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Why One VC Firm Moved Its Headquarters From NYC to Austin2 min read

Austin is seeing an influx of VC firms either relocating their headquarters (Peter Thiel, I’m looking at you) or opening a second (or third) office in the area. The insanely high housing costs in New York and parts of California is just one part of the story.

To get some insight on this increasingly common phenomenon, I talked to the folks at Quake Capital Partners. The firm moved its headquarters down to Austin in July, but it still has offices in New York and Los Angeles. Founding Partner Chad Burgess told me that a big draw for Quake was the sheer number of undergrad engineers coming out of the University of Texas at Austin and Texas A&M University.

“You’ve got 25,000 undergrad engineers coming out of those two schools alone, not to mention the army of interns you can choose from Rice University and the University of Houston as well,” he said. “Plus, the personnel side was a big component. The taxes, quality of life, and potential talent pool for startups we might invest in was attractive.”

“People can actually buy a house that’s affordable down here,” he went on to say. “In both those markets (L.A. and New York), unless you just make a lot of money, you’re kind of a renter for life.”

Quake, Burgess said, has avoided Silicon Valley not just because it is notoriously expensive in terms of housing and startup costs.

“There’s a lot of noise per capita [in Silicon Valley], meaning the amount of venture dollars there is very high,” he told Crunchbase News. “Some of these other markets, like Austin for example, there’s a lot of startups but not a lot of venture dollars. This approach fills a very big need and void.”

Founded in January 2016, Quake started investing in early 2017 out of a $4.65 million fund. It invested in 31 companies out of that fund. At the beginning of this year, it started investing out of its second fund and has already moved on to raising for its third, with a target of raising $125 million.

“Each office invests in 30 companies per year,” he said. “That’s 90 total, a pretty good balance for what we have. We’re going to be expanding pretty fast.”

More firms on the ground here means more money for Texas-based startups. And that’s not a bad thing for entrepreneurs who call Texas home.

The post Why One VC Firm Moved Its Headquarters From NYC to Austin appeared first on Crunchbase News.

Source: Crunchbase

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