Author: LauraLorek@gmail.com (Page 1 of 348)

Austin’s venture capital landscape shows signs of recovery, with area startups raising $978 million across 80 deals in Q3 2024, marking a 44% increase from last year, according to data presented at Austin Tech Week.

During a panel discussion at Capital Factory Wednesday, leading Texas venture capitalists discussed how the investment climate has evolved since the market correction in 2022. While deal activity remains below the peak levels in 2021, investors noted that valuations have stabilized, and a renewed focus on sustainable growth and profitability has been renewed.

Charlie Plauche, General Partner of S3 Ventures, moderated the panel. Panelists included Kerry Rupp, General Partner of True Wealth Ventures; Krishna Srinivasan, founding general partner of LiveOak Ventures; Morgan Flager, managing director of Silverton Partners; and Tom Ball, Founding General Partner of Next Coast Ventures.

“The world has flipped,” said Srinivasan with LiveOak Ventures, explaining that companies can no longer pursue growth at all costs as they did in 2021. Instead, investors are prioritizing underlying solid business fundamentals and capital efficiency.

Though with a distinctly Texas twist, the panelists highlighted artificial intelligence as a significant investment theme. Rather than competing with Silicon Valley on foundational AI models, Texas startups are finding success in applying AI to specific industries where the region has deep domain expertise.

However, challenges remain. Rupp, with True Wealth Ventures, noted that despite increased attention to diversity, only 2% of venture funding goes to all-women founding teams. However, mixed-gender teams have improved, reaching about 20% of funding.

Year-to-date, Austin startups have raised $2.3 billion across 268 deals in 2024, positioning Texas as the fourth-largest state for venture capital investment behind California, Massachusetts, and New York.

Other key takeaways:

Texas/Austin Market Status:

• Texas is now the #4 state for VC funding behind CA, MA, and NY
• Deal activity is recovering from 2023’s slowdown but not back to 2021 peak levels

Current Market Dynamics:

• Company valuations have significantly decreased from 2021 peaks:
  • Top companies now valued at ~8x revenue (down from 40-50x)
  • Average companies at ~5x revenue (down from 20x+)
• The focus has shifted from pure growth to balanced growth and profitability
• Bridge rounds and inside rounds were common in 2023-24
• Down rounds were frequent (20-24% of deals in 2023)

AI Investment Trends:

• Creating a valuation divide between AI and non-AI companies
• AI companies still commanding premium valuations (20-40x revenue)
• Texas VCs focusing on:
  • Vertical AI applications with domain expertise
  • Enterprise software enhanced by AI

Advice for Founders:

• Best ways to approach VCs:
  • Get warm introductions through seed investors, lawyers, or portfolio companies
  • Tailor outreach to specific firms/partners
  • Junior VC team members are valid entry points
• When raising:
  • Be realistic about growth projections
  • Focus on capital efficiency
  • Demonstrate strong unit economics
  • Show a clear path to cash flow break-even
  • Don’t fixate on “triple, triple, double, double” growth at all costs

Investment Criteria:

• Early stage:
  • Team quality and domain expertise
  • Market size and problem urgency
  • Unique differentiation
• Later stage:
  • Revenue metrics
  • Customer retention
  • Capital efficiency
  • Growth rate sustainability

At an Austin Tech Week panel hosted at Capital Factory on Wednesday morning, emerging Venture Capital fund managers discussed why they’re betting on Austin and shared candid advice for founders seeking early-stage investment.

The “New VCs on the Block” panel, moderated by Perkins Coie partner Dan Austin, featured partners from several newer investment firms, including Firebrand Ventures, FirstMile Ventures, Rock Yard Ventures, and Runtime Ventures.

The investors highlighted Austin’s collaborative spirit as a key draw. “There’s this swell of energy, something happening here,” said Daniel Dart of Rock Yard Ventures.

FirstMile Ventures’ Zaz Floreani expanded this sentiment to Texas as a whole, noting that the welcoming atmosphere extends to Dallas and Houston’s startup scenes. According to Crunchbase, FirstMile Ventures focuses on seed and pre-seed investments in software, IT, and SaaS industries, primarily in Colorado. The firm has invested in 58 startups and raised $30.6 million.

