Steve Case: Focus on Dallas Startups that “Might Be the Next Amazon”
Dallas—Steve Case brought his Rise of the Rest tour to Dallas Monday, mingling with business and political leaders and offering advice to entrepreneurs who hope to join their ranks.
“Dallas is clearly on the rise,” Case told an assembled group of entrepreneurs at Dallas brewery and taproom Community Beer Co.
Still, that progress is endangered by the fact that so little venture capital comes to the region and the state of Texas. A majority of investment goes to startups in three states: California, Massachusetts, and New York, Case said.
“And 90 percent of venture funding goes to white men,” Case said. “It seems like we’re leaving a lot of great ideas on the table.”
Case, the founder of AOL and venture capital firm Revolution, started pilgrimages to more overlooked tech ecosystems in 2014 to highlight undervalued tech ecosystems as a core feature of Rise of the Rest, which also includes a seed fund that makes about 20 investments annually. “Dallas has a lot of money but doesn’t have the network density,” he said. “We’re always surprised when we visit these cities when we meet people in a community who don’t know each other.”
Last year, Case announced a related $150 million venture fund to help get money to deserving entrepreneurs with promising technologies. The Rise of the Rest Seed Fund is managed by Case and JD Vance, the Hillbilly Elegy author who also joined Case’s fund, Revolution last year. As my colleague Sarah Schmid-Stevenson reported last year, the fund contributors include notable entrepreneurs and investors, including Alphabet’s Eric Schmidt, Amazon’s Jeff Bezos, BET co-founder Sheila Johnson, and members of the Koch and Walton families.
Dallas is the 34th city visited by Rise of the Rest, and likely one of the more economically strong regions in a tour that has stopped in hard-hit midwest cities, including Detroit.
The Rise of the Rest entourage, which included some Texas startup leaders—such as Station Houston CEO JR Reale, Dallas Entrepreneur Center founder and former CEO Trey Bowles, and Capital Factory founder and CEO Josh Baer—also served as judged for a pitch competition. Nickson, an e-commerce startup that has an apartment furnishing service, won a $100,000 check.
Of course, the impending decision by Amazon on where to locate its so-called HQ2 project came up. Dallas is one of 20 cities that made the first cut of contenders. (Austin is the other Texas city vying for the project.) Amber Venz Box, founder and CEO of Reward Style, said she is “not a fan of Amazon.”
“I don’t like the culture there; it’s depressed wages and depressed creativity,” she said. “I wouldn’t want my son or daughter to work there.”
Although Case said he thought an Amazon presence in Dallas could be a good thing for the city, he stressed that nurturing home-grown entrepreneurs is, in some ways, more important. “Back the startups that could be the next Amazon,” he said. “That’s the right model for economic development.”