My love letter (and goodbye?) to Austin

I’m not saying this to be provocative, but because it keeps me up at night.

[Disclaimer: Not everyone will take 10 or 15 minutes and read this (here’s an abbreviated story if you need one, and that’s OK. The audience for this post is actually quite small: the people who care about Austin’s tech community and one of its most promising startups. I share this for the sole purpose of continuing to be an open and honest advocate for Austin’s tech scene, particularly consumer startups, and diversity in tech, especially.]

After my family, friends and my startup, Localeur, I can say without any doubt whatsoever that I’m more attached to Austin than anything else.

How attached, you ask?

This tattoo is permanent, but I’m not sure if my status as an Austin resident is. This may be the scariest moment of my life and the life of my startup Localeur; a choice I’d rather not make.

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I was born in Temple, Texas, a small town about an hour north of Austin and grew up the youngest of three boys in a single-mother household. My dad left us as young kids and, if he has Internet access, is reading this from jail. I come from a good family that matches some of the unfortunate statistics in America. My childhood apartment was once robbed of bologna and cheese, no joke. Food stamps, free-and-reduced lunch and underfunded schools were my upbringing, but there was plenty of love and normal kid stuff, too.

Even during my years in grade school in South Carolina, I carried fond memories of Texas, and dreamed of possibly attending the University of Texas at Austin. I started my first business at 11 years old, cutting grass for neighbors, not because my mom pushed me into it or because I had early access to computers or because I was exposed to entrepreneurship, but because I couldn’t attend a $90 field trip with my 5th grade classmates and realized it wasn’t money holding me back, but access to opportunities.

In my last two years of high school in Killeen, Texas (we moved back), an Army town just north of Austin, I realized location plays a pretty big role in the kinds of opportunities we get access to in life. Driven to attend college, I served as the president of the Future Business Leaders of America, the youngest person on the county’s board of directors for March of Dimes, ran track and cross country, joined the speech team, worked 20-30 hours a week at Pizza Hut, was vice president of the math and science club, and spent many weekend nights driving an hour south to Austin to see groups like Outkast perform at the Austin Music Hall and experience Sixth Street with my self-made fake ID. In 2001 I reached my goal, earning two dozen academic scholarships to attend the University of Texas in Austin.

From there, with lots of hard work, persistence, hustle and tenacity, I made it through an underprivileged and fatherless upbringing to become the first person in my immediate family to graduate from college. Realizing college alone wasn’t enough access, I made use of my time in Austin by interning for the Texas Longhorns, Motorola (during its spinoff of Freescale) and Southwest Airlines’ corporate headquarters (in Dallas) along the way, and doing my best to understand the city and state away from campus.

Austin has such a special place in my heart. It’s my first love. By the time I graduated, at 22, I felt the world was my oyster and I moved to D.C. not because I fell out of love with Austin, but because I wanted to leave town to fall deeper in love with the city upon return. Four years later, I was back.

Simply put, Austin — either for college or as a 25-year-old — was the first real adult choice I made, and it’s been a phenomenal one for me throughout my personal and professional life. I have an amazing community and network here. I’ve built my personal brand here. I’ve been a finalist for the Austin Under 40 Awards multiple times and was named the Emerging Business Leader of the Year by the Greater Austin Black Chamber two years back.

I even published a book with a professor at UT-Austin, created and led part of the SXSW Festival experience, routinely speak at the McCombs School of Business, St. Edward’s University and other universities and K-12 schools here, and I’m a very proud board member for AIDS Services of Austin and KLRU-TV, the PBS affiliate behind legendary music show, Austin City Limits.

To add to that, my tech industry pedigree comes from this city so, of course, I want to grow my startup here and find ways to give back to the place that spawned me into tech. Working at Bazaarvoice before their IPO in 2012 as the director of operations then helping to shape the travel market strategy is one of the key professional experiences that prepared me to run a tech startup today. Today, I count Bazaarvoice’s founder and former CEO Brett Hurt, its former COO Heather Brunner (now CEO of WP Engine) and several other notable Austin business leaders like Clayton Christopher (Sweet Leaf Tea, Deep Eddy Vodka), Tyson Tuttle (Silicon Labs), Joe Ross (CS Identity, Grande Communications), Ken Cho (Spredfast, People Pattern), and several members of Central Texas Angel Network as investors in Localeur.

