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
Texas Coalition for Capital Sponsored Event: The Central Texas Funding Symposium, April 21st in Austin, Texas
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.
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.
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.
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 BoardChairman, Tom Kowalski
Texas Healthcare & Bioscience InstitutePresident, Craig Casselberry
Quorum Public AffairsDan Matheson
Matheson Law PartnersJeff Clark
Tech AmericaLarry Peterson
Texas LyceumPike Powers
Fulbright & JaworskiDamon Rawie
Advantage Capital PartnersSteven Anderson
West Texas Coalition for Innovation CommercializationJames Arie, Ph.D.
University ot Texas Medical Branch-GalvestonCurt Bilby
Terapio LLC Susan Davenport
Greater Austin Chamber of Commerce/Central Texas RCICGuy Diedrich
Texas A&M UniversityYork Duncan
Texas Research Park FoundationMichael Dwyer
Azaya Therapeutics Inc.Sloan Foster
Digital Convergence InitiativeEric Fox
Lockheed MartinFernando Gonzalez
Rio Grande Valley Regional CICNeal Iscoe, Ph.D.
University of Texas-Office of Technology CommercializationMartin Lindenberg
AlphaDEV LLPMike Lockerd
North Texas Regional CICAndrew Nat
Texas Life Science Regional Center of InnovationBeto Pallares
El Paso/Trans-Pecos Regional CICJim Poage
Satai Network/South Texas Regional CICBrian Hermann
University of Texas Health Science Center San AntonioBob Prochnow
Gulf Coast Regional CIC Terry Schpok
Akin Gump Strauss Hauer & Feld, LLPBrent 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
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The Workforce: Where Will the New Jobs Come From?
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
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
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.
By Conor Dougherty And Pui-Wing Tam, The Wall Street Journal
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
"They always have more trouble than mature businesses," says William
Dennis, senior research fellow with the federation. "But that's pretty
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.
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.
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.
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.
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
"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
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.
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.