November 9, 2023 - Dallas Innovates

Venture Titans Gather at Circle T Ranch to Power North Texas’ ‘Next-Level’ Growth

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Circle T Ranch in Westlake recently opened its gates to an elite group of more than 200 investors, innovators, and business leaders. The private reception at Ross Perot Jr.’s scenic ranch at AllianceTexas has become an annual tradition for the Venture Dallas franchise—and a coveted invitation for founders and funders alike.

Even a downpour couldn’t dampen spirits. “It was a 10 out of 10,” one guest said. 

“When you put great founders and investors together, magic happens,” said Aaron Pierce, Venture Dallas Chair and a partner at Perot Jain.  The setting—Circle T’s one-of-a-kind development blending business with a working cattle ranch—is part of the alchemy.

Pierce said it’s a draw that brings some of the best investors in the nation to Dallas. The reception—now in its fourth year—at the rustic Texas Barn on Oct. 24 anchored the Venture Dallas conference with “high-impact” conversation and connections the night before the main event in Dallas. “When investors come here from out of town, their eyes are opened to what’s happening in Dallas,” he said. “It sets the stage for partnerships.”

Investors from coast to coast

Getting together in a social setting, especially one as unique as Circle T Ranch, builds relationships that “lead to the exchange of deal flow and co-investment,” said Bryan Chambers, a founding board member of Venture Dallas. Judging by the roster of VCs, angels, family offices, and corporate venture investors at the ranch, that formula is working.

This year’s Circle T Ranch event drew more funders nationwide, including Evan Baehr, managing partner of Austin-based Learn; Kevin King, partner at Boston’s General Catalyst; and Atlanta-based Anant Patel, director at Koch Disruptive Technologies.

Others making the trip to Dallas included Keith Bank of KB Partners in Highland Park, Illinois; Cyrus Sigari of UP.Partners in California; Amy Kruse of Satori Neuro in Washington, D.C.; and representatives from funds like LiveOak Venture Partners, NextCoast Ventures, and more.

EP Golf Fund, golf tech demos  

Earlier in the day, investors and leaders celebrated the launch of the EP Golf Fund, a partnership between the PGA and Elysian Park Ventures aimed at supporting startups in the golf space. The fund’s inaugural portfolio companies were on hand, including Golf+, a VR golf game that allows people to play on real-world courses with “true-to-golf” physics, and Dryvebox, a mobile golf simulator that can be rented.

Pierce said the event focuses on real investment opportunities in the ecosystem. And that translates to more capital for Dallas entrepreneurs. Leaders of million- and billion-dollar businesses said the event hosted a group you can’t find anywhere else in one room. And more than one entrepreneur told us they cleared their calendar for the event.

But Michael Ulwelling, who flew in from Oregon, may have said it best: “If you are a founder, inside or outside of Dallas, who had an invitation to the VIP event and did not attend the event—that was a major mistake.”

Startups from stealth to exit

The event rounded up successful North Texas startup founders, including Scott Harper of Dialexa, who successfully exited to IBM last year. Others were serial entrepreneurs like Mizzen+Main co-founder Kevin LaValle, currently pursuing his next venture in stealth; Linear Labs’ Brad Hunstable; ByteTrails’ Brenda Stoner; and Power To Pitch’s Kat Weaver.

Venture Dallas Startup of the Year winners were also on hand: CollateralEdge’s Joe Beard, a VC-turned-entrepreneur, as well as Firehawk’s Will Edwards, on the cusp of a major test-launch site deal, and Testfit’s Clifton Harness, who compared notes on computer vision with Spacee’s Skip Howard.

Fireside chat: Sizing up the Dallas-Fort Worth ecosystem

Dealmakers and disruptors came for the connection and the conversation. One of the most important conversations focused attention on advancing Dallas-Fort Worth’s venture ecosystem to the next level. In a fireside chat, the spotlight shifted to another C-word—collaboration.

On stage at the Texas Barn, Pierce highlighted the region’s assets—capital, corporations, and talent. “As an ecosystem, Dallas-Fort Worth has a lot going for it,” he said. About a year ago, Anurag Jain and the Perot Jain team saw even more potential: “We did a lot of work around that, talking to leadership in the region and beyond,” Pierce added. “Tonight’s program is sharing a little bit of that.”