Truth be told, being in Austin, I’m probably the only Black tech startup founder/CEO 95 percent of the people I know have met. But, even still, I feel like it’s not so much a burden as an opportunity to show a city what is possible. The future will be different, and I want to play a role in proving that here. I want to add that I am eternally grateful to my co-founder Chase, the people on our founding team, our angel investors and our growing community for being on this journey with me and not running from a startup with a Black founder and CEO. Fact is, many investors avoid it. The odds are definitely stacked against us mirroring what I’ve experienced in life.

When I graduated from college, being a tech startup founder wasn’t really even on my radar, but owning a business someday was. I’d heard of Silicon Valley, but didn’t have any familiarity beyond knowing that’s where Apple and Google were based. The closest I’d gotten to meeting a business owner as a kid was going to church with my mom’s boss who franchised a dozen Pizza Huts in Upstate South Carolina. Austin is where I fell in love with tech.

In college, Facebook was still a very young company and I was one of the early users at the University of Texas. Fast-forward a decade and I’m the co-founder and CEO of Localeur, a community where locals share their favorite places to eat, drink and play, and some of our lead investors are current and former Facebook execs. Cool, right? Plus our startup fits the brand of Austin; we’re authentic, cool and curated, and Localeur’s brand and growth is powered by both locals in and travelers to the city, same as Austin.

[Note: My co-founder Chase White and I met at Bazaarvoice and he’s from San Antonio; our founding team members are from Austin and the Dallas area.]

Just before SXSW 2013, when Chase and I launched Localeur, I can truly say that the sky was blue and the grass was green for startups like us. Austin Ventures was still writing checks, Silverton Partners was more active in seed stage, and Central Texas Angel Network was the place startup founders in Austin went to get their first check. The path to startup glory seemed clear.

Two of our first 10 angel investors were CTAN members, others were established Austin tech veterans like Joe Ross and Matt Curtin and the other six are people I’ve known for years from previous professional experiences here in Austin. If you’d asked me three years ago when we launched if I’d ever think about moving away from Austin, I’d have replied “no” in less time than it takes for Kanye West to offend someone. Even when we had this rough experience with a partner at Austin Ventures we weren’t deterred.

Localeur has what may be the single best collection of Austin angel investors for a consumer startup here, not to mention the fact that our lead angel group includes Blake Chandlee, the VP of Global Partnerships for Facebook (based in Austin), Mike Murphy, the early revenue chief for Facebook (based in Silicon Valley), and Tom Arrix, former U.S. ad chief for Facebook (based in the NYC metro area). As you can tell, not all of our investors are here in Austin, but many of them are, and being based here has played a key role in our ability to maintain a focus on local while expanding to 20 total cities. When the three aforementioned guys invested in early 2015, it was the first time we’d ever had more than three months of runway; we made it count.

So, here we are, after hitting major milestone one after another including reaching 1 million users, growing our monthly user base nearly 1,500% last year, going from 51% mobile usage in 2014 to nearly 90% in 2015 and reducing our reliance on Austin (our first city) from 24% of our users in 2014 to less than 5% today, along with getting a first-of-its-kind national partnership with a major airline, being named the Best New Startup in Austin in 2013, being deemed a “top travel app” by The Today Show, Forbes, Time, Mashable and many others, and raising a total of $1.6 million in angel money from everyone from executives at Facebook and the founders and CEOs of Austin-based companies like Bazaarvoice and Silicon Labs to New York-based investors like Beyonce’s manager and a globe-trotting DJ, and I’m wondering if I may need to move to Silicon Valley.

Based on the public data and this insightful post (which has since been countered), none of the major Austin VC firms are extremely active in early-stage, non-rollup (e.g. HomeAway, RetailMeNot) consumer startups like Localeur. There’s a lot of talk about consumer marketplaces, but from my talks with several investors, what interest them most about these companies isn’t the pure consumer side and user growth but the B2B mechanics (a la Favor onboarding food trailers) and SaaS-like sales cycles (a la Aceable winning over state regulatory agencies). Despite this being an industry about first-movers and early adopters, investing in us or a Black founder is a move I’ve yet to meet the Austin VC willing to make. It’s not racial bias that I’m trying to touch on here, but fear of the unknown. That’s perhaps why I haven’t even been able to get a meeting with a partner at two local firms.

I suppose people don’t know what they don’t know, and even worse, they don’t believe what they haven’t seen. This is why I think so many of us are enamored with tech, right? Because it’s supposed to be an industry of folks who want to make the future look much better and different than the past and, often times, prove naysayers wrong? That’s why I’m here, too.

