Welcome to the Texas Coalition for Capital's quarterly e-newsletter. We are a non-profit, statewide coalition of leaders supporting economic development and job creation through long-term access to capital for Texas entrepreneurs and emerging companies.

In each newsletter, we highlight Texas' dynamic investment infrastructure, recent investments, and the spectrum of funding sources available to our small businesses. Texans are innovators, and the infrastructure we are seeing come to fruition - connecting companies and capital - is no exception.

We are a resource for promising young companies, entrepreneurs, investors, economic developers, universities, and other stakeholders in the deal flow chain. The Texas Coalition for Capital hopes to work with you to keep Texas the most vibrant business climate in the country.

With best regards,

Craig Casselberry, President
Texas Coalition for Capital



Events

Texas Coalition for Capital Sponsored Event: The Central Texas Funding Symposium, April 21st in Austin, Texas

The Central Texas Entrepreneur Funding Symposium '10 is a one-day conference for entrepreneurs, business owners and investors to examine the funding climate in 2010 - what is getting funded and what investors are looking for. With widespread uncertainty, and with funding opportunities more difficult to come by, the need to make connections and get creative are even more crucial for starting and running a successful business.

The event designed to provide entrepreneurs with the information they need to adequately fund their businesses. From start-ups to established organizations looking for additional injections of capital, attendees will learn how to prepare their companies for funding, discover alternative sources of capital and hear from successful entrepreneurs.

The Funding Symposium will feature expert speakers from a broad range of organizations offering advice and tools to entrepreneurs. The agenda offers panel sessions, breakout sessions plus a keynote presentation.

Topics include:
The Ins & Outs of Term Sheets From Employee to Entrepreneur in 12 steps Web 2.0 Tactics Alternative Financing Market Validation

Keynote Speaker: Frank Peters, Founder of Plaid Brothers Software

For more information and to register click here.



Advisory Board

Chairman, Tom Kowalski
Texas Healthcare & Bioscience Institute
President, Craig Casselberry
Quorum Public Affairs
Dan Matheson
Matheson Law Partners
Jeff Clark
Tech America
Larry Peterson
Texas Lyceum
Pike Powers
Fulbright & Jaworski
Damon Rawie
Advantage Capital Partners
Steven Anderson
West Texas Coalition for Innovation Commercialization
James Arie, Ph.D.
University ot Texas Medical Branch-Galveston
Curt Bilby
Terapio LLC
Susan Davenport
Greater Austin Chamber of Commerce/Central Texas RCIC
Guy Diedrich
Texas A&M University
York Duncan
Texas Research Park Foundation
Michael Dwyer
Azaya Therapeutics Inc.
Sloan Foster
Digital Convergence Initiative
Eric Fox
Lockheed Martin
Fernando Gonzalez
Rio Grande Valley Regional CIC
Neal Iscoe, Ph.D.
University of Texas-Office of Technology Commercialization
Martin Lindenberg
AlphaDEV LLP
Mike Lockerd
North Texas Regional CIC
Andrew Nat
Texas Life Science Regional Center of Innovation
Beto Pallares
El Paso/Trans-Pecos Regional CIC
Jim Poage
Satai Network/South Texas Regional CIC
Brian Hermann
University of Texas Health Science Center San Antonio
Bob Prochnow
Gulf Coast Regional CIC
Terry Schpok
Akin Gump Strauss Hauer & Feld, LLP
Brent Sorrells
TECH Fort Worth
Dennis K. Stone, M.D.
University of Texas Southwestern Medical Center
Mark Ellison
Texas A&M University
Sara Patuel
The University of Texas/TechBA Program
Jacqueline Northcut
BioHouston

The Workforce: Where Will the New Jobs Come From?

By Barbara Kiviat,  TIME Magazine


Later this year, a marketing manager will sit down for his first day of work at HomeAway, a company that helps people rent their vacation homes online. In the firm's sleek Austin,
Texas, headquarters, a glass-wrapped building decorated with travel souvenirs, the marketer will flip on his computer and do his job - a job no one has done before. This, you see, will be a brand-new job, one of the most coveted commodities of economic recovery.

How this job will come to exist is at the heart of the most pressing problem in the economy today. Since the start of the recession in December 2007, the U.S. has shed 8.4 million more jobs than it has gained. The unemployment rate hovers near 10%, and broader measures of labor-market woes that include underutilized workers are as high as 16.8%. Go down the nation's list of economic problems - from mortgage defaults to state-budget shortfalls - and joblessness lurks in the background.


Even as other economic signals have started to turn positive, the jobs situation has remained bleak. In February, the economy lost a net 36,000 jobs, which is leagues better than the 726,000 lost in February a year earlier but points in the wrong direction all the same. Were the economy to magically start generating jobs at a healthy clip - say, 200,000 a month - it would still take 3½ years to return to where we were, never mind the jobs we need for new entrants to the workforce.

