Texas Ain’t Silicon Valley — and thank the good Lord that’s true. But seriously, that reality is both a challenge and an opportunity.
Lately, I’ve been reflecting on my time building @LYX and my previous startups — not just on what I’ve learned, but on what I’ve had to unlearn along the way. My undergrad and graduate program from the greatest institution on earth, TCU, definitely gave me the frameworks I was looking for. But the real world gave me the scars — and it continues to give me a whooping.
The gap between what I thought entrepreneurship was and what it’s actually like is wider than any classroom could ever show. So I’ve decided to start sharing a few of those lessons publicly — to help current and future entrepreneurs here in North Texas. Maybe that even turns into a guest lecture at @TCU one day.
(@Chico — let’s make it happen.)
Before getting into the lessons, here’s some context folks outside of Texas might not realize.
DFW (I live in Fort Worth a.k.a. Funkytown, a.k.a Cowtown) is home to roughly 8.3 million people. That’s bigger than 38 U.S. states. It’s massive.
Our economy ranks #5 among U.S. metros, ahead of DC, Boston, Houston, Atlanta, and Seattle. With roughly $745 billion in economic output, DFW alone would rank among the top 25 economies in the world if it were a country.
And Texas has never shied away from risk or innovation
@Texas Instruments’ Jack Kilby invented the integrated circuit in 1958, laying the groundwork for every computer chip in use today.
Ross Perot built Electronic Data Systems, effectively pioneering IT outsourcing decades before anyone started throwing around the term “tech stack.”
Sam Wyly essentially commercialized computing when he founded University Computing Company in 1963 — helping turn the internet from a research tool into a business platform and paving the way for the connected economy.
And everyone is a fan of @Landman, so you already know about Texas legendary oil wildcatters — people who built fortunes and entire industries by taking swings that others wouldn’t dare.
Texas knows how to bet big.
But when it comes to venture capital — especially at the early stage where I operate — that same wildcatter energy hasn’t fully carried over.
According to PitchBook, Texas accounted for an infinitesimal 3% of all U.S. VC deal value in 2024, while California, New York, and Massachusetts combined for nearly 60%. Let that sink in.
We’re a top-five economic powerhouse, yet DFW only saw about $1.3 billion in VC funding last year. For context, that’s compared to roughly $60 billion in the Bay Area and $45 billion in New York.
That’s not just a gap. That’s a canyon.
That’s not just a gap. That’s a canyon. There are bright spots, of course. @SKU, @Morrison Seger, and @Redbud Brands stand out for writing checks, rolling up their sleeves, and doing the work. Those are the ones I know personally — and I’m sure my blind spots are big, so please drop a mention on others who are writing early checks (not B or C rounds, early checks).
Broadly though, “venture” in Texas often feels more like a title than a behavior. Even @SVB has pointed out that many funds fly in, scout deals, and then fly right back out. Texas is one of the best places in the country to find opportunities.
It’s just not always a great place to raise from. Now why is that? There’s plenty of capital here, but most of it prefers industries like real estate, healthcare, or private equity — not pre-revenue startups with a high probability of going to zero.
In Silicon Valley, betting it all is a badge of honor. Here in Dallas–Fort Worth, it’s often viewed as reckless. To be fair, a handful of North Texas investors are trying to change that, and I’m lucky to call some of them both backers and friends.
If you’re raising capital in Texas, you’ll quickly learn the difference between OPM and MOM
If you’re raising capital in Texas, you’ll quickly learn the difference between OPM and MOM — "other people’s money" versus "my own money." That distinction defines the local risk appetite. Many “funds” here are really family offices in VC clothing.
The largest, @S3 Ventures, is itself a family office. That’s not necessarily a bad thing — it just means founders need to understand which game they’re playing. Bottomline, securing MOM is far more difficult than OPM.
That dynamic shapes everything from diligence to decision speed.
Texas ain’t Silicon Valley — and it doesn’t need to be. We just need more SKUs, MorrisonSegers and Redbuds leading the way!
This newsletter is meant to be a springboard for building the right way — outside Silicon Valley, without the noise.
Consistency beats hype. Execution beats applause.
Adios,
Dylan