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Consumer Packaged Growth Funds is a brand new investment syndicate on Angelist, managed by Jeff Jacobs and Marc Nathan that will primarily invest in early-stage emerging CPG brands. If you’re an angel investor looking for VIP access to new opportunities, please apply to join here:CONSUMER PACKAGED GROWTH. Austin Business Journal ARTICLE

Texas-Squared 400th Issue

Welcome to the 400th issue of the Texas-Squared Startup Newsletter. Each one of those little Texas logos in the graphic above represents approximately 250 hand-curated articles each week, which means about 100,000 links over the almost eight years of publication. I’ve had many people ask how long it takes to piece it all together every week and I’ve gotten it down to roughly five hours. 400 issues X 5 Hours is 20,000 hours or twice the ‘legal limit’ of 10,000 hours to become an expert. While I don’t feel exactly like an expert, I do have a few lessons learned about publishing a weekly newsletter and covering the startup community in the great State of Texas:

Know Your Audience — the Texas-Squared Startup Newsletter is for founders, funders, and service providers to understand what’s happened in the previous week. My driving mantra is ‘Be Helpful’ and that forces me to make sure I’m selecting the right articles for my reader. I have a fictional startup founder/venture professional reader in mind for every article I include and if it’s not relevant to these personas, I cut it. In my mind, this reader opens the email over their Sunday morning coffee and skims the headlines, clicking on an occasional link or two that they wouldn’t find in their ‘regular’ data diet. These little gems come from Press Releases, Twitter, LinkedIn, Facebook, and more recently, Instagram — not to mention all of the kind people that email me with their own news.Niches Make Riches — if you’re going to start something, it’s better to pick a lane and focus on it instead of trying to cover everything. Texas + Startups = large target audience, but specialized interest. Anyone can read national mainstream articles, so I concentrate only on news that might matter to local audiences. I started the Texas-Boxed CPG Newsletter five years ago because I realized that CPG and Tech startups are different enough that blending the two doesn’t serve either audience.Consistency Counts — Same format, same subject line, and most importantly, same send time creates an expectation for both me and my audience. It’s a discipline that takes some adjustment, but adding the issue number to the subject keeps me focused on my currently years-long unbroken streak and drives me to continue.Automate When Possible — I review about 800 articles per week through a feed reader and my own social channels. I’ve written a couple of macros that help with formatting, I changed my mouse settings to use buttons for cut-and-paste, and I’ve got my feed reader tweaked to make it easy to pull the right articles. The one thing I can’t automate is the editing and selection process — no virtual assistant, intern, or ChatGPT tool can select Texas Startup news the way I do (yet). That means it’s me in front of a screen until the tech catches up. I’ve been on Mailchimp since day one, but I’m looking hard at other options and a few years ago I published 5 Rules for Starting an Email Newsletter on how to start a newsletter like this and I’m very proud to see Matthew Prisco launching the Nashville Venture Newsletter last year who told me that it was one of his inspirations.Don’t Take It Personally — This is the hardest lesson I’ve had to learn over the last few years — no one will read your newsletter top to bottom every week and you have to accept that. I used to get angry at the one or two Unsubscribes I see every week, no matter how many hundreds of people read the same issue. People move on to different industries or states, stop caring, or simply don’t want to feel overwhelmed by their inbox. Every unsubscribe still stings, but you have to think about who is still reading.

The Texas-Squared Startup Newsletter has been extraordinarily beneficial to me personally — it’s directly responsible for me landing the best job I could ever have with Egan Nelson and keeps me top-of-mind in the community I serve. What started as a simple sweep of all my open browser tabs has opened doors to opportunities I would have never discovered if I kept all of the news and events to myself. I want to sincerely thank all of my sponsors, supporters, and readers over the years — you keep my going and I think that we’re just getting started. I’m always looking for criticism (constructive and especially negative) and ways to improve, so I genuinely appreciate your feedback — marc+newsletter@tsquaredagency.com

Newchip Enters Into Bankruptcy Liquidation — Link– Silicon Hills News’ Laura LorekAustin startup accelerator Newchip collapses amid bankruptcy case, takeover attempt — Link– AustinInno’s Brent Wistrom

All startup communities have grifters and rent-seekers that prey upon vulnerable and na?ve first-time founders. This can take the form of bad or uninformed ‘advice’ from so-called mentors, predatory lenders (including some low-rent Venture Capitalists), independent consultants that promise investor introductions but aren’t FINRA registered broker/dealers, and even established higher education offering ‘certifications’. You tend to see a spike in these activities at the tail-end of an economic cycle like we’re in now. Every industry has good and bad players — statistically 50% are below average and truthfully most of them mean well, they’re just not positioned to produce repeatable success.

