My love letter (and goodbye?) to Austin
joahspearman
7731

I’m sure a lot has changed since 2014 when I last raised in Austin but in my experience it is possible to raise money for consumer businesses in Austin. Before we pivoted to Cratejoy we had raised a significant seed round from almost entirely Austin investors. It’s also possible to get west coast (and really all over the world) investors to invest in you and stay in Austin. We’ve raised $11M, about 80% of it from non-Austin investors.

For me the secret for raising successfully in Austin was getting individuals on board — high net worth individual investors that I established a personal rapport with. With the exception of the Capital Factory all of the angel funds (for me) were operating off of FOMO and social pressure more than fundamentals. The VC scene does contain some bad actors, and I probably wouldn’t spend a lot of time looking for institutional money in Austin. I would get my growth funding west or east coast.

Having raised millions in both SF and in Austin I can say that it is definitely easier in SF. However, the cost of living is so much lower (and I would say quality of life is so much higher) in Austin that I’m glad we’re based here. It’s also relatively easy to recruit from all over the world to Austin, everyone has seen the continuous stream of articles rating Austin as one of the best places in the US to live.

There’s also another great side-effect of being Austin which I didn’t notice until we were already scaling very quickly. There’s a smaller number of startups in Austin that are producing millions in revenue very quickly (as compared to SF) but the enthusiast and talent pool is very large. When we started to hit scale we had way more advocates than we ever expected. Austin wants home-town winners and it throws its weight behind the ones that look promising, but you have to have something to show.

My cofounder and I consider having Cratejoy based in Austin a competitive advantage.

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