For Runtime Ventures, which specializes in cybersecurity investments, Austin’s growing cybersecurity ecosystem makes it an attractive market. “More and more companies and cyber professionals are coming to town,” said David Endler, who’s lived in Austin for over 20 years. “The community here is collaborative, which isn’t true for every city.”

When discussing how founders should approach VCs, the panel emphasized authenticity over perfection. Floreani offered a “spicy take,” stating that VC value-add is often overstated. “Companies are built and sold by founders and their teams,” she said, suggesting that VCs’ principal value is helping companies prepare for future funding rounds and providing guidance during difficult times.

It’s tough to get funding, said Dart. Generally, the funder controls power dynamics. Rock Yard Ventures sees about 5,000 deals a year, and 10 of those are highly competitive, Dart said.

“The reality is like if people are gonna give you fucking money, take it,” Dart said.

According to Fundera, less than 0.05% of startup businesses receive venture funding. 

The investors also addressed common questions about timing and prerequisites for funding. Claire Hansen of Firebrand Ventures explained that while definitions of funding stages are shifting, the seed sage typically means having a sellable product with some beta or full customers. At the same time, pre-seed usually involves companies that are still focused primarily on product development.

Firebrand Ventures, founded in 2016, has raised $57.7 million, with the latest $40 million fund announced in 2021. According to FundingTrip.com, it has invested in 27 companies in Austin, Boulder, Denver, Chicago, Des Moines, and Kansas City.

Regarding artificial intelligence, the panel agreed that not every startup needs to be an AI company. However, they look for founders who understand how to leverage AI to make their operations more efficient, regardless of industry focus.

The discussion concluded with practical advice for founders: know your target investors, do your homework, and understand that warm introductions still matter. Dart said, “If we think we can make money off you, that’s our job. We’re also very accessible – that’s also our job.”

In a candid conversation during Austin Startup Week, two of the city’s most influential tech entrepreneurs—Joshua Baer, co-founder of Capital Factory, and Brett Hurt, founder and CEO of data.world—shared their unique perspectives on Austin’s transformation from a sleepy college town to a major tech hub.

The Early Days: Bootstrap Austin

“When I was a kid, Austin was the size of Anchorage, Alaska today,” Hurt recalls, painting a picture of a much smaller city where tech was barely a blip on the radar.

In 2003, the two entrepreneurs first crossed paths at Bootstrap Austin, one of the city’s earliest tech meetups. At the time, the concept of bootstrapping – building a company without external funding – was gaining traction as software and SaaS made it increasingly feasible to launch tech companies with minimal capital.

The meetup scene was sparse then, with Bijoy Goswami’s Bootstrap Austin being one of the only gathering places for tech entrepreneurs. Today, Capital Factory alone hosts over 60 regular meetups, showcasing the explosive growth of Austin’s tech community, Baer said.

The Rise of Austin’s Tech Ecosystem

The conversation between Baer and Hurt reveals how Austin’s tech scene evolved through successive waves of innovation. Hurt’s journey with Bazaarvoice, which went public in 2012 with a billion-dollar IPO, marked one of Austin’s early major tech successes. The company pioneered customer reviews for e-commerce and grew from initial meetings at Capital Factory to over 13,000 customers worldwide.

“We’re living in the best age in Austin’s history,” Hurt emphasizes, pointing to the city’s current advantages: “massive diversity of capital and funds.” This marks a dramatic shift from the early days when Austin Ventures was the only primary funding source in town.

Challenges and Opportunities

Despite the tremendous growth, both entrepreneurs acknowledge Austin faces significant challenges. Hurt, a native Austinite, expresses concern about Texas politics potentially deterring talent and companies. However, he sees Austin’s unique position as a place where different viewpoints converge as both a challenge and an opportunity.

“Austin is one of the few places where these things are forced to converge and live together,” Baer notes, suggesting that it could be unstoppable if Austin can maintain dialogue and collaboration across different perspectives.

The Next Wave: AI and Future Growth

Looking ahead, both entrepreneurs are bullish on Austin’s future, particularly with the emergence of AI. “You are going to see more change in the next 10 years than you’ve ever seen in the entire history of technology,” Hurt predicts, noting that companies like data.world are at the forefront of this transformation.

