Quentin Crawford’s idea for his business, The Good Jerky, was born inside a Bucee’s gas station as he was looking at a big wall of beef jerky.
Crawford was working as an electrical engineer at the time for Oncor Electric Delivery and was traveling often. He and his wife had recently become pescatarians, and he was dissatisfied with the available healthy snack options.
“I never got full from nut bars, fruit bars, any of that type of stuff,” Crawford said.
But when looking at the big wall of jerky, the lightbulb went off: Make jerky out of smoked salmon. Now, Crawford is running The Good Jerky as a full-time job and the jerky can be found in major retailers such as Central Market and Kroger. He said he needs funding to expand the business further, but finding resources and funding in Fort Worth was a challenge. So, he looked elsewhere.
He got accepted into an accelerator program by Deep Ventures in Dallas, where he won a $15,000 grant to help his business. He is searching for more investors in Dallas.
“Fort Worth has a lot of people with a lot of money, but you just don’t know about those folks, because the ecosystem isn’t really consolidated out here,” Crawford said. “Whereas you go over to Dallas, they have a strong investor network.”
Crawford’s experience of finding funding within Fort Worth is common. Fort Worth lags behind other major cities in early-stage funding for businesses.
From 2015 to 2020, the average amount of early stage capital raised in Fort Worth is $17 million, according to data from Sparkyard. That’s much less than the neighboring city of Dallas, which averaged $236 million, and Houston with $161 million.
The lack of early-stage funding has caught the attention of city officials. Fort Worth District 7 council member Leonard Firestone, who is the chair of the city’s entrepreneur and innovation committee, described the lack of early-stage investment as an issue in past reporting by the Fort Worth Report.
Without making any sales, getting a loan from a bank is difficult, Firestone said. That’s why many businesses turn to equity – such as venture capital, angel investors and seed funding.
“We need to do a better job at either bringing the capital here, or reaching out to where that capital lives, and have those venture firms or private equity firms invest in companies here,” Firestone said.
Why early stage capital matters for startups and Fort Worth
Andrew Hicks, principal at RTL Capital and a program manager for the Horned Frog Investment Network at TCU, said the type of early-stage funding depends on the type of business. If it’s a small local business like a restaurant, for example, there are more traditional routes such as loans, family and friends. Venture capital is typically for companies that want to aggressively expand and need more money to start.
Types of funding for businesses
Rodney D’Souza, the managing director of Texas Christian University’s Institute for Entrepreneurship and Innovation, explained the three common types of outside funding for starting a business:
- Debt equity means getting money as a loan from a source such as a bank.
- Grants are money business owners don’t have to pay back. They can come from organizations, or the local, state and federal government.
- Equity involves giving up a part of the company to an investor for money. Typically, that starts off with getting monetary support from friends and family and then turning to investors who have particular requirements on where and what kinds of investments they are making.
“That’s kind of the one thing that we typically see, you know, getting the headlines and things like that,” Hicks said. “Because they are kind of moonshots, a little bit more exciting … someone aggressively pursuing a high potential type of opportunity that’s going to need, you know, a decent amount of capital to kind of fund and fuel their high growth potential.”
For Elyse Dickerson, the co-founder of Biotech company Eosera, the business started with its own money for the first nine months. After that, Dickerson and her co-founder, Joe Griffin, wanted to get money from a bank, but couldn’t find a bank that would give them a loan.
“It was still seen as high risk, you know, first-time entrepreneurs,” she said. “And so banks were actually our first stop, and they said no.”
They found their first batch of funding by winning a pitch competition in Dallas for $50,000. Winning the competition opened the doors for them, she said – she started getting calls from people asking if she was taking investments.
She raised $1.2 million in her first round of funding mostly from people she knew and received advice from friends familiar with investing to negotiate terms. There’s money in Fort Worth, Dickerson said, but it’s not going toward early-stage startups. She said there needs to be more education around how to invest in that arena to remove the intimidation factor.
“It’s very different than investing in oil and gas or real estate,” Dickerson said. “The due diligence process is very different.”
Hayden Blackburn, the executive director of the tech incubator Tech Fort Worth and executive director of the angel investing group Cowtown Angels, said limited investment might deincentivize startup owners to form and start new businesses in Fort Worth.
“If a key piece to growing a company, or many types of companies is funding, and you have a limited availability of it in a scarcity of it, then you’ve created friction for founders to launch, start and grow their companies in your city,” Blackburn said.
Dallas has more money being invested and more organizations that are focused on investing, Blackburn said. Cowtown Angels has gotten as large as 55 members at one point. But it should be larger, he said, and word of mouth only goes so far, he said.
“There’s no reason that the angel group in your local community doesn’t have 70, 75 members within it,” Blackburn said. “But we don’t have a giant budget for marketing, and word of mouth is our great kind of thing.”
Les Kreis, the managing principal at Steelhead Capital and co-founder of Bios Partner, said Fort Worth has a chicken-and-egg problem. There’s not enough investment in early startups, but there’s also not a robust number of startups in Fort Worth.
“It’s hard to have more startups if there isn’t investment capital,” Kreis said. “And it’s hard to have investment capital if there aren’t more startups.”
Kreis is advocating for boosting the tech industry in Fort Worth. He points to data by the National Venture Capital Association pulled from PitchBook that shows that, out of the $342.2 billion invested in 2021, 87% is in some form of technology – $298.8 billion.
Kreis said he thinks the Texas A&M’s Research and Innovation Center being built in downtown Fort Worth will be a game changer for the city for building up the startup community.
Fort Worth has a tech incubator, Tech Fort Worth. Also, the first Fort Worth Techstars Physical Health Accelerator will recruit 10 businesses from around the country to move to Fort Worth for three months to develop and pitch their ideas to investors like venture capitalists, angel investors and foundations, according to prior reporting by the Fort Worth Report.
The city of Fort Worth, in a gesture of welcoming more technology, is also mining its own Bitcoin.
For some in the biotech industry, Fort Worth is a good place to stay. Ranjan Misra, business adviser for the immunotherapy company AyuVis Research, said there’s world-class resources for companies in the health science space in Fort Worth, while having access to investors across North Texas.
The company is currently raising $16 million to fund the first phase of clinical trials and a proof of concept.
The company has been able to save money while in Fort Worth, operating out of the University of North Texas Health Science Center, and considers it a best-kept secret.
“We’ve had pharmaceutical partners come in, look at this and go, ‘Wow, you guys have labs that are comparable to a large pharma company,’” Misra said. “It’s not just available to us. It’s available to everybody else that wants to, you know, become a part of this ecosystem.”
Entrepreneurs such as Crawford, making salmon jerky, said too much focus on tech can alienate people in Fort Worth who have other big ideas. Crawford said he loves the slower pace of Fort Worth. But he has to follow where the opportunity is.
“I’m hoping that opportunity presents itself here,” Crawford said.
Seth Bodine is a business and economic development reporter for the Fort Worth Report. Contact him at firstname.lastname@example.org and follow on Twitter at @sbodine120.