It’s hard to get Jim Breyer likes to have a critical word publicly about anything, so when asked why he moved to Austin from his longtime headquarters in Silicon Valley two years ago, it’s not surprising that he spends some time, first across the Bay Area and its many assets to speak of, including Stanford University and the numerous “intelligence platform companies” he has endorsed over the years, including the famous Facebook.
“Austin will never, in my humble view, have the deep technological underpinnings of Silicon Valley. The most passionate deep tech entrepreneurs remain in Silicon Valley,” Breyer said during a recent hour-long phone call.
Still, Breyer is obviously very comfortable with Austin, a city he traveled back and forth to for years between 2009 and 2013 as a member of Dell’s board of directors, during which he says he “just fell in love with the city” and the he “thought that there was a very high probability that I would switch at some point”.
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In fact, he calls it “a wonderful decision” to finally take this step, which he began planning before the pandemic hit. Austin, he says, “nearly more than any other city in the country fosters a culture of interdisciplinary collaboration,” meaning Austin is home to many types of professionals, unlike the Valley, which remains very tech-heavy, says Breyer. “It’s not just technologists, it’s artists, musicians, entrepreneurs, doctors, professors associated with the University of Texas. There’s a collaborative spirit that I think is really unique.” Austin continues to attract “young, brilliant entrepreneurs from across the country and in many cases from around the world,” he adds, because of this mix of energy and expertise.
What Breyer finds most compelling about Austin from an investment perspective is noting that the city is particularly strong in fintech startups, but says his investment firm Breyer Capital has made 20 investments in both for-profit and nonprofit organizations. For-profit organizations overall to date, and that these range from job-matching startup Workrise to at-home testing lab EverlyWell to ZenBusiness, which offers a business incorporation service aimed specifically at small business owners.
He also notes that Austin is home to a burgeoning crypto scene, fueled in part by Multicoin Capital, a thesis-driven investment firm investing in cryptocurrencies, tokens, and blockchain companies that emerged in the fifth Texas scene ago years. (An early investor in Coinbase and Circle Financial through a firm Breyer works closely with, IDG, he says he’s been “very active” in supporting crypto.)
And Breyer notes that Austin is home to a large number of startups focused on managing data, including spinouts from Dell. In fact, one company he cites as an example of a “company pioneering the management of data for small, medium and large businesses” is Data.World, which raised $50 in Series C funding just this week million dollars led by Goldman Sachs Asset has announced management.
Last but not least, Breyer says that the “intersection of computer science and medicine” has long been perhaps his greatest area of interest and that there is no shortage of interesting work from the Austin area, thanks in part to the now eight-year-old Dell Medical School, which , as Breyer puts it, “collaborates very closely across the entire campus of the University of Texas”.
Of course, another reason investors like Breyer have flocked to Austin in recent years isn’t just for the usual reasons — lower spending, politics, the fact that Texas doesn’t have a capital gains tax — but also because it’s still relatively unknown Territory compared to Silicon Valley.
While a small number of venture firms have dominated the neighborhood for years, including LiveOak Venture Partners and formerly Austin Ventures (a firm that disbanded in 2015), Austin still has so few investors that most VCs there don’t face many sharp elbows just barely.
When asked what he sees in terms of potential syndicate partners and competitors, Breyer says he has “great friends” with many former Austin Ventures partners, many of whom continue to make angel investments. He notes that companies like LiveOak and Capital Factory “do an amazing job” and that he’s become friends with Joe Lonsdale, whose company 8VC also relocated to Austin in 2020.
He also says that “although the venture capital community isn’t necessarily very large, in many cases the entrepreneurs are very active as angel investors, so many of the investments that Breyer Capital has made are early-stage start-ups, with [the backing of] entrepreneur. “In that sense,” he continues, “the community is really interesting because the entrepreneurs are supporting other entrepreneurs.”
Breyer expects there will soon be many other entrepreneurs in the area as well. “I see more [operators] decide they are interested in joining the Austin offices of Google, Facebook, Apple or Tesla, and these are the entrepreneurs of the future. When they start getting into their early 30s and want to do something of their own, that’s usually the kind of background we like to intersect with.”
It’s, he adds, “really exciting for Austin.”