The impact of Austin’s tech scene is already rippling across Texas. As Hurt observes, Austin is no longer just “the pot smokers” to people in Dallas and Houston—it’s become the envy of the state, producing leading businesses not just in tech but also in restaurants, music, and entertainment.

The Secret Sauce: Lifting Each Other Up

According to both entrepreneurs, Austin’s tech ecosystem’s most distinctive feature is its collaborative culture. This spirit of “lifting each other up” has attracted major investors like Jim Breyer and countless entrepreneurs to the city, Hurt said. It’s a culture that dates back to Austin’s early days and continues to differentiate it from other tech hubs.

“We live in the most amazing time to learn how to be an entrepreneur,” Hurt said, citing today’s founders’ abundant resources, capital, and tools. From the early days of Bootstrap Austin to the current AI revolution, Austin’s tech scene continues to evolve while maintaining its fundamental spirit of collaboration and innovation.

As Texas’s capital city looks to the future, its tech community’s success appears to be built not just on technological innovation but also on maintaining the delicate balance between rapid growth and preserving the collaborative, supportive culture that made it special in the first place.

“Also, you can chat with my book and get it online for free at https://www.theentrepreneursessentials.com/ – I think it was the first book that you could chat with (I ingested it into a custom OpenAI GPT on the very first day they launched custom GPTs),” according to Hurt.

Hurt also recommended Mike Maples Jr.’s book Pattern Breakers. He wrote this review of the book.

Shokworks, the International Accelerator, and Austin AI Valley have launched the Austin AI Lab, a groundbreaking initiative designed to accelerate AI adoption and innovation across Texas.

The lab, opening on November 22 in downtown Austin, aims to support businesses of all sizes with practical AI resources, propelling local companies through digital transformations that can bolster Texas’s reputation as a tech powerhouse.

“We’re thrilled to launch this initiative in Austin, a city that wants to lead in tech innovation,” Alejandro Laplana, CEO of Shokworks, said in a newsletter. “By providing access to AI agents, model execution, workflow automation, and data analytics, we’re playing our part so Texas businesses don’t fall behind the AI curve. It’s about helping them cut costs and streamline operations.”

With an emphasis on real-world solutions, the Austin AI Lab offers a unique environment where small-to-medium enterprises (SMEs) and larger businesses can test, prototype, and refine AI applications suited to their needs. This collaborative venture integrates the strengths of Shokworks’ AI and digital transformation expertise, the International Accelerator’s guidance for startups, and Austin AI Valley’s dedication to ecosystem growth through academic, industry, and public-sector partnerships.

“By equipping business owners with the tools to become AI-native, we’re enhancing their competitive edge and strengthening the region’s already impressive pool of global entrepreneurs,” Angelos Angelou, Founder of International Accelerator, said in a news release. The lab’s offerings include a flexible, pay-as-you-go model, democratizing access to enterprise-grade AI tools without hefty upfront investment. Businesses can access sophisticated solutions typically limited to giant corporations through specialized offerings such as AI Agents as a Service, Workflow Automation, and Data Analytics.

The lab’s collaborative framework aims to drive Austin’s potential as a leading AI innovation center forward. Shokworks brings over six years of AI experience with over 150 product successes, offering local firms tools to leverage AI effectively. Meanwhile, International Accelerator will guide foreign-born founders in navigating the U.S. market, further enriching the lab’s support network. Austin AI Valley, a non-profit dedicated to AI ecosystem development in Texas, will foster connections with academia and the business community to support startups’ needs for education and collaboration.

Anupam Govil, Managing Partner of Avasant and Founder of Austin AI Valley emphasized the lab’s strategic importance for the region: “The power of AI has to be carefully harnessed via a robust strategy, along with an ecosystem of partners who can pilot, develop, and implement the right use cases. I am pleased that the International Accelerator and Shokworks have partnered to launch Austin AI Lab; this will be an important step toward making Austin the leader in applied AI.”

Austin AI Lab’s launch is timely, as Austin’s reputation as a growing tech hub aligns with an urgent need for adaptable AI solutions that can drive efficiencies across sectors. The lab’s mission to make AI accessible and actionable reflects a commitment to fostering innovation and empowering Texas businesses, advancing the regional economy and the future of applied AI.

