Aug. 9, 2022

The Changing Austin Venture Scene with CS Freeland, Executive Director of the Austin Venture Association

Clearly the Austin entrepreneurial ecosystem has been growing dramatically for the last several years. And, with that growth has come a lot of new investors. Whether it be VCs building larger funds, entrepreneurs reinvesting earnings, incubators and angels willing to help startups, there are a lot of people getting involved.  Today we are talking with CS Freeland, co-founder and executive director of the Austin Venture Association (AVA). We cover why do we need an organization like AVA, the origin story, and the evolution of the venture environment here in Austin.

Capital that is leveling up raises...What's next Austin.

Podcast Production Services by EveryWord Media

Our music is “Tech Talk” by Kevin MacLeod. Licensed under Creative Commons 4.0 License


Notable Links:

Episode Highlights Links:

  • The Austin Venture Association is a 501c3 nonprofit focused on bringing the local startup investor community together. While it's primarily venture capitalists, it's also incubators accelerators, family offices, and growth private equity.
  • While surfing the ebbs of the pandemic, CS saw that there was no single organization that helped unify the venture community in town.
  • The Austin venture scene has quadrupled since the start of the pandemic growing from 20 to 80 firms.
  • While today the AVA has been very event focused, they see the next step in their evolution to being a professional development organization
  • The first step in this evolution is the launching of Venture Fest October 4-6
  • What’s next Austin is already happening
Transcript

Michael Scharf: Austin is the new innovation powerhouse, not the next Silicon valley, but the first Austin, we are adapting to the future in real time.

Jason Scharf: I'm Jason Scharf a biotech executive, and early stage investor.

Michael Scharf: And I'm Michael Scharf advisor and board member for multiple private companies.

Jason Scharf: You can call us optimist abundance minded up wing, and even solutionists we see a bright future ahead that can be achieved through innovation and entrepreneurship.

Michael Scharf: In this podcast, we explore Austin superpowers, the people and companies driving our growth and the macro, and microtrends that come together to create Austin today.

Jason Scharf: This is Austin next.

Clearly the Austin entrepreneur ecosystem has been growing dramatically for the last several years. And with that growth has come a lot of new investors, whether it be VC's building ever larger funds, entrepreneurs that are reinvesting earnings from their success, incubators and angels willing to help startups.

There are a lot of people getting involved, but it's not just more money. That's needed. It's a leveling up of these investors in the community becoming more experienced and able to provide, not just capital, but knowledge and experience. And that's where the new Austin venture Association began. We're talking with CS Freeland, the co-founder and executive director of the AVA which is helping to amplify connect and organize the local venture community.

She's a multidisciplinary entrepreneur. Who's lived in Austin for over 12 years. In 2018, CS was tapped to create Austin's mayor Steve Adler and Fort Worth's mayor Betsy Price's successful reelection campaigns that ended up winning multiple awards in new digital strategy. She's also spent seven years at a venture studio launching early concepts and helping to grow the portfolio of startups.

CS has enjoyed speaking at universities most recently in Davos during the world economic forum and other conferences on the topics of entrepreneurship, new leadership, future in venture and government innovation.

CS. Welcome to Austin next.

CS Freeland: Yeah. Thanks for having me. This is fun.

Jason Scharf: So let's start big picture in the beginning. What is the Austin venture Association?

CS Freeland: Well, the Austin venture association is a 5 0 1 C three nonprofit, and we're mostly focused on getting the local startup investor community together. So while it's mostly venture capitalists, it's also incubators accelerators, family office, growth, private equity, all the way up, and it's really getting the community together.

And it's a fast growing one as well. So. Fun times to be building something like this. Well, it's still early days.

Jason Scharf: Walk me through the origin story. How did this all get started? What was the impetus for it?

CS Freeland: So we were kind of talking about there's like co-living situation. I was living downtown at the AMLI on second and I had like, just been furloughed, you know, during the pandemic, the onset in March, 2020.