To read more click
  here

 

 

Start-Ups Chase Cash as Funds Trickle Back
By Conor Dougherty And Pui-Wing Tam, The Wall Street Journal


Starting a new business is easier than it was a year ago, but wealthy investors, venture-capital firms and banks are still trickling out money very selectively.

Bryan Cooley started Langlearner, an online language-learning tool, in October with $330,000 in start-up money, including $200,000 of his own cash and the rest from a partner. He has talked to several groups of angel investors-small ones that typically put small amounts into very young companies-but remains in limbo.

"They want a sure bet," says the 32-year-old Mr. Cooley, who worked at a defense-consulting concern before starting his company in St. Louis. "We're caught in the situation where we need the money to become profitable, but they want to see profitability."

Small businesses under the age of three are as much as 50% less likely to get a loan or line of credit than more established businesses that are similar in other respects, according to a recent survey of small-business credit conditions, which was undertaken to gauge the impact of the recession by the National Federation of Independent Business.

"They always have more trouble than mature businesses," says William Dennis, senior research fellow with the federation. "But that's pretty high."


To read more click here.

 

A Silver Lining for Small-Business Financing?
Experts say money may be coming back to the market but not at pre-downturn levels.

By Kimberlee Morrison, Entrepreneur.com

Small-business owners continue to ask the same question: When will the finance capital return to the market? Many entrepreneurs have seen their lines of credit reduced, while others have seen the credit dry up completely.

There do seem to be signs of hope yet; particularly for capital efficient startups that serve consumers--directly or through larger partners--says John Chait, partner at Dace Ventures, an early-stage investment firm.

He warns that the days of investing $12 million into building a startup brick-by-brick are over. Using infrastructure already created by larger companies, startups can get products and services to market quicker with considerably lower costs than before, Chait says.

This trend is being mirrored with bank loans as well. Glenn Gray, president of Sunwest Bank in Tustin, Calif. says that while the investment and underwriting environment may be improving, he hopes we never return to the loose lending standards that preceded the financial crisis.

"[Small businesses] should expect an environment similar to that of 10 years ago," Gray says adding that ultimately tighter risk management on the part of investors is good for business.

To read more click here.

 


Where to Get a Small-Business Loan
Despite a harsh lending climate, small-business owners have options when it comes to digging up cash.
From Karin Price Mueller, Entrepreneur.com


If you want to expand your business, you're going to need some cash.

Money still isn't falling off trees for small businesses, and the lending seas can be a challenge to navigate. Although you need funding, you want to make sure your deal is better than the one offered by the neighborhood loan shark.

Money might be available thanks to stimulus spending, but that doesn't mean it's easy to get.

Here are a few options:

Traditional bank loans
Your local bank can offer low interest rates and long repayment plans. Sounds good, but some entrepreneurs have found that stricter underwriting guidelines make it nearly impossible for these loans to be approved.

"The negative to a bank is that the loan can often be very hard or next to impossible to obtain,'' says Rick Kahler, a certified financial planner with Kahler Financial Group in Rapid City, S.D. "Also, most bank loans are 'recourse,' meaning if there is a default, the bank can go after your personal assets as well as any collateral secured by the loan.''

Every bank's lending requirements are different, so shop around. Start with your personal bank. If a banker knows you, he or she may offer additional help when you apply.

Government loans
Like traditional bank loans, loans with a government guarantee can be tough to get, and the process can be painstakingly long. It's not uncommon for potential borrowers to bail before the loan is approved.

If you can get a government loan, you'll find low interest rates and long repayment terms. Check the Small Business Administration website for more information...

To read more click here.

 

13 Seed Funding Options For Entrepreneurs

By Bernard Lunn, ReadWriteWeb.com

One of the most difficult parts of starting a startup for any entrepreneur is finding that small bit of seed capital to get things going. As evidenced by small seed funds like Y Combinator, a little can go a long way for startup entrepreneurs, but raising that chunk of change to get started can be tricky. Luckily, there are a number of different roads you can take to get from concept to Series A. Below is a list of 13 seed funding options for startup entrepreneurs.

This list is a mix of old, borrowed, new, and blue:

1. Bootstrap from revenues. You will exit for an EBITDA multiple. Forget about crazy high multiples unless you have that magic formula that really can create high growth + low costs on almost zero capital -- but if you really have that you won't need/want to exit. Don't worry about what anybody thinks other than users and customers. No, this does not have to mean enterprise products; consumer ad-supported works fine as well -- just ask the founder of Plenty Of Fish.

2. Self-fund on credit cards and a second mortgage. You are brave, maybe brilliant, and maybe stupid. Just don't expect any VC to give you more than words to recognize your courage. And also remember: it will take more capital than you think. Self-funding is not bootstrapping, it is just using your money and not somebody else's money.

3. Do consulting on the side to self-fund. This is less risky than using credit cards. One partner works for a Big Old Dinosaur on contract for $20k per month and splits it 50/50 with the other partner, who builds the company which is shared 50/50 between the two. It gets a little more complex with more than two people.

To read more click here.