In an inspiring panel discussion,  successful women in technology shared their journeys from high school students to tech professionals, highlighting the transformative impact of the Code2College program on their careers.

Keatra Nesbitt, a volunteer instructor at Code2College and principal solutions engineer at Valkyrie, moderated the panel Monday morning at Austin Tech Week. Matt Stephenson, CEO of Code2College, was in the audience.

Kristy Lavache, operations specialist at H-E-B, participated in the Code2College program, as did Rocio Montero, student program coordinator at the University of Texas at Austin for Code2College, who is currently studying to become a data scientist.

Montero said the program’s comprehensive approach goes beyond traditional coding education. Through structured courses beginning with Python basics, students progress to advanced programming skills while simultaneously developing crucial professional capabilities.

Perhaps most remarkably, Code2College has established partnerships with major tech companies, enabling high school students to secure internships at prominent firms like Apple, Amazon, Sailpoint, and WP Engine. Nesbitt said these early professional experiences are invaluable in building confidence and real-world skills.

The impact of representation and mentorship emerged as a recurring theme throughout the discussion. “Having mentors who understand our struggles makes all the difference,” Lavache said. “It’s easier for us as younger people to connect with them and learn from their experiences.”

The program’s success has led to expansion through Vision 2024, an initiative specifically focused on supporting young women and African American women in tech, Montero said. Through workshops covering everything from time management to exploring various tech roles, Vision 2024 creates a supportive environment for aspiring technologists.

The panel’s advice to newcomers was both practical and encouraging. Lavache shared a particularly memorable story about temporarily disabling a work platform during her first three months on the job. She said a coworker told her “It’s okay to break things because that’s how you learn.” But now she tests new material in a sandbox which she created before deploying it to the platform everyone works on, she said.

For parents concerned about keeping young girls interested in STEM fields, the panelists highlighted how science and math are already present in daily life.

“STEM is a lot broader than what one may think,” Lavache said, suggesting that parents help children recognize how their everyday interests connect to STEM fields.

As the tech industry evolves, programs like Code2College are crucial in creating a more diverse and inclusive future. Through early exposure, mentorship, and practical experience, they’re not just teaching coding – they’re building confidence, breaking down barriers, and creating the next generation of tech leaders.

The program continues to accept volunteers and mentors, and industry professionals are welcome to participate as instructors and guest speakers. This ensures that its impact continues to grow and inspires future generations of women in technology.

In a revealing panel discussion on the evolution of the Consumer-Packaged Goods (CPG) industry, leading women Austin entrepreneurs and executives shared insights into how they’re reshaping the landscape of consumer products through innovation, strategic partnerships, and resilient business practices.

Shari Wynne Ressler, founder and CEO of SKU, Austin’s consumer packaged goods accelerator, and KASAMA spearheaded the panel during Austin Tech Week at Capital Factory on Monday afternoon. The panelists included  H-E-B Emerging Technology and Innovation Manager Laura Smith,  Granarly Founder and CEO Morgan Potts, and Cat Sampson, Co-Founder of Celzo Agua Fresca.

The panel highlighted the transformative changes occurring in an industry traditionally dominated by established players.

“When I started SKU, which was the first consumer product goods accelerator, we wanted to make consumer product goods an investable industry,” Wynne Ressler said.  She emphasized how the sector has evolved from kitchen startups to venture-backed enterprises. SKU has played a big role in that evolution. It has some of Austin’s most successful CPG brands in its portfolio, including Siete Foods, which Pepsi bought for $1.2 billion.

Morgan Potts, whose company created the world’s first whiskey-baked granola, shared candid insights about the challenges of scaling a CPG business.  Granarly’s products include The O.G. Whiskey Granola, a crunch and chewy granola with whiskey, raisins, and cranberries; Skinny Jeans Granola, a vegan and gluten-free granola made with gluten-free oats, olive oil, chia seeds and spices, and Espresso Yo Self Granola, a crunchy granola with dark chocolate and Wild Rooster Espresso.  

“About two years ago, I was almost ready to give up,” Potts revealed, describing the journey from local success to national retail presence. Major retailers, including Target, Whole Foods Global, and Amazon, now carry her products.