Over the last few months, I’ve also observed as Austin’s City Council is fighting the innovative, widely-supported business models of Uber and Lyft and even looking into forcing changes on homegrown startup-turned-$4 billion company HomeAway (which would also hinder Airbnb), and I wonder if the city itself isn’t nearly as disruptive and open-minded as you’d believe. In recent years, I’ve seen progressive and tech-friendly candidates like Andy Brown and Chris Riley defeated in local elections, and I’ve seen the overly-conservative, politically reactive neighborhood association-like leaders like Kathie Tovo and Ann Kitchen increase their influence in a city that considers itself weird. With local political headwinds like this, I’m not all too surprised the VC community in Austin is equally risk averse, too.

It was only after meeting with (or trying to meet) all of the Austin VC firms and being told we aren’t a fit for their B2B-focused portfolios or that we’d need to reach millions in ARR (even before the seed stage) before securing funds, we spent thousands of dollars and tapped my remaining savings over the past year taking trips to Silicon Valley and New York meeting with all the VC firms. An early-stage consumer startup with a Black CEO in Austin is a different kind of unicorn to most VCs from what I can gather.

So add all this background information into the context of 2016’s current venture fundraising landscape, and us being based in Austin may have become an even bigger hurdle for us to secure an out of town VC who is trying to buy time. So rather than securing a seed round late last year with several milestones eclipsed, I’ve recently had to consider a move to a place that seems a bit more eager to welcome us as an investment opportunity.

This isn’t me writing in anger like Talia or tweeting for funds from Mark Zuckerberg, mind you. I know fundraising is hard, I’ve done it three years. With all the Game of Thrones references I’m seeing used about the VC environment today a la “Winter is Coming” I feel like Localeur is the House of Stark these days, Jon Snow intact. Does it mean we’re dying? No; we’ve been alive three years and keep on getting better. It just means we’re like all consumer startups at seed-stage, from Airbnb to The Zebra, seeking VC support.

I had one Austin VC tell me that if his Silicon Valley VC buddy was interested in our deal, he’d be interested in it too. What?! I thought location was supposed to be a competitive advantage, yet the best startups in Austin often get funded by Silicon Valley VCs. Weird.

Similarly, forcing me to question the significance of location…I recently emailed a Black VC with a Silicon Valley firm to see if I could get on his private email list and his reply was, “We are keeping [private email list] to folks who live in the Bay Area or NY at the moment.” Well, that’s swell because being a Black tech founder needs a few more challenges. Turns out I have to move just to get a helpful email. Again, weird.

The fundraising environment today is not ideal. I’ve been forced to take the kind of draconian actions VCs have been advising for the last few months as a result. We took all the budget out of user acquisition to stay alive; if VCs don’t invest based on growth, I guess we’ll have to try another route. I cut our staff by 50 percent and reduced our burn rate by more than that. We’ve moved up our roadmap to focus more on monetization, and cut our first major revenue-generating deal with a major travel brand. We’re scrappy as hell, and it’s kind of reminding me of my childhood, which isn’t terrible. Thankfully, our startup, like my life, never included a silver spoon. We never got a million dollars pre-launch and never grew accustomed to a fancy office or exceptional employee benefits or a crazy advertising budget. But still…

So as the person most responsible for keeping us alive for three years and fundraising in order to take on well-funded competitors like Yelp and Foursquare and having help guide us through a number of meaningful milestones on angel investment fumes ( how’s this for a cockroach, Paul Graham?), was rejected by YCombinator (chronicled here), I’m feeling a bit constrained here in Austin.

After spending the last year or so and working tirelessly to build solid relationships with VCs on both coasts, the part that is the most tough to handle right now has little to do with momentum, the market or timing but realizing it quite possibly may be me being based in Austin (and Black, can’t forget) that could limit our potential from here even after being named one of the top pre-Series A startups in Austin and a top startup to watch.

If our being in Austin is what takes that Silicon Valley or New York venture capitalist from “leaning yes” (“love the concept”, “love your grit”, “really solid traction”) to “not right now” (“need more traction…sorry I can’t be more specific on the numbers”, “we’re just not hot on this space right now” and “it’s a bit early for us”), what does someone in my position do? Especially if the Austin VCs are waiting for signals from Silicon Valley VCs who are waiting for signals from Austin VCs who aren’t doing my deal?

