Wednesday May 29th, Startup Grind Austin welcomed Hall Martin, director of Texas Entrepreneur Networks. Martin has extensive experience growing businesses and growing Angel Networks. Texas Entrepreneur Networks, his most recent venture, has helped 60 companies get more than 60 million in funding in the past 2 years.
Our conversation started with Martin's background at National Instruments and what drew him to technology in the first place – a desire to work on the next big thing. He started Angel Investing in the late 90s and joined the Central Texas Angel Network as one of its early members and found himself in charge of membership and then the director. He was the director of CTAN for several years, until he started Texas Entrepreneur Networks, a way to give entrepreneurs a place to go to find all of the information they might need to grow their companies in one place.
One of the other insights Martin shared from his crystal ball is what he feels the next big industry for technology will be. Given the increasing global issues with availability of water and the focus on local foods, Martin thinks that food and water technologies are going to be a hot area in the next several years. These are areas that can be more expensive to start than a software company, but there are beginning to be more accelerators and angel investors who are focused on this area.As we were discussing how revenue, even a small amount, can make startups much more attractive to angel investors, Martin shared an innovative funding model that he has found successful for Angel investors – revenue based funding. In this model, an investor invests and, instead of waiting for an exit to cash out, they get a percentage of revenue, usually around 5%,capped at a lower multiple total payout, like 2x. This is a lower risk model for an angel investor and allows them to recognize return much more quickly. It can also be beneficial for the entrepreneur, as they are not giving up equity in their company.
It was an informative evening with lots of good insight for the group! Looking forward to June’s event with Kevin Koym. Reminder, June’s event will be at Tech Ranch, not Capital Factory.