It’s not what Austin is lacking, it’s what is special about Silicon Valley

The conversations about funding sound the same in almost every other city.

Lots of great insights here. I’ll be very sorry if we lose you joahspearman and not just because of your regular contributions to AustinStartup.com! You are exactly the kind of mold-breaker that Austin needs.

I don’t think is a racial issue — because you are a very impressive founder and honestly I think it’s positive in your favor rather than the opposite. Most investors I know would be more inclined to back diverse founders because they actually value diversity and have a conscious effort around it. I certainly see it as plus, not a minus.

I also don’t think this is an Austin problem. Honestly, I think you’d have the same funding issues with this kind of business model in just about any city that’s not Silicon Valley (maybe you could fund it in NYC or internationally). This is what is so special about Silicon Valley — they have the appetite and experience for the greater risk associated with B2C / Advertising based business models.

Austin has never had a big B2C / Advertising based success story and so naturally both entrepreneurs and investors are more cautious about these businesses. If you’ve never seen something happen to someone you know, human nature is to think it will never happen. Funny thing is, once it happens just once then everyone wants to get in on it and try to do it again. Hopefully Localeur can be the first Austin breakout that opens up that door. But it’s not something unique to Austin at all.

I’ve traveled around the world visiting startup cities in China, Ireland, Chile, Singapore, Malaysia, Thailand, England and all around the U.S. in Houston, Dallas, Boulder, Washington, Chicago, Madison, etc. It’s like a broken record. Everyone thinks their city is unique but honestly the convesations about funding all sound exactly the same.

Funding B2C startups with an Advertising based business model is hard everywhere. I doubt it’s “easy” in Silicon Valley, but that may be the only place where investors have the experience and appetite.

This is not systemic of other types of businesses. A B2C startup with a strong initial revenue model won’t have trouble raising money in Austin, and neither will B2B companies with SaaS models. B2C companies who can crowdfund on Kickstarter or Indigogo also seem to be able to get funded. It’s the pure consumer stuff that’s hard here, and just about everywhere.

Whatever you decide Joah, I’ve got your back and I think Austin does too.