And one of my mentors, she owned the boutique hotel. It's called Adina A D I N A. And so it's this really great kind of luxury boutique hotel, a couple blocks west of the capital building. She was just super devastated that when she was trying to launch in time for south by Southwest. obviously we know that that didn't go very well.

And so I pitched her an idea. I was like, Hey, if you let me and my startup friends and startup investor come in and and, and live and work in the hotel, like we can you know, you, you can basically get like any type of revenue. And if you give us a good deal, then we could just, you know, have some fun with it and, you know, kind of surf the pandemic kind of situation.

Obviously we didn't know how long pandemic was gonna last for, but yeah, I legit lived in this like nice hotel for the majority of 2020, and I know it sounds kind of bougie or whatever, but I've always wanted to do that. suddenly found myself in the, in the weird weirdest world during pandemic and kind of living out my dreams with a lot of friends too.

So while it first started as a local thing, just a bunch of Austin entrepreneurs and, and business folks, it was really starting around February 2021. Early into the summer where I was like, wow, there's kind of a lot of new people coming to Austin and more focused in, you know, startup and startup and investments.

And it was less like we kind of disperse. I, I told some folks from we, we called that concept founder house so we come to disperse. I was like, look guys, I think it's a good time for us to get into a long term, lease as much as possible. Get a good deal. But the new folks that were coming in wanted something still like very short term, like couple months.

Then maybe they would go to Miami. Maybe they would go buy a house or something like that. But yeah, I just spent so much time connecting people into the startup community and venture community. And I was like, wow, I should really just tech myself out or something. Follow it, a membership club. And we didn't have any one organization that helped to organize the venture community in town.

So that's sort of the founding story of the Austin venture association. And, you know, it's kind of crazy. Like Miami has like a nonprofit, you know, venture association, Denver and like all the other up and coming pandemic, you know, quote unquote pandemic cities. Yeah. Just a really great time to be building something like this and looking back.

Yeah, my intuition was right. I had some folks tell me. CS,. We like your idea, but I don't know if we really need a venture association or a venture club. We already kind of know each other and we do deals with each other. And do we need to be like that close with each other? Like, I don't know. it's probably like good.

And I was like, wow, that's so, so surprising. Like, that's not what I'm seeing. I just have been meeting so many new people. I was like, wow. I feel like I could still like, literally start a club for new people to get to know each other. and yeah, the venture scene in Austin has more than quadrupled. We maybe almost had 20 venture firms that considered Austin has their headquarters.

And seen that numbers closer to like over 80 now, you know, as an entrepreneur, I just feel like, people who are moving here now are early, or what's about to be the biggest boom town we've ever seen it. You know, internet plus pandemic, where do people wanna

live? It's a handful of cities and we're lucky. Just, I'm very lucky too personally, just to been here.

Jason Scharf: So one of the, this kind of the newcomers versus the, I don't wanna say old guard, but you know, the established players that are here, are you seeing a lot of integration? I mean, obviously one of the worst case scenarios is you have kind of two different worlds.

And you talked about AVA being, you know, at least for starting for newcomers, but. How, how are you seeing that integration between kind of the established players and the new ones coming in? Either whether they're small or large?

CS Freeland: Yeah. I don't know if I'm seeing a lot of that. I think that if you're at the heads of these firms, there's like a warm intro.

Yeah. Like dinner parties are happening. There's you know, more intimate like meetings, but it's not. I haven't really seen that. Which is the opportunity for something like AVA to come along. And I think this is good, you know, if we wanna have really great investors still definitely take up the opportunity to be known and, and meet others that can send them interesting founders.

So, I mean, if you're really a great investor, you'll be known and and you'll be still networking and you'll still be growing and. Looking forward to that, more of that.

Jason Scharf: So then what are, would you say are the overarching goals for AVA?

