Startup Lawyer | Making Dallas the City of Angels
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Making Dallas the City of Angels

Posted 24 Aug 2008

I could use more palm trees here in Dallas and while I’m at it a Togo’s. However, the “City of Angels” reference in this post’s title is about bridging the gap between entrepreneurs and angel investors rather than going “Under the Bridge.”

The startup ecosystem in Dallas is discombobulated if not broken. “Underperforming” would be a kind word to describe Dallas relative to other startup communities. To improve the Dallas startup scene, Alex Muse of Big in Japan is taking action and starting an entrepreneur-angel investor group:

The basic idea is to form a group designed to a) generate LOCAL dealflow for angel investors, b) assist entrepreneurs in the creation of fundable startups and c) provide investment capital for startups. Instead of charging angels and entrepreneurs a fee to participate require that they instead invest their time.

If you are interested in helping organize this group I invite you to attend. At this time we are seeking a) angels with experience, b) angels without experience, c) entrepreneurs interested in helping and d) entrepreneurs interested in pitching. The idea is not to create an angel group in secret or without the input of entrepreneurs, but to instead create it by and for all parties.

The first meeting was last week and it went pretty well. We’re in the process of defining the vision (i.e., do we change the world or change one entrepreneur/angel at a time) and laying out the ground rules. In other words, the group realizes planning is essential to ensure an entrepreneur-angel improvement in Dallas.

From what I’ve experienced, Dallas investors are comfortable investing in real estate and oil & gas deals–but not in traditional startups. Maybe it’s because real estate and oil & gas deals tend to be structured as limited partnerships, and therefore the deal documents and language therein for startup investments might be too foreign for Dallas investors. Or maybe people in Dallas just know more about real estate and oil & gas.

Any thoughts on this from the Dallas crowd?

26 Comments
  • Alexander Muse
    Posted at 09:42h, 25 August Reply

    Thanks for the note! We are planning to get the group together early next month to talk about next steps.

  • Alexander Muse
    Posted at 04:42h, 25 August Reply

    Thanks for the note! We are planning to get the group together early next month to talk about next steps.

  • Magnus
    Posted at 14:11h, 25 August Reply

    Dang, I miss ToGo's. Can we get an in-n-out or two as well? ;)

    (used to live in CA, now in Dallas).

  • Magnus
    Posted at 09:11h, 25 August Reply

    Dang, I miss ToGo's. Can we get an in-n-out or two as well? ;)

    (used to live in CA, now in Dallas).

  • Bradley Joyce
    Posted at 15:28h, 25 August Reply

    I had a conversation today, and one of the things mentioned was that Dallas investors may not be accustomed to the failure rate of tech startups as compared to oil & gas or real estate investments.

    I don't really know any investors here in Dallas so I can't say much about the validity of that statement, but it seems like it would make sense.

    At the same time, I've met many entrepreneurs that probably need less than $100,000 to get their startup off the ground and running… much less (I would assume) than your average oil and gas deal.

  • Bradley Joyce
    Posted at 10:28h, 25 August Reply

    I had a conversation today, and one of the things mentioned was that Dallas investors may not be accustomed to the failure rate of tech startups as compared to oil & gas or real estate investments.

    I don't really know any investors here in Dallas so I can't say much about the validity of that statement, but it seems like it would make sense.

    At the same time, I've met many entrepreneurs that probably need less than $100,000 to get their startup off the ground and running… much less (I would assume) than your average oil and gas deal.

  • Charles D. Allen
    Posted at 17:46h, 25 September Reply

    I am interesred in this effort to generate dealflo and entrepreneural consulting in the Dallas Metroplex. My practice is in Chicago and my I built my home 4 years ago in Grand Prairie. I would like to start a ChiTownDealFlo

  • Charles D. Allen
    Posted at 12:46h, 25 September Reply

    I am interesred in this effort to generate dealflo and entrepreneural consulting in the Dallas Metroplex. My practice is in Chicago and my I built my home 4 years ago in Grand Prairie. I would like to start a ChiTownDealFlo

  • Ryan Roberts
    Posted at 17:42h, 30 September Reply

    Charles- I'm not quite sure I follow.

  • Ryan Roberts
    Posted at 12:42h, 30 September Reply

    Charles- I'm not quite sure I follow.

  • Susan Pruitt
    Posted at 10:52h, 22 October Reply

    Bradley, I agree with your assesment of some of the Dallas start ups. I only needed $70k as a second round of funding and was turned away because it seems so many groups have a minimum of $250k, way more than I need as an established business. It is a very frustrating environment for entrepreneurs.

  • Susan Pruitt
    Posted at 05:52h, 22 October Reply

    Bradley, I agree with your assesment of some of the Dallas start ups. I only needed $70k as a second round of funding and was turned away because it seems so many groups have a minimum of $250k, way more than I need as an established business. It is a very frustrating environment for entrepreneurs.