Jain, chairman and founding partner of Perot Jain, sat down with Hillwood’s Henry Ross Perot III and McKinsey’s Brendan Gaffey to explore the state of the ecosystem and plot what happens next. 

Jain looked back on progress. “Look around—these are the movers and shakers of Dallas,” he said. “At this event three and a half years ago, we had a [fraction] of the audience in the room today. But we got together and said, ‘We’ve got to make Dallas relevant; we’ve got to put it on the map.’”

And we did, he said. Now he wants all those movers and shakers to help put it even more on the map.

“Dallas is a unique ecosystem”

Working alongside Perot Jain, Gaffey, head of McKinsey’s venture business, saw potential to expand Dallas’ presence. “Dallas is a great spot to do much more than it’s currently doing in the startup and innovation world,” he said. Through extensive interviews with founders and investors, locally and beyond, Gaffey and Perot Jain formed a panoramic view of the ecosystem here.

They heard, “Dallas is a unique ecosystem,” Gaffey said, which is both a challenge and an opportunity. In terms of venture capital, Dallas has a “lot of the components that would make it a tier-one venture city.” He drew comparisons to Los Angeles’ VC growth from tier two status around 15 years ago. Dallas now has the chance to “step up.”

“There are a lot of ways of doing [that],” he said. “Venture is not the only measure of success,” nodding to Dallas’ business diversity and well-noted strengths. 

Jain ticked off a few, highlighting the financial capacity of the city: Dallas has a lot of money, family offices, corporates, capital, and later-stage companies. But, he asked Gaffey, “Where do you see the innovation in the city?”

Logistics, biotech, defense, SaaS strengths

“Where innovation is going, and where it’s coming from … play stronger in Dallas,” Gaffey said.

He sees a strong foundation in B2B innovation like logistics tech, biotech, defense, and enterprise SaaS. “With things that have transpired over the last two years, I’m bullish on the capabilities that reside in Dallas,” he said.

However, the local VC landscape doesn’t yet “fully reinforce” that potential, he said. Gaffey recommended shifting more private capital from real estate toward funding startups and venture.

“There’s a ton of private capital that doesn’t always flow into the VC sector,” Gaffey said, pointing to a key opportunity in the region. We also need more big successful exits to reinforce the “looping” of VC capital and exits, he said.

Not surprisingly, “Dallas has a unique way of building its startups,” he said. Dallas is a pioneering place that celebrates risk, but “the tech founder pathway needs more recognition and support,” similar to what you might find in a Silicon Valley, he said.

Gaffey stressed that real change requires the collective action of the community. “We have to pull at the same time to radically change the trajectory,” he urged.

Jain agreed that Dallas has ingredients like B2B expertise in place. And more big, successful founder exits are a key for success: “We need a few more Scotts.” Jain said, pointing to Dallas-based Dialexa founder Scott Harper, noting his successful exit to IBM last year. The acquisition was IBM Consulting’s first in the digital product engineering services market, which it estimated as a $700 billion market by 2026. Those kinds of success stories cycle resources, talent, experience, and credibility, he said. 

Perot: a “ringside view” of Dallas-Fort Worth

Shifting the focus to Henry Ross Perot III, or Hill, Jain said Perot has had a “ringside view” of the region for about four decades. As the son of Henry Ross Perot Jr. and the grandson of H. Ross Perot Sr., he brings a unique third-generation perspective on the region. And as vice president of Hillwood, Perot has been instrumental in overseeing industrial and warehousing interests within AllianceTexas.

Perot recalled the transformation he’s seen firsthand. “As a native growing up here, it’s amazing what I’ve seen in my lifetime, growing from around 5 million people to about 8 million today.” he said. “Houston and Chicago are ahead of us—depending on how you count it—but in the next 10 to 15 years, we’ll be the third-largest metropolitan area in the United States.”

We “really are all grown up,” Perot said, attributing much of the region’s maturity to Dallas Fort Worth International Airport.