CS Freeland: You know, it's really crazy because we real, we mostly formed because even six months ago, having in person events was a thing.

That's something that we all wanted really leading with where, where we stand in the community is kind of going a little bit higher end and like invite only curated guest lists and curated experiences. So, yeah, it's focused on events right now, basically one event every quarter and making sure that that's a really great experience and maybe there are experiences that you can't really get in Austin any other way.

There's a lot of like dinner parties. There's a lot of like coffee meet and greets and happy hours, like show up to a bar. But really we're having a lot of fun with it, you know, having. Some curated experiences because I mean, look, when people come here, they, they wanna get to know other people too, but they wanna get to know Austin as well.

So that's something that we're focused on. And then really looking to introduce memberships too, this whole time we've been focused on events, but really launching a membership model would just make a lot of sense for a professional development organization. Getting more serious on that. And we've got a portal up and coming.

One thing I'm really excited to talk about is we'll be having some more serious programming. I think that the parties are great, you know, they're, they're really nice and the community definitely wanted something like that. But I think that venture building will be very different over the next couple of months and on into the next year.

So getting the community together around panels and workshops, how can we help the startup founders whether that's extend the runway, just getting smarter on how they're spending money and the partners that they work with is really gonna be something really important. So we're having what was going to be like a venture day, like one day full of programming, focused on venture building and better investors.

And then one of our sponsors was like, well, we have folks flying in. Why don't we do a happy hour the night before, you know, if you're in town by then and another sponsor was like, well, why don't we have a, a brunch the next day, you know, after the panels and it's gonna be like female founders,

Jason Scharf: it keeps getting bigger and bigger.

CS Freeland: Yeah. Like one big brunch and like we'll have food catered. And yeah, I was like, wow, end up being more of a venture week. And as you know, like in Austin, there's already so many events, like how do we plan and carve out like our own days? Because then we got like ACL coming up and then there's like, formula one.

And then there's like startup week and all this stuff. So I'm like, well, we'll just lean into it and call it like Venture Fest. And if you wanna stay for the weekend, there's really great ACL lineup coming up. Yeah, I'm really excited about that. Having a venture week and have been working with a bunch of venture capital firms downtown bringing together like a venture crawl.

So, you know, kind of the barhop experience, but with venture capital firms all within like a six or seven block radius in downtown. And we really have a lot of fun with that.

Michael Scharf: So let us give you a chance to, to do a promo. When is this going to happen? .

CS Freeland: Yeah. Yeah, it'll be the first week of October. So I think the dates are that week be October 4th, fifth and sixth.

Michael Scharf: That's great. Let me ask you a question. You've you you've talked about two different groups. You've got one group, which is the investors, everything from the angels through the VCs. And then you talk about the startup companies, the founders, and the entrepreneurs, which do you really see as AVA's target audience or are you trying to serve both.

CS Freeland: Yeah, target audience is mostly VCs, but you know, of course, and, and I'm a founder and entrepreneur myself. So of course we'll be sneaking in some of the more venture backed companies that have a very different set of challenges that founders in the earliest stages, you know, with just an idea and all that stuff, they just have very different problems.

Jason Scharf: What are you seeing in the Austin innovation ecosystem that was really lacking and that for the needs for AVA to come into fruition? Right. What, what was the, what does it say about the, the ecosystem that we needed a group such as this?

CS Freeland: Mm. What, what would I call it? Like a, can do attitude. Like, what do we need?

People who really wanna go do something like solve it with some ingenuity. Like don't not being complacent. I feel like we love to talk about how awesome Austin is. You know, a lot of times like, wow, what a great city. And it's obviously an attractive one and attracts a lot of people, but really it's like, I.

I was very happy in life. Like I didn't have to start an Austin venture association. I actually sat on the idea for months. I'm like, man really is no one gonna do anything about this. Like, we are in a very different time in our lives. We've never had. A world like this before. And it's like to me, one of the best times to be built in because everyone just sitting around and waiting , you know, and this goes all the way up too.

