Here are my recommendations to fundraising in Austin.

1. There are very few people in Austin who can write meaningful checks. Many investors write checks in the $10–15k chunks more often than not. Be careful about ending up with 15–20 investors to get to $500K. More investors in a small round = more management time spent by you. Look at Loop and Tie who took 52 investors to raise $2.6M in Austin. It’s great they got the money, but my goodness that’s a lot of people to wrangle for $50k each.
2. The seed round can really negatively affect your next round. I have been told by a friend about an Austin VC balking at the terms offered by a “seasoned investor in Austin” and causing problems with the round. You don’t want past and present investors arguing with each other.
3. If you indeed have a great team, be careful about accelerators. They are selling you something in many cases as they will give you X for equity. Accelerators take a lot and oftentimes leave you a few months down the road with little to show for it. Some like TechStars have been proven to create winners which also means they are very picky about who they accept and it shows in their recruitment process. Giving up 2% here and 6% there can end up sending meaningful amounts of your equity out the door when you need it the most.
4. Talk to people outside of Austin. Compare and contrast the terms you get locally to those from SV, NY, Dallas, and Boston.
5. You don’t need a co-working space unless it is one with free parking and in a very quiet atmosphere so you can focus on your work. Your time is precious.
6. You don’t need to be downtown to build a great company. Many companies are now building in the Domain area. Being downtown will cost hundreds of dollars each month per employee for parking and that can eat into your early expenses. Consider every dollar spent today to be worth $7 a year later.
7. Build your company out of your dorm room, house, or apartment as long as you can. Then when it starts to take off move into a reasonably-priced office space that allows you and your team to focus and go through the forming, storming, norming, and performing phases.
8. Watch out for egregious liquidation preferences in the terms offered by investors. They will cost you a lot months or years later. I have a friend in NY who sold his company for ~$8M. After the liquidation preferences from his investors, he and his team were left with very little in their bank accounts.
9. Most importantly — start vesting your founder shares day one. Otherwise you will get to a later round and the investor will ask you to vest your shares. Start off the bat with a 4 year monthly vest with no cliff. Put some good acceleration terms in there too. It will save you from the heartache later in your company’s life.

Good luck with your raise! Connect with me on LinkedIn if you would like to chat further.