Sampson said Celzo Agua Fresco continues gaining market velocity and has landed several key accounts, such as the Viceroy Snowmass Hotel in Aspen, Colorado. Celzo Agua Fresca is a lightly sparkling, vitamin-infused soda alternative low in calories and sugar. Its flavors include strawberry hibiscus mint, spicy tamarind, and lemon ginger basil. It contains B-12, L-theanine, and antioxidants.

The discussion highlighted a persistent funding gap facing women entrepreneurs in the CPG space. Unlike their male counterparts, who often receive pre-revenue funding, women founders must demonstrate significant revenue – often up to $1 million – before securing their first investment checks.

Innovation in retail partnerships emerged as a key theme. HEB’s Smith emphasized the importance of focused innovation and clear communication in retail alliances.

She noted that “Understanding the one thing they’re great at” is crucial when evaluating new products and partnerships. Smith cautioned against companies claiming expertise in too many areas.

The panelists also addressed the critical challenge of maintaining shelf presence once products secure retail placement. “It’s one thing to get on the shelf and another to get off the shelf,”,  Potts said, emphasizing the importance of product velocity and consumer engagement.

Emerging trends in the industry include:

• Increased focus on data-driven decision making
• Evolution of retail partnerships and innovation centers
• Growing importance of authentic brand storytelling
• Rise of alternative distribution channels beyond traditional retail

The speakers highlighted innovative approaches to market entry, including partnerships with sports venues, hotels, and restaurant chains—strategies that often yield better margins and more direct consumer relationships than traditional retail channels.

Technology integration emerged as another crucial factor in the industry’s evolution. Retailers increasingly focus on computer vision, checkout solutions, and advanced product development tools to stay competitive in a rapidly changing market.

Despite the challenges, the panelists expressed optimism about the future of CPG, particularly for entrepreneurs willing to embrace innovation and build strong relationships across the industry. The discussion emphasized that success in modern CPG requires excellent products and strategic thinking about distribution, partnerships, and consumer engagement.

“The industry continues to evolve,” Wynne Ressler said, highlighting the shift from farmers’ market origins to professional retail presence and the growing emphasis on “better for you” products and technological integration.

As the CPG industry continues its transformation, these women leaders demonstrate that success comes from creating innovative products and building sustainable businesses that adapt to changing consumer preferences and retail environments. Their experiences suggest that while the path to success in CPG remains challenging, particularly for women entrepreneurs, new opportunities are emerging for those who can combine product innovation with strategic business acumen.

Gretel Perera, PR Director at Expedia Group, has built a legacy of community and connection rooted in her diverse experiences and heritage.

A Venezuelan diplomat’s daughter, Perera has navigated the world since childhood, moving every few years, adjusting to new cultures, and learning new languages. Her global upbringing gave her a unique skill: the ability to connect with people from all walks of life. This adaptability and drive for connection have profoundly influenced her career, especially in public relations and various leadership roles across communities and organizations.

Perera’s journey emphasizes fostering genuine connections and creating safe spaces for professional women. A decade ago, Perera co-founded Latinas in Tech, now an international organization supporting 20,000 women worldwide. Latinas in Tech started organically with small gatherings in San Francisco, where Perera invited a few friends for casual meet-ups. These meetings soon grew as more women, many newcomers from Latin America, came together to support one another professionally and personally. “Our first big gathering at Google brought in over 120 women,” Perera shares, “and it was a magical moment that underscored the need for these spaces in tech.”

Through partnerships with companies like Google, Airbnb, and Salesforce, Latinas in Tech has become a powerhouse network, helping Latina women thrive in industries where they are underrepresented. Major tech companies began to see the value, recognizing this as a recruitment tool and a way to support their DEI goals.

Perera’s next step was to empower women at higher levels. She launched Latinas500, a nonprofit focused on advancing Latina executives and senior leaders, addressing the gap at the top. This network hosts intimate meetings, executive retreats, and mentorship programs in partnership with institutions like the University of Texas, where seasoned professionals mentor Latina students.

But her influence doesn’t stop there. As a proud co-owner of Austin Woman Magazine, Perera is committed to spotlighting the stories of influential women in Austin. The magazine, a mainstay in the community for over 20 years, aligns with Perera’s mission to showcase the diversity and achievements of women in business, tech, and beyond.