It's not just on a founder level. Everyone's just like waiting to see what's gonna happen. People waiting to IPO. They're gonna see what the IPO market's gonna be like, people just wait. So yeah, maybe there's some of that or a lot more of that in Austin, but. People always say that about Austin too. Like, do we have like the biggest thinkers here?

Do we have the most creative minds of people doing stuff? That's like, that is the issue that's what's not being done. So I think that's gonna change, you know, obviously it's changing or like the onset of pandemic. There was entrepreneurs who started quickly building. They were like running. It's gonna be good, you know, , it's gonna be fine.

I like thinking about the challenges and like, what is Austin not doing, but I'm, I'm very, I'm feeling very positive about it.

Michael Scharf: Well, let's pick up right there on what you were talking about. As far as the challenges, what is Austin not doing and where do we need to go? As far as funding and, and entrepreneurship.

CS Freeland: I think it would be that the, again, the change in mentality, like if we see entrepreneurs working on something, their community really needs to get together and support them as much as possible. People kind of just wait around and I even see people just waiting around to see how an entrepreneur's gonna do.

Like, I know that that is kind of just the general sense. That's how entrepreneurship is. Like, they're doing something a little bit different and unique, but if you wanna foster really great community, We gotta help. 'em like help them make connections, cut a check, you know, sit on their board, do as much as possible.

There's like very actionable things to, to be done. So that's, that's what I would say.

Michael Scharf: We have so many things going on here. I mean, clearly the changes that are coming to Austin, just in terms of the chip and semiconductor sector have been incredible just since the, the short time that, that we've been.

But obviously Tesla's here and we have other EV manufacturers. What do you see in terms of how this is going to impact? Funding. Are we looking at just much bigger, much more funded companies coming here and taking advantage of this great place? Or are we seeing a, a growth in the entrepreneurial side as well?

CS Freeland: Yeah, I feel like we're really lucky that if we, if you're lucky enough to be working remote or even in cases like Tesla, where you're not working remote no matter what businesses are coming here and they will stay here and it's. and important to note the mentality of people who are coming here, they're picking a, a city because it's business friendly.

And I think that the, you know, entrepreneurial mindset will accentuate more in the future as well. And it will get, we're gonna get more competitive, will be a, a true force. We always get a question like, oh, is Austin gonna be like, the next Silicon valley is the next like, type of whatever. Austin will be the.

Like really incredible city, a city that like, we have never known before it's internet plus pandemic, you know, and yeah, you can get on a paddleboard too and have a really great life.

Michael Scharf: yeah, we've talked about it. We've always talked about it, not being the next Silicon valley, but rather the first Austin. it is just so different.

CS Freeland: It blows my mind. It absolutely blows my mind. Like Silicon valley, you had to be there. Like you could just, you could be in Austin because you like wanna have a really great life. , you know, the food and culture, but food is a big part of culture here, but it's like the lifestyle. We have never known a world like that ever.

None of us. So I'm very, very excited about it.

Michael Scharf: Well, we're two years plus since the lockdowns in the beginning of the pandemic, where do we have to go to be where the puck is going, as opposed to where the puck is? What's the next innovation

CS Freeland: what's next? it's just here. Where do we have to be? Man? We're so lucky.

We are, a lot of us are all ready here and it's almost like I meet people who are like a couple weeks here in town. I've also met people who have been like 30 plus years, or they're just in Austinite. Their entire lives. So where do we need to be? We, we need to be right here. And even the mentality is getting there too.

I would say last summer was still. Still kind of like old Austin mentality, old, like kind of like before pandemic anywhere now, I think the people that are really gonna be leaders will rise to the top are people who are very action oriented. They're gonna try a lot of different things. Those type of people that look like entrepreneurs, that would be an entrepreneur

And what I'm really excited about when I'm seeing it. I don't feel like that's usually talked about a lot. is that we have to empower women. We need to have a diverse, you know, set of leadership, diverse set of experience. Right now you could look at, you know, a networking room and like startups or venture.