  • The Startup Lawyer - Ryan Roberts : Texas Startup Blog
    Posted at 13:47h, 03 November Reply

    […] Angel/Entrepreneur efforts (ironically I only found his blog when he wrote a post titled, ‘Making Dallas the City of Angels‘).  After several conversations it became clear that we both shared a similar view of the […]

  • Sam Hyatt
    Posted at 18:05h, 29 May Reply

    I would like to thank you for this post. I had no idea that this was under way. I am starting a group called DASH Angels to serve the focus area of Dallas, Austin, San Antonio, and Houston. The fact that you are dealing with an extremely conservative group of angels who deal mostly in oil and gas and real estate is going to lead to a much smaller turnout than what you would like. I am still getting started and have my own startup that needs funding, but I think something with a focus on this area is great and I would like to help, if not create a partnership of sharing where members from each group can enjoy a singular meeting/showing and twice the deal flow availability. If anyone has any questions please forward them to shyatt@biicast.com and comments naturally go here. Have a great day.

  • c.d.
    Posted at 21:19h, 24 September Reply

    I own a small yet successful business in DFW and also have invested 6 figures in oil and gas recently. I must say… I would have done as well helping an actual entrepreneur get started with a decent idea that had a real chance of making some money! But where are those to be found?…. More likely to just get scammed, again!…. And that is the mentality that you will be fighting with potential Angel investors, unfortunately for the idealist. We have most all been taken by some form of scam and are very jadded and almost expect to be scammed at this point. We have seen so many real estate deals and restaurants go belly up that we just have trouble ever pulling the trigger again! Legit deals are hard to find and even harder to believe. Wish it were not so. Hard to believe that if it is such a good idea, then it must have already been tried or done, and done better by now.

    • Sam Hyatt
      Posted at 14:51h, 06 May Reply

      C.D. If you are looking for a few opportunities to invest small amounts, email me at shyatt@biicast.com. I am starting a seed stage only angel group that involves sports figures, registered angels, and non-traditional angels. Investing side by side of people who do this frequently, those who don’t can feel more comfortable and get sound advice on what to do to maximize their investment. Let’s talk and see what happens. Have a great day!

      Sam

  • c.d.
    Posted at 16:19h, 24 September Reply

    I own a small yet successful business in DFW and also have invested 6 figures in oil and gas recently. I must say… I would have done as well helping an actual entrepreneur get started with a decent idea that had a real chance of making some money! But where are those to be found?…. More likely to just get scammed, again!…. And that is the mentality that you will be fighting with potential Angel investors, unfortunately for the idealist. We have most all been taken by some form of scam and are very jadded and almost expect to be scammed at this point. We have seen so many real estate deals and restaurants go belly up that we just have trouble ever pulling the trigger again! Legit deals are hard to find and even harder to believe. Wish it were not so. Hard to believe that if it is such a good idea, then it must have already been tried or done, and done better by now.

    • Sam Hyatt
      Posted at 09:51h, 06 May Reply

      C.D. If you are looking for a few opportunities to invest small amounts, email me at shyatt@biicast.com. I am starting a seed stage only angel group that involves sports figures, registered angels, and non-traditional angels. Investing side by side of people who do this frequently, those who don’t can feel more comfortable and get sound advice on what to do to maximize their investment. Let’s talk and see what happens. Have a great day!

      Sam

  • Andrew
    Posted at 14:51h, 29 September Reply

    What about entrepreneurs like myself who operate under sustainable growth, but do need that first influx of funding? If we're buried deep in the trenches, building our products, how can we find good mentorship for raising capital?

  • Andrew
    Posted at 09:51h, 29 September Reply

    What about entrepreneurs like myself who operate under sustainable growth, but do need that first influx of funding? If we're buried deep in the trenches, building our products, how can we find good mentorship for raising capital?

  • Clark Ortiz
    Posted at 08:13h, 05 May Reply

    Texas was built on the black blood of the land. Those that hold or move the money are more comfortable in their present history. I think structuring a deal for capital funding with the same L.P. options an oil rig would request for start ups or creative funding may help new ventures.

    Let me know about any of your meetings. Extremely interested in networking with VC/Angels

  • Clark Ortiz
    Posted at 03:13h, 05 May Reply

    Texas was built on the black blood of the land. Those that hold or move the money are more comfortable in their present history. I think structuring a deal for capital funding with the same L.P. options an oil rig would request for start ups or creative funding may help new ventures.

    Let me know about any of your meetings. Extremely interested in networking with VC/Angels

  • Ryan Roberts
    Posted at 08:45h, 10 May Reply

    Clark –

    The problem is most investors not familiar with startups want "control". So if the startup agrees, you get someone who has no clue about the space/project effectively running the show.

  • Ryan Roberts
    Posted at 03:45h, 10 May Reply

    Clark –

    The problem is most investors not familiar with startups want "control". So if the startup agrees, you get someone who has no clue about the space/project effectively running the show.

  • Dallas angels | Shereesvoice
    Posted at 09:46h, 14 November Reply

    […] Dallas Fort Worth Entrepreneur Angel Investor Group | Startup LawyerAug 24, 2008 … To improve the Dallas startup scene, Alex Muse of Big in Japan is taking action and starting an entrepreneur-angel investor group: The basic … […]

  • Sonesh
    Posted at 12:48h, 13 March Reply

    How can I help. I recently changed careers and want to get into the VC industry and help startups.

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