Key Takeaways from Gretel Perera’s Journey:

1. Find Your People: Identify those who share your values, ambitions, or experiences. Building meaningful connections with like-minded individuals can be transformative both personally and professionally.
2. Consistency in Networking: Success in networking isn’t about showing up once; it’s about commitment and consistently engaging with your community.
3. The Power of Storytelling: Each person’s journey holds lessons for others. Sharing stories builds empathy, fosters learning, and strengthens bonds.
4. Mentorship and Guidance: Networking should open doors. Offering insights, sharing contacts, and providing actionable advice help communities thrive and individuals succeed.
5. Show Up and Engage: Like going to the gym, networking results require active participation. Show up with an open mind, ready to learn, support, and connect.

Perera’s story is one of resilience, leadership, and passion. Her journey is a testament to the power of creating inclusive spaces that celebrate and elevate diverse voices, reminding us that connection and community-building can improve lives and industries.

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At Capital Factory, as Austin Tech Week kicked off Monday morning, Stacy McCracken and Courtney Warnsman were on a mission: to help attendees absorb knowledge and ensure they took action with what they learned.

They believed that growth doesn’t just happen by sitting through sessions; it requires leaving your comfort zone and pushing into the “doing” zone. With guidance from tools like PositivePsychology.com’s toolkit, attendees were encouraged to take small, meaningful steps toward personal and professional transformation.

Throughout the event, Warnsman emphasized the importance of personality assessments like DISC, Enneagram, and CrystalKnows, which help individuals understand their strengths, weaknesses, and communication styles. By knowing themselves better, attendees could foster stronger connections and make impactful first impressions—vital for networking, which Warnsman and McCracken described as a way of life, not a single event.

Austin Tech Week has opportunities to connect, learn, and grow. McCracken shared how a small decision to engage with someone could become a life-changing connection. She and Warnsman, friends and colleagues of 15 years, proved how relationships built on curiosity, accountability, and action can lead to significant growth. As their session wrapped up, they reminded attendees that growth lies in seizing the moment, embracing discomfort, and taking intentional action.

Ten Key Takeaways:

1. Absorb and Act – Austin Tech Week isn’t just for passive learning; take action on the knowledge you gain. The key to growth is implementing new ideas, not just listening.
2. Embrace Discomfort – Growth often happens outside of the comfort zone. Feeling uneasy when stretching yourself is normal, but transformation begins in those moments.
3. Understand Your Personality—Tools like DISC and Enneagram help you understand your behavior, communication style, and how to work effectively with others.
4. Four Minutes to Connect – You have only minutes to make a memorable first impression. Use your unique personality traits, your “superpowers,” to stand out.
5. Action over Information—Avoid the “doing deficit” trap of continuing to learn without implementing. Don’t wait for the “perfect” amount of information to take action.
6. Use the 5-Second Rule – When an idea strikes, act on it within five seconds, or it might slip away. This could be jotting down a note or telling someone who will hold you accountable.
7. Networking as a Lifestyle – Think of networking as a way of life, not just an event. Building connections requires continuous effort and authenticity.
8. Be Mindful of Introverts – Not everyone is eager to speak up; pay attention to quieter ones, as they may have valuable insights to share.
9. Set Daily Goals – Focus on achievable goals rather than a long list of aspirations. Small steps lead to significant accomplishments.
10. Seize Every Opportunity – A single hello or connection could change your career trajectory. Be intentional in your interactions and open to what each moment might bring.

Jeff Eversmann has built a dynamic career that spans Silicon Valley startups, commercial real estate, and private equity. With expertise in technical and financial realms, Jeff has guided companies through transformative growth and strategic challenges.

Eversmann co-founded Long View Technology Ventures, investing in 12 tech startups since 2018, supporting innovation in Central Texas. Jeff also serves as an Adjunct Instructor at Concordia University Texas, teaching Entrepreneurship & Innovation.

His book, Fooled by Early Adopters, offers critical insights for first-time founders seeking to understand the path to product/market fit.  

These are the top insights from Eversmann’s talk on the Ideas to Invoices podcast. He offers a roadmap for early-stage entrepreneurs, especially regarding strategic decision-making and avoiding missteps with early adopters.