In comparing Dallas to Austin, he said: “Austin is great, but if you’re going to build your business and you’re traveling around the world or the U.S., it’s not easy to do if you’re flying in and out of Austin.”

“I’m going to say Dallas-Fort Worth and North Texas a lot tonight.”

Talking about Dallas, Perot reinforces the regional perspective. “In our business,” Perot said, “We always say Dallas-Fort Worth. And I’m going to say Dallas-Fort Worth and North Texas a lot tonight.”

Perot is proud of the economic powerhouse the region has become. “We’ve come a long way since the 1980s with the savings and loan crisis,” Perot said. At the time, “we were really just banks, cattle, real estate, oil, and gas—and they all crashed at the same time.”

Today Perot sees a “diverse DFW,” leading in sectors that play to its strengths. Our current—and future—success owes to the historic foresight of the region’s business leaders, he said. While acknowledging Gaffey’s point that DFW is not necessarily known for its consumer tech, Perot, like Jain, sees advantage in the region’s B2B expertise. And he highlighted a key sector where Dallas excels: logistics tech.

“Our firm is very involved in mobility innovation,” Perot said, noting Hillwood’s strategic AllianceTexas location. The 27,000-acre development has been part of the company’s vision since the ’80s, which took a long view to regional growth, he said. Circle T Ranch itself is part of that vision, with its master plan for multiple corporate campuses surrounding acres of lakes, parkland, and range land.

Perot pointed to innovative endeavors happening at AllianceTexas, which recently hosted the invitation-only UP.Summit on rethinking the future of transportation, which brought more than 250 of “the world’s most innovative minds” in the sector to North Texas. Those visionaries represent over $1 trillion worth of investable capital, according to the UP.Partners group.

Perot is working to “position North Texas to be the mobility innovation zone in the entire world,” he said. Alliance Airport’s own Mobility Innovation Zone makes the region a frontrunner already. “We’re testing drone delivery, autonomous trucks, drone delivery to people’s front doors,” Perot said.

He emphasized the region’s advantage in supporting new businesses, particularly through proactive efforts and resources. “We’re getting regulatory approval and political resources people need right now here in North Texas,” he said.

Comparing Texas to California, Perot highlighted the Lone Star State’s low-tax, low-regulation, pro-business environment. “There’s no reason Texas should beat California in business development,” he said, “but we do it because of our culture, because of our people.”

“As I look at the population growth, the economic growth, the political and regulatory environment,” Perot said, “whether you’re a fund or a founder, this is a really good place to do business.”

“No silver bullet,” but models of success

Jain shifted the spotlight to how other cities are progressing and what Dallas can learn from their strategies. As Gaffey put it, “There’s no silver bullet.” But he sees interesting models for success around the country:

Chicago, for example, has “a great network” and a solid startup ecosystem supported by families and individuals with the “means and the will” to invest, both politically and financially, he said.

In Houston, the city is embracing a “fund the funds” strategy and has initiated a “reverse pitch” concept to galvanize local investment, encouraging venture capitalists to bring their money and expertise to the table.

Miami is utilizing the clout of “two or three very high-profile investors,” creating a buzz that could potentially transform its business landscape, he said. Its PR efforts have been turning heads and shifting perspectives about Miami’s role in the tech and entrepreneurial landscape, he said, adding that “fundamentally, the PR … was pretty transformational.”

And in Atlanta, Gaffey sees some “great things” in startup mentoring and incubation.

Boosting the Dallas’ “metabolic rate”

To accelerate Dallas’ “metabolic rate,” it needs to pursue multiple strategies simultaneously, Gaffey said. Dallas can do “four or five of those things” at the same time,” he said.

The key is compounding efforts, rather than operating in isolation. Collaboration can “stitch them together in parallel.” He described the flywheel effect, where enough synchronized components reach critical mass and feed ongoing growth.

We have a lot to work with. Dallas, he said, is an “unbelievable and vibrant ecosystem.” Among our innovation advantages are its strength in B2B tech, calling out logistics and biotech as key sectors, noting the rise of life science hub Pegasus Park in Dallas.

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