Today, the Austin Technology Council (ATC) and the Austin Chamber of Commerce released the results of a Capital Landscape Analysis out of the Munday School of Business at St. Edward’s University that provides a comprehensive, first-time view of the capital investment landscape in Central Texas’ innovation sectors as compared to other leading markets. This empirical demographic study, which counted capital sources in nine major metropolitan areas and assessed each city on eight distinctive capital funding sources at various stages of growth, is the most granular analysis to-date. The report found that while Austin leads all other markets in startup activity and its funding landscape includes a strong representation of seed and early stage funding sources, the city’s smaller number of later-stage capital sources is inhibiting companies from reaching their full potential, exposing the urgent need to recruit, retain and activate late stage capital sources to the region.

Julie Huls, President & CEO of the Austin Technology Council, and Michele Skelding, Senior Vice President, Global Technology and Innovation at the Austin Chamber of Commerce, took some time to discuss their partnership on the study, and given the results – where do we go from here?

For years, people have wondered if Austin didn’t have enough investors or if it just didn’t have enough companies worth investing in. Does this research end this chicken and egg debate once and for all?

MS: I think for anyone who has spent time in Austin, there’s been less doubt of the caliber of talent and ideas coming from our region, but the challenge question remains: can our most innovative ideas raise the amount and type of capital needed to scale revolutionary companies, through all stages of growth in Austin, Texas?

We know that by increasing awareness and marketing our critical mass of exciting, diverse and innovative companies here to out-of-market investors is a first step forward. In the past few years, we’ve dedicated targeted efforts getting in front of VC/PE firms on both coasts to increase awareness and interest in taking a longer, closer look at Austin investment opportunities. While investment activity has been increasing on an upward trend, this study provides a more comprehensive analysis on the importance of the capital network effect on a region, showing us where we stand, and where we still have much work to do.

JH: I believe this data points us to opportunities to improve and increase our categories of investment capital in Austin. This data is also the first of its kind in our region, and second in the US. Arming ourselves with this information provides us with much more context than we've ever had before and hopefully allows us to expand our conversation beyond the single-dimensional questions about if we have enough or if our companies are good enough.

Why is it important that your organizations are releasing this capital data analysis in collaboration?

JH: It’s important for two reasons. 1) Both organizations believe this data is thorough, complete, and worthy of deep analysis and attention. We collectively have the eyes of 1200 Austin technology executives and 3000 Austin business leaders – and Michele and I are asking them to take a long, hard look at the gaps and opportunities in our capital landscape and begin a dialogue about what we can all do to strengthen the regional economy. 2) ATC and the Chamber are also setting distinctive roles for our organizations as we take action. The Chamber, with Michele at the helm, will continue to recruit out-of-market investors and companies to Austin through roadshows and high-quality events. The ATC will play the role of connector in Austin between seasoned tech execs, new companies at all stages, and new investors interested in the Austin market. We will both - I assure you - be working more closely and efficiently to raise our investment game in this market.

MS: One of the best attributes of Austin is our spirit of collaboration, a huge driver of what attracts smart, creative people and companies to our entire region. With our work through Opportunity Austin, we’ve learned that when we, as an entire five county region came together in partnership, that’s when we truly have found our success in economic development. A collaboration of resources, connections and skills of the entire community - including corporations, public entities, civic organizations and academic institutions - are the strength that sets Austin apart. Our approach to increasing the capital source pipeline for our region is no exception, and by leveraging the unique resources of each our organizations we can provide maximum impact to the phenomenal ideas and companies that are produced here.

If discussion and cooperation are the next step, what would you stress to your members and other tech and financial leaders to know and share about these findings?

MS: What we hope that our stakeholders take away from these findings is that 1) there are clear areas of opportunity, 2) we have a strong, early stage base to build from, and 3) now is the time to fine-tune and execute on a cohesive strategy both locally and out-of-market. One thing this region knows well is how to come together in service of an opportunity goal to secure future prosperity for our city.

We have a strong blueprint in place and we welcome and look to our financial, tech, life science, academic and political leadership to take a seat at the table and bring their ideas, expertise and enthusiasm as we educate the local, national and international investment community about opportunities in Austin.

JH: Our companies are losing out on opportunities to scale as quickly and as aggressively as companies in other markets because of our incomplete capital sources. We know from our data that the higher the number of capital sources in any market, the higher the average investment. Austin needs more sources, which would increase our average investment in our companies. More capital equals more fuel for faster, more aggressive growth and frankly, adds to our odds that companies stay in the game longer for eventual IPOs or more substantive acquisitions. We don't have to emulate Silicon Valley with overinflated valuations or dozens of unicorns but we also shouldn't sell ourselves short.

Given these new insights, where does Austin go from here, and how can the larger community support the mission?

JH: Start talking. Get involved with ATC and the Chamber. And for starts, join us on Nov. 5 for a Capital Roundtable where investment and tech leaders will discuss these findings and next steps for Austin. For more information on the roundtable, see the event page here.

MS: Be engaged with your community. Stay informed and be proactive. By aggregating individual efforts, we will be able to fully leverage the Austin story as we rise to our next level of growth. Dedicated ‘Austin Ambassadors’ can help us, by supporting in our capital source recruitment efforts and local education programs that will continue to build momentum and raise the profile of our most innovative and creative companies and successes nationally. Julie and I have exciting plans in store for 2016 and look forward to engaging the community in the coming months, starting with the Capital Roundtable on November 5th.