FEATURE-Startups jostle for funding, attention at South by Southwest

Tue Mar 11, 2014 11:55am EDT
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By Sarah McBride

AUSTIN, Texas, March 11 (Reuters) - Entrepreneur P.K. Fields was delighted when she won a contest and a chance to pitch her Los Angeles-based startup to a venture capitalist.

So delighted, she dropped everything and flew 1,400 miles (2,250 km) on her own dime to the South by Southwest Interactive conference in Austin, Texas, for just 20 minutes alone with angel investor Dave McClure as he was driven around town in a tiny red-and-black electric BMW i3.

Fields is emblematic of the thousands of entrepreneurs who converge on Austin each year, hoping to rub shoulders with venture capitalists and win funding for their companies amid the current startup boom.

Despite long odds, many hope to replicate the success of past "South-by" standouts such as Twitter Inc in 2007.

It's rare to find so many would-be startup investors in one place at the same time; rarer still to catch them in a casual setting removed from the pressures of Sand Hill Road, the California locale known for its cluster of venture capital firms.

But that convenience comes with a price: The growing volume of startups today at South by Southwest, or SXSW as many call it, engulfs both the startups and their audience.

Since Twitter, "South-by" success stories have been hard to come by. Many entrepreneurs and venture capitalists say that going to Austin and trying to clinch funding after meeting a potential investor for the first time just doesn't work.

"It's kind of like the great white whale of Austin," said Ethan Kurzweil, a partner at Bessemer Ventures, likening finding an investment-worthy company at the conference to Ahab's elusive prey in Herman Melville's novel "Moby Dick." "Everyone goes thinking they'll see it, but no one does."   Continued...