In partnership with the fearless Irina Litchfield, speaker, author, and community leader, and the BitAngels team, we launched the first Austin-based BitAngels Network and Incubator last month. For those unfamiliar or new to this ecosystem, BitAngels is the brainchild of industry leader Michael Terpin, CEO of TransformPR, a leading high-tech PR and online marketing firm.
Essentially, BitAngels is an OG group of cryptocurrency investors and mentors that launched in 2013. Terpin, and other thought-leaders, united a posse of angel investors eager to help entrepreneurs transform Bitcoin and blockchain side projects into full-time jobs. In a short time, BitAngels pooled $6.7 million in Bitcoin to invest in $20k chunks. A second (and equally important) part of BitAngels Network’s initiative has always been geared toward growing the blockchain ecosystem through leveraging incubation strategies, community events, mentorship, local network development that serve entrepreneurs and investors, and company spotlights.
When we were approached to help launch a new BitAngels hub in Austin, we immediately jumped at the chance. We are based in Austin, Texas and Matt McKibbin was an original member of the first BitAngels Network, attending dozens of events over the years.
Our first chapter launch was a hit, and we learned quite a bit. Here are the primary takeaways from that event and what we discovered about the evolving blockchain entrepreneurial landscape.
Coming out of crypto winter, the ecosystem is booming with a new level of sophistication.
Five companies pitched at the first Austin event this May. We’ve seen hundreds of company pitches since entering this ecosystem as early as 2013. Between 2014 and 2016, a legitimate complaint from many investors revolved around the fact that while many companies were engaging in groundbreaking projects, their ability to model a profitable business was lacking. This was no fault of the technologists, just a simple reality of building something that is highly-technical and easily misunderstood.
Often, the technologists have the savvy to build revolutionary systems and protocols, but not necessarily the business skill to demonstrate and communicate profitability.
That is changing, and BitAngels hopes to help. There are now players in the ecosystem with much-needed experience, and the approach many native development teams now take toward communicating with investors has evolved beyond passion, vision, dreams, and hype. Viability matters.
The attention to detail given to outlining development roadmaps and milestones, sustainable revenue models, and exit strategies indicate that blockchain companies are leveling-up their business savvy, and fast. A new foundation has emerged. Focus is less on leveraging highly-speculative boom periods where the hype is more prominent, and more on building lasting impact. We believe these trends bode well for the teams that have done their legwork, and understand they’re speaking to more sophisticated investors, too.
The investor networks flooding into a more-mature market have extensive, diverse experience and expectations for substantive results.
In 2013, the “blockchain industry” was no industry at all. Cryptocurrency alone was still a radical notion and considered to be a minimal threat by legacy institutions. While a contingent of savvy investors (BitAngels, for instance) saw the promise of blockchain, billions in potential capital seemed to remain skeptical. After interest peaked during the 2017 ICO craze, VC and angel investors seemed to take the long bear market crypto-winter as a sign to pause. Capital shriveled up, but projects kept developing and innovators continued to refine their ideas.
As 2019 has seen large gains in crypto markets once again and the startups in the space are more worthy of investment, capital is coming back with renewed interest.
The recent Austin BitAngels launch and our subsequent communication with those looking to attend June’s event prove that venture capitalists and angels are still in love with this emerging market. Many, having survived or sat on the sidelines of the 2016–2018 boom and bust, are ready to invest in the industry. For those that have been investing since 2013, they now approach companies developing blockchain technologies with a well-earned experience and a healthy skepticism built from the scars suffered during the 2018 bear market.
The bottom line, capital both new and old is coming back and there is an ecosystem of far more mature companies ready to receive them.
Austin’s tech industry is booming as much as the city itself.
In recent years, thousands of tech-focused companies, from small startups to major players — like Apple, Facebook, Oracle, and Google — have either relocated their headquarters or established a significant presence in Austin. This is nothing new to Austinites. Dell’s campus has been in Austin for decades, and Round Rock has always been known as the “tech epicenter” of the city. But Austin’s growing entrepreneurial community is pushing the city towards becoming a major national hub, some even go so far as to call it “the next Silicon Valley.”
Inside the technology industry specifically, Austin-Round Rock is the #4 city for new job postings. Many of these are startups. As reported by SFGate, Austin has “105.2 startups per 1,000 residents, according to the Kauffman Index of Startup Activity, compared to San Francisco’s 82.7 per 1,000 residents. In 2016 alone, Austin businesses garnered $590.4 million in venture capital.“ These trends are indicative of the boom many say shaped Silicon Valley’s earliest years.
As our BitAngels Austin partner, Irina Litchfield said, “Austin is the headquarters of the state, and has become the tech epicenter. Our goal is to expand the BitAngels mission beyond just connecting the amazing talent and technology to the money that may be elsewhere but to also build a thriving community and incubator that nurtures talent. Austin as the hub for this network just made perfect sense.”
Just after our first event, what we learned, creatively, is that the days of pay-to-play pitch competitions and hype communication have dwindled. People want to stay and connect at these events, not just rush off to set-up meetings with investors or use the event time to sway investors with buzz words.
A meaningful shift has developed, where communities of companies and investors can emerge rather than one-off business deals between two entities.
There is an opportunity for the newcomers to blockchain and OGs, for the innovators and investors alike, to share knowledge, experience, and develop opportunity together.
We believe that BitAngels Texas can become a successful umbrella to transform the blockchain and entrepreneurial landscape in Texas. From our experience with this event and others, the days of pay-to-play pitch competitions and hype communication have dwindled. People want to stay and connect at these events, not just rush off to set up meetings with investors or use the event time to sway investors with buzz words. And those investors won’t fall for buzz words anyway, they are now too educated for that. Communities of companies and investors can now emerge.
This is an opportunity for both newcomers to blockchain and OGs, for the innovators and investors alike, to share knowledge, experience, and develop opportunity together.
“This industry has grown so much in just five years. Expertise has become crucial. Now, there is a need for legacy players and investors to nurture and help our new companies, specifically with helping them refine their business development strategies and thought leadership. Gaining investors is not the only goal anymore. These company leaders want to connect meaningfully, they want to position themselves as thought leaders and innovators of truly groundbreaking technology. We have to nurture that community in order to help them, and that’s what we aim to do with these events beyond pitching and networking. We’re going to make this happen in Austin,” says Irina.