1. Inspiration for the Book: Eversmann’s book, Fooled by Early Adopters, was inspired by his desire to help founders understand whether they’re spending money effectively on marketing, sales, and operations in early-stage startups.

2. Focus on Product-Market Fit: The first book in Eversmann’s series focuses on understanding product-market fit, which he sees as the foundation for startup success. He emphasizes finding the right customer segments early on.

3. The “Early Adopter Trap”: Eversmann warns that early adopters often try products not necessarily because they are the perfect fit but because they enjoy experimenting. This can mislead startups into believing they’ve found their ideal customer, leading them down potentially unproductive paths.

4. Mainstream Market Transition: To scale beyond early adopters, Eversmann references Geoffrey Moore’s concept of “crossing the chasm,” stressing the importance of moving from early adopters to the mainstream market by aligning the product to broader customer needs.

5. The Importance of Focused Investment: For startups, it’s critical to ensure that resources are allocated to the right areas at the right times. Eversmann highlights the importance of strategic spending in marketing, operations, and finance as a company scales.

6. Avoiding Distractions from the Wrong Customer: Eversmann advises entrepreneurs to be cautious about customers who may not align with the product’s core mission. This can lead to feature creep and a loss of focus on the intended roadmap.

7. Testing and Validation with MVPs: He advocates using Minimum Viable Products (MVPs) to gather feedback but emphasizes that feedback must be filtered to ensure alignment with the product’s long-term vision.

For more, listen to the entire podcast interview posted below. It’s also available on Apple, Amazon, Spotify, iHeartMedia, or wherever you get your podcasts.

Jeff Eversmann, Author of Fooled by Early Adopters

Jeff Eversmann has built a dynamic career that spans Silicon Valley startups, commercial real estate, and private equity. With expertise in both technical and financial realms, Jeff has guided companies through transformative growth and strategic challenges. His MSEE, MBA, and CPA certifications, along with his experience in engineering technologies and securing early-stage investments, position him as a leader in navigating product/market fit.

Austin-based SweatPals has closed a $3 million funding round, led by a16z SPEEDRUN and Pear VC, in a significant milestone to drive the company’s mission of fostering connections through fitness.

Salar Shahini, Co-founder and CEO of SweatPals, announced the funding in a post on LinkedIn.

According to Shahini, the funding round holds special meaning, not only for the capital but also for the partnerships it brings.

“When we launched SweatPals 18 months ago, we drew deep inspiration from The Cold Start Problem and the incredible marketplaces we admire,” Shahini wrote. “To now be partnering with Andrew Chen, a 16z partner, growth expert, and the author who inspired us, feels like a full-circle moment.”

The round was also guided by Pejman Nozad of Pear VC, whose inspiring journey as a fellow immigrant resonates with Mandi Zhou, Co-Founder and Chief Product Officer, and Shahini.

“Pejman’s story of resilience and vision serves as a powerful reminder of what’s possible with determination,” Shahini wrote.

According to Shahini, this funding wouldn’t have been possible without the unwavering belief of early backers, including Warren Shaeffer, who has been a steadfast advocate of SweatPals from the beginning. He also gave a special thanks to Robin Guo, who played a pivotal role in making the round happen, and to early supporters like Jared Simon, Fardad Zabetian, Prerna Sharma, and Parham A., whose initial investment of $800K was essential in setting the foundation.

SweatPals was created to bridge divides and unite people of all backgrounds through the shared fitness experience. The platform’s AI-driven features allow users to connect with workout partners, discover training opportunities, and share their health journeys while fostering genuine connections. “Fitness is a space where anyone, from any background, can come together. We’re not just building this for our community; we’re building it with them,” Shahini wrote.

The new funding will power SweatPals’ growth as they expand their digital platform with more innovative features, strategic partnerships, and wellness initiatives. The team is also actively hiring, with open positions for those excited to shape the future of fitness and community engagement.

“Most importantly, to our incredible community: every creator, fitness entrepreneur, and member who has embraced the vision, shared it with a friend, or attended an event—you are the heartbeat of SweatPals,” Shahini wrote. “Your belief was so strong that you collectively invested $800K in the last round. We’re not just building this for you—we’re building it with you, and we’re grateful for every step of this journey together.”