Should we focus all our energy on revenue which is what Austin VCs prioritize due to the B2B-focused landscape, thus missing the thunderlizards Mike Maples writes about? Or should we follow the path of our competitors and focus on user growth like Silicon Valley early-stage consumer startups where massive exits are more familiar? Should we heed the advice of inexperienced VCs to focus on things that drive us toward a quick acquisition that provides minimal returns to both our investors and us founders and my early team members? With companies like Google and Foursquare emulating our approach, it’s clear we’re onto something big so is now really the time to start monetizing to or do we need to rapidly acquire new users? How much runway will it take to get our monetization chart to an investment-worthy level before fear of a tech bubble declines and everyone is focused on user growth and acquisition cost again? To be honest, these seem like tactical questions because the most strategic concern before me today is whether or not being in Austin is killing us slowly as the disinterest from local VCs may send poor signals beyond.

And I know I’m not alone as every tech founder/CEO from Jack Dorsey to the founders in YCombinator’s winter class right now are freaking out about today’s financial and fundraising environment, but the great majority of them don’t have to account for being in Austin or being a Black founder, which statistically makes early-stage startup funding more difficult to secure. And, as you may have figured, I can’t do anything about my skin color.

Interestingly enough, some of the rumblings I’m hearing about the Valley indicate there’s a lot more fear surrounding the financial landscape and threats of additional layoffs and bubbles there than you’d feel here in Austin, and many SF folks would love to live and work here. Maybe Localeur is a bit ahead of a larger trend that we’ll start to see soon? Tech sites may not report it, but many SF tech employees are looking for outs — through IPOs and acquisitions, perhaps to more affordable, ethnically and occupationally diverse cities with fewer pissing contests about startup valuations and genuine enhancement to quality of life away from the tech-bro workplaces.

So imagine reading one of those recent “winter is coming” blogs or tweets by influential VCs like Brad Feld, Fred Wilson or Mark Suster and realizing how much harder fundraising is in 2016 and being a Black founder in Austin while knowing that many of the folks in Silicon Valley want to leave?

This decision is made tougher when I look at the recent consumer startups that are venture-backed here— from Sparefoot to Favor — I realize I may never get funding even with so much evidence of traction and tenacity since I’m not a white or Asian male, not a serial tech entrepreneur, not the owner of an MBA from Stanford, not an engineer from Google and not a finance wonk from Wall Street who decided to get into tech later on. I write that not to take anything away from any those founders, but to say data worries me.

I guess what I’m trying to say is that if a well-known investor like Mike Maples wants Austin startup founders like me to make my startup legendary, how can I go about doing that if I’m not being supported by VCs in Austin?

I am trying to have zero blinders whatsoever; I fully understand that not all startups get venture funding. I also know I’m not the most experienced founder and Localeur isn’t generating the most revenue or app downloads, but the hurdles I’ve had to overcome personally to get here , plus the challenges Chase and I have had to face as first-time founders to get Localeur to this point (raising month to month) coupled with the strategic angel investor roster we’ve been able to build and the milestones we’ve been able reach make me certain that we’re one of the most promising consumer startups to come out of Austin in the seven years since I moved back here.

Personally speaking, I’ve invested my heart and soul, my time and energy, my love and passion, and Localeur has more than demonstrated there’s something there not just in our grit, determination and tenacity, but in the heaps of milestones we’ve hit often with less than a couple months of runway to merit more support from Austin’s venture community than we’ve received. My being Black, if anything, should be viewed as an opportunity worth pursuing more than a reason not to invest, but yet here I am laying it all out on Medium because that’s not what appears to be happening.

I love this city and I’m sure there aren’t many young, early-stage entrepreneurs who work harder to show their love of a city and community — not just the tech community, but Austin at large from a nonprofit (AIDS Services of Austin, KLRU) and civic standpoint (Austin Music Commission, Downtown Commission, etc.) And, truth be told, I’m near tears with the thought of being forced to leave to make sure Localeur reaches its potential. But don’t test me. I have a fiscal responsibility, and am not so entitled to minimize the respect, trust and confidence my angel investors have shown.

So if you think the answer is as simple as “move to Silicon Valley” let me know; though I’d much rather stay. I love Austin and want to build Localeur into a major force here. Our continued success is going to open up more avenues for VCs here to embrace more startups like us, not just consumer, but those with minority founders. Plus, knowing what the data shows about Black founders anywhere being able to secure VC money, is moving the answer? I guess I’ll find out soon enough. My apartment lease ends April 21, the day before my birthday, and Silicon Valley seems to be calling my name.

There’s a lot more than this Downtown Austin view that I’d be giving up by moving to California. Please share any constructive feedback in the comments.