the outlook for talent in the field of science, technology, engineering and math (STEM).


Austin, along with Dallas and Houston, earned ranks on the 2021 STEM Job Growth Index. The STEM industry is generally said to be more shock-resistant to downturns and economic shocks, making them a highly attractive investment for VCs looking to minimize risk and keep returns steady.


Austin's VC Investments are Growing


Don’t take our word for it. We’ll let the numbers do the talking.



Source: Crunchbase


Texas had $6.9 billion in venture funding last year, indicative of an attractive trajectory ahead for startups looking to secure funding. In 2020, Silverton Partners raised $144 million to focus on Texas-based startups.


To inspire you, look at ZenBusiness. This Austin-based company obtained $200 million in funds during a round led by venture capital firm Oak HC/FT.


Your startup could be next.


The Tech Sector is Booming


Sectors spanning the tech industry are growing across Texas and especially in Austin. Tech continues to show potential across the board with innovation spreading in various sectors of the economy including financial services, healthcare, education and more.


Morgan Flager from Silverton Partners says, “The playbooks in these massive industries are being rewritten and we are certainly looking for entrepreneurs who have a strong point of view relative to what the future will look like.”


Investments in firms integrating artificial intelligence and machine learning, in particular, are growing. The SaaS space, a sector that Austin is known for, continues to be a keen focus for investors as well.


As more venture capitals invest across Texas, Austin is positioned to benefit from local job growth and revenue acceleration for startups. The diverse and hard-working population is becoming more attractive by the day for both investors and budding entrepreneurs.



Austin’s Prominent Venture Capital Firms


The investments made by venture capital firms in 2021 had a 211% growth compared to the year prior. These investments were a mix from seed funding to later-stage rounds. In just the fourth quarter, Austin had $924 million invested across 95 deals.



Source: AXIOS News


Despite the pandemic, the startup ecosystem has grown greatly with 2021 marking a significant chapter. This also means newly established startups have a chance to secure funding from top VC firms this year too.


In the last two years, the most seed round funding went to software and SaaS startups. This is expected to continue this year.


The top three venture capital firms for startups seeking seed round investments in Austin are Silverton Partners, Next Coast Ventures, and ATX Venture Partners.



Silverton Partners


Where deal numbers are concerned, Silverton Partners topped the list.


This VC firm has invested in over a hundred startups across different sectors. Its recent investments have been focused on companies in the sectors of Real Estate Tech, VR/AR, Logistics and Consumer Packaged Goods.


If you’re a startup with a heavy focus on tech, Silverton Partners may be right for you.


Next Coast Ventures


Next Coast Ventures ranked second in securing the most deals.


Next Coast Venture’s latest investments were in startups focused on creating Developer Platforms, eCommerce, Marketing Tech and Fintech.


If you’re a SaaS startup, it’s worth pitching to Next Coast Ventures.


ATX Venture Partners


Third comes ATX Venture Partners. This VC focuses mainly on seed and Series A funding with a keen eye on tech startups.


Its sectoral focus includes HR, Sales and Retail Tech, Curated Marketplaces, AI and even businesses in the Satellites and Drones space.


Sounds like your startup? Explore ATX Venture Partners as an option.


Get Started on Your VC Journey


Are you a startup in Austin? 2022 is a promising year and it’s understandable if you’re nervous about pitching to investors in a buzzing Austin ecosystem.


That’s where Garibay Ventures comes in. We’re here to help you get the seed funding you need.


We’ve raised over $50 million and specialize in providing startups with network and marketing support, revenue acceleration, and provide training for startups looking to make an impact in the world.


We can provide your startup with the tools and expertise it needs to flourish in Austin’s thriving ecosystem—be it through seed funding or advisory service pertaining to marketing and more!


Ready to begin your journey? Contact Garibay Ventures today.


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