Investment

Texas venture boom increasingly fuelled by local family offices

A growing ecosystem of venture and local family offices in Texas is fueling the current tech boom in the Lone Star state, with more family/principal capital likely to gravitate to the state in the years ahead. 

Texas is now one of the top venture growth areas in the US, with $1.5 billion raised for venture groups in the first quarter of 2021 on top of strong growth in the last two years. Much of the growth is centred on the state capital, Austin, which is becoming a top tier global venture hotspot.

Low state taxes, attractive living costs, and lifestyle reasons are all making Texas a more appealing centre for business in general, and specifically startups and venture funds. As the state moves from its famed fossil fuel focus towards clean energy, the venture world is latching on to local alternative energy startups. But biotech, fintech, and proptech are also popular venture growth sectors in Texas.

Of course, a lot of institutional money is driving the boom, but increasingly capital from local family/principal offices is playing a role. 

Holt Ventures, owned by members of the Holt family, who invented the famous Caterpillar tractors and still own the dealerships for the brand in Texas, is one of the most active in local venture. Based in San Antonio, Holt Ventures recently backed Austin edtech group Interplay Learning in a Series B round, after providing startup capital in 2019. Holt has backed a number of other venture groups in Texas. 

Darren Blanton’s Dallas-based Colt Ventures has also been a big source of capital for the local tech world. Last year, Colt led a $27 million investment into Dallas-based ReCode Therapeutics.

Dallas-based Green Park & Golf Ventures, which has raised a fund in the past, but pretty much acts as a principal investment office of founder Carl Soderstrom, has been one of the most active local venture investors. It has backed many Dallas-based tech groups, as well as inter-state startups.  

Tichenor Ventures, owned by McHenry ‘Mac’ Tichenor, Jr. and based in Dallas, has also been a local supporter of mainly biotech startups. 

Billionaire and owner of the basketball team Dallas Mavericks Mark Cuban’s Radical Investments is based in Dallas. Although his investment office mostly does deals outside of Texas, the growing local tech sector could see more of his money staying closer to home. 

No doubt Austin-based Mithril Capital Management will also be looking more locally when it comes to investing. The fund/principal investment group backed by tech multi-billionaire Peter Thiel is looking to play a bigger role in the local tech scene since it relocated to the Texas capital from San Francisco a few years ago.  

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