And right now you see mostly like certain demographics. We all know we're, you know, we know that's like a, just like a tired. Story, you know, it's just what we're experiencing right now, but what's next is like, I'm not really concerned about like the future of things, the people that I work with. If they're at the heads of the organization, the venture capitals that GPs they're at the top or people in the middle, people like just anyone, I'm just very excited.

The future is looking very differently. I'm not concerned about it. I see, I work I work with some killer people and they look and think very, very differently. And so I'm really excited about it. And that will be just the next couple of years too. There are some very killer people that I've been lucky to work with.

Michael Scharf: Yeah. And that's, that's one of the things that we've always seen in terms of the innovation structure to make it really sustainable. You end up having to talk about how do we, I'm gonna use the word recycling. It's not a great word for this, but how do we move people from being gee? They're the number three person at X company.

And it goes well, and they have their liquidity event. How do we get not only the talent that's we've created, but the funding is well to be cycled back into the economy, to the next set of entrepreneurs and the next set of businesses. Because once you have that cycle, then it's much more of a sustainable kind of situation.

How do we help 'em do that?

CS Freeland: I think that, yeah, we can, we can help people. We can have like programming, we can have communities form like the Austin venture association to help people get to the next level. But I think that in general, people have come to this conclusion that being an entrepreneur really might save you.

I mean, look at all the layoffs happening right now. I mean, I think that it is, it's a lot of right sizing. It's just kind of really crazy even a couple months ago, just like valuations. Expectations. I know I was at some of these parties. You would hear about these companies and be like, what in the world?

But, so there's a lot of rightsizing going on, but then people are like, no, I kind of need to be my own boss. You know, I kind of want my own schedule. I kind of wanna do my own business. So yeah, I think that's what we're gonna see. How do we get those people to be even more entrepreneurial? My answer is they were kind of forced to, they just had no other choice too, whether that's quality of life, whether that's the city or state that you're in. And people are very resilient too. The people who are the next leaders have already started their path and we will be living in, in a very different world.

And I'm so excited for them.

Michael Scharf: Life is not perfect. We always have challenges. What do you see the biggest challenges here in. when we talked about infrastructure, we've talked about water, we've talked about talent. What do you see as the biggest challenges we face?

CS Freeland: No matter what I would say in a broad sense, you know, for, for Austin or for Texas in general, but even personally, too, the biggest challenge is the mindset.

I always believe, like, no matter if you think that you can, or you think that you can't, you are right. You're right. So to solve a problem, no matter what problem that is with the level of ingenuity and creativity and fire power, you will go very, very far. And the people that are coming to Austin, the people who are like taking leadership positions in this city and like doing something, whether that's some politics or entrepreneurship for anything, that's really gonna be.

So, yeah, very excited, very grateful too, to just be here. And in this position, I get to see a lot of people working on stuff that's really gonna create a better future for us. So to be the most supportive and get the community around that, it's just gonna be really important.

Michael Scharf: Well, we always end the podcast where there's signature question. CS What's next Austin.

CS Freeland: What's next is already happening. You know, I think I kind of stated it earlier. In the interview, but people are working on really interesting stuff right now. And I feel very lucky to be in a capacity where I see this at an insane level, this sheer velocity. So what's next, it's already happening. And I'm very excited.

Michael Scharf: CS freeland, founder of the Austin venture Association thank you so much for being on the Austin next podcast.

CS Freeland: Thanks. Thanks for having me all.

Jason Scharf: So what's next Austin. We're glad you've joined us on this journey. Please subscribe at your favorite podcast catcher. Leave us a review and let your colleagues know about us.

This will help us grow the podcast and continue bringing you unique interviews and insights. Thanks again for listening and see you soon.