It’s hard to get Jim Breyer to say a critical word, publicly, about anything, so it’s no surprise that, when asked why he moved to Austin from his longtime headquarters in Silicon Valley two years ago, he spends some time talking first about the Bay Area and its many advantages, including Stanford University and the numerous “intelligence platform companies” that he has backed over the years, including, famously Facebook.
“Austin will never have, in my humble view, the deep technology underpinnings of Silicon Valley. The most passionate entrepreneurs with deep tech continue to be in Silicon Valley,” says Breyer during a recent hour-long call.
Still, Breyer is clearly very happy with Austin, a city to which he traveled back and forth for years as a member on the board of Dell between 2009 and 2013 and during which time he says, he “just fell in love with the city” and to which he “thought there was a very high likelihood I would move at some point.”
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Indeed, he calls finally making that move, the planning of which he began before the pandemic took hold, “a wonderful decision.” Austin, he says, “almost more than any city in the country, encourages a culture of interdisciplinary collaboration,” meaning that unlike the Valley, which remains intensely tech heavy, Austin is home to many types of professionals, says Breyer. “It’s not just technologists, but artists, musicians, entrepreneurs, doctors, professors associated with the University of Texas. There is a collaborative spirit that I think is really unique.” Austin is also continuing to attract “young, brilliant entrepreneurs from around the country and in many cases from around the world” because of that mix of energy and expertise, he adds.
As for what Breyer finds most compelling about Austin from an investing standpoint, he notes the city’s strengths when it comes to fintech startups in particular, but says that his investment firm, Breyer Capital, has made 20 investments in both for-profit and nonprofit organizations altogether to date, and that these range from the job placement startup Workrise to the at-home lab testing outfit EverlyWell to ZenBusiness, which offers a business formation service specifically focusing on small business owners.
He also notes that Austin is home to a growing crypto scene, one that’s been fueled in part by Multicoin Capital, a thesis-driven investment firm that invests in cryptocurrencies, tokens and blockchain companies and which sprung up on the Texas scene five years ago. (As an early investor in Coinbase and Circle Financial through a firm Breyer is closely partnered with, IDG, he says he has been “very active” in backing crypto technologies.)
And Breyer notes that Austin is home to a wide number of startups that are focused on managing data, including spinouts from Dell. Indeed, one company he holds up as an example of a “company doing groundbreaking work in managing data for small, medium and large enterprises” is Data.World, which just this week announced $50 million in Series C funding led by Goldman Sachs Asset Management.
Not last, Breyer says the “intersection of computation and medicine” has long been, and remains, perhaps the biggest area of interest for him, and that there’s no shortage of interesting work coming out of the Austin region, including thanks to the now eight-year-old Dell Medical School, which is, by Breyer’s telling, “collaborating very deeply across the University of Texas campus.”
Of course, another reason that investors like Breyer have been heading to Austin in recent years owes not just to the usual aspects — lower expenses, politics, the fact that Texas doesn’t have a capital gains tax — but because it also remains relatively unchartered territory compared with Silicon Valley.
While a small number of venture firms ruled the roost for years, including LiveOak Venture Partners, Silverton Partners, and, earlier in time, Austin Ventures (a firm that disbanded in 2015), there are still few enough investors in Austin that most VCs there aren’t facing a lot of sharp elbows just yet.
Indeed, asked about what he is seeing in terms of potential syndicate partners, as well as rivals, Breyer says that he is “great friends” with many former partners of Austin Ventures, many of whom continue to make angel investments. He notes that firms like LiveOak and Capital Factory are “doing superb work” and that he has become friendly with Joe Lonsdale, whose firm 8VC also relocated to Austin in 2020.
He says he also finds that “though the community of venture capital is not necessarily extremely large, the entrepreneurs in many cases are very active as angel investors, so many of the investments that Breyer Capital has made are early-stage startups, with [the backing of] entrepreneurs. “In that sense,” he continues, “the community is really interesting because the entrepreneurs are backing other entrepreneurs.”
Breyer expects the area to have many more entrepreneurs soon, too. “I do see more [operators] deciding they’re interested in joining the Google or Facebook or Apple or Tesla offices in Austin, and these are the entrepreneurs of the future. When they start to hit their early 30s and want to do something on their own, that’s typically the kind of background that we love to intersect with.”
It is, he adds, “really exciting for Austin.”