When you think of Fort Worth, TX, many think of the Stockyards, Cowtown, and “Where the West Begins.” People naturally associate Fort Worth with the oil and gas industry. However, one thing that is not top of mind here is entrepreneurship. When people think of Texas startups, they immediately think Austin, and then maybe Dallas or Houston. But why is that? Fort Worth is now the 13th largest city in the nation, boasting one of the strongest local economies in the country and a high quality of life, and yet our entrepreneurial community lags far behind most all of the similarly sized cities in the US. However, amid the economic downturn brought on by the COVID-19 pandemic, there is an incredible opportunity to foster a newfound startup culture that can propel our city into a prosperous economic future.
Recessions and Bear Markets are Good for (New) Business
According to research from the Kauffman Foundation, more than half of all current Fortune 500 companies started during an economic recession or a bear market. One might be tempted to think this statistic only applies to a certain subset of the most successful companies in the world. However, some of the most successful Fort Worth businesses such as American Airlines (1930), Bell (1960), Alcon (1945) and Galderma (1981) were all started during recessions. If we look at just the last recession, revolutionary companies like Airbnb, Github, Slack, Uber, WhatsApp, Square and Stripe were all started during the recession of 2008-2009, just a mere 12 years ago. These seven companies now have a combined market capitalization of $153 billion, which is more than local companies American Airlines, Bell, Alcon and Lockheed Martin… combined! What’s more, these tech companies employ over 42,000 people which is similar to the total employment of Fort Worth based BNSF.
Fort Worth VC Funding: How do we stack up?
When we compare Fort Worth’s startup funding to cities with a similar population, the numbers are bleak. As seen in Figure 1, from 2017-2019, early stage startup companies in other cities have all raised more capital than Fort Worth. The numbers don’t get much better when we compare Fort Worth to other large Texas cities. Over the same time span, Houston has raised a total of $656.7 million, San Antonio has raised $172.4 million, Dallas has raised $485.5 million, and Austin has raised $2.6 billion.
Reasons for Optimism
Although the current entrepreneurial environment of the Fort is underperforming, there is no reason to believe we as a city can’t drastically improve our startup landscape. Although economic downturns don’t seem to be ideal times to start a business, history and data would tell us otherwise. This pandemic has crippled our local, state, national, and global economy, but it is now time to pick up the pieces and start over and startup. Our great city has the resources and the expertise to help any ambitious Fort Worthian start the next great company of the future, but it is our responsibility to take advantage of such assets.
Stay tuned to the Sparkyard blog to stay informed of all the exciting ideas and initiatives that Fort Worth can pursue to jumpstart our entrepreneurial ecosystem.
If you want to read more about entrepreneurship’s role in Fort Worth’s economic recovery, check out the Op/Ed written by Cameron Cushman, Director of Innovation Ecosystems in UNTHSC’s Department of Research Development and Commercialization, and Les Kreis, managing partner and co-founder of Bios Partners, Fort Worth’s only venture capital firm.