Entrepreneurs that worked with the Newchip program waking up to the fact that they are now out of time, money, and reputation because of the flaming trainwreck that it turned out to be based on their recent bankruptcy filings and the post that their founder made public this week.

I’m sure that Newchip did try to help some founders, especially early on, and maybe made a few introductions that mattered. Those positives are completely overshadowed by the fact that the entire premise of paying for introductions is fundamentally flawed. The problem is simply that the business model of ‘Pay to Pitch’ NEVER turns out well for entrepreneurs. If you’re a startup that has to hire a third party to pitch your business to so-called investors (who are usually neither accredited nor have any intention of investing) it’s a bright red flag to more legitimate capital allocators. No serious investor is going to want to be on the cap table alongside a predatory program and most investors are looking for any reason to say ‘no’ because the opportunity cost to work with a winner is too high to help fix a poor decision by a desperate founder. Top-tier incubators and accelerators can offer tremendous value in exchange for equity, but ones that have a cash payment component are invariably focused on keeping their own lights on, not supporting their client startups. I can’t count how many people I steered away from this organization and now that it’s finished, I feel the freedom to say publicly what I was saying privately to friends and clients ‘Run, don’t walk away from these guys’ and that scenario happened as recently as a couple of weeks ago. The real reason I and others in the community couldn’t say anything is like a journalist friend told me, “I can only report on the plane crash, not that the plane is going down”.

Their sales machine was evidently populated by very young, first-time job holders and I don’t believe that they knowingly tried to hurt anyone. They were doing their job (collecting as much cash as possible) but it was all directed by the leader(s) of Newchip. They were trained to be like the guy who walks up to a teenager at the mall claiming that they should be a model, but when they follow up with the ‘agent’, they are immediately pressured to pay for headshots and modeling classes. Newchip had the same vibe: reaching out (multiple times) and flattering startups about their business, giving them validation and pretending that they were ‘accepted’ into the program by some mysterious high-level executive with all kinds of investor connections. It’s a textbook grooming playbook. An even darker take is that programs like Newchip were ‘Digital Coyotes’, leading startups across the river only to abandon them in the desert halfway to the border.

The Hot Take that’s going to get me in trouble is that everyone who said yes and paid what I’ve heard up to $14,000 is that they should have known better. They were entrapped by a sales pitch that seasoned founders knew was too good to be true. In my opinion, Newchip wasn’t a ‘scam’, it was a ‘hustle’ — like playing Three Card Monte in a sketchy neighborhood, you know it’s rigged but you think you can beat the system. That said, the vast majority of Newchip clients got a harsh and expensive lesson on listening to their initial instincts and hopefully learned that the only way to win that Three-Card Monte game is to not play at all. I don’t want to blame the victims, they were assured that everything was on the up-and-up but they wanted to believe the empty promises that they were special.

The difficult truth is that no one put a gun to anyone’s head and forced them to start a company. It takes a certain kind of personality to succeed in a startup and our ‘Innovation Industry’ tends to attract traditionally unemployable weirdos (I am one, so I relate). Startups are a contact sport so investors and competitors quickly learn to throw elbows, especially when the referees (i.e. regulators and law enforcement) are looking the other way. Founders had better learn to play in that environment or end up getting pushed to the sidelines. Incubators and Accelerators are supposed to protect and guide their startups, but what happens in the rare case when your coach is your abuser? I do feel empathy for the startups that paid for Newchip’s services because they innocently believed the transparently phony promises of their relentless, boiler-room style sales apparatus. They clearly felt like it was their only option because they don’t come from wealthy families or have name-brand school connections — this is the exact point where they get sold the dream by organizations like this one.

One thing that needs addressing is that I hope that these former employees find other work soon and that having Newchip on their LinkedIn won’t be an automatic pass from new employers. I admit that I have a hard time talking to people that worked there because I wonder if they knew what was happening at the top. What I’ve come to realize is that they were duped as well and by the time they figured it out, their salaries and reputations were already on the line. I remember the days right after the Enron collapse in Houston when jobseekers realized that the crimes of the executives put a black mark on their resumes without them knowing it for several years. Some people would hesitate to hire a brilliant medtech employee if they worked for Theranos — it’s not ‘fair’, but it’s the reality of a tough job market.

Every entrepreneur I’ve ever met is an optimist at heart and wants to believe in the good in others. This makes them especially susceptible to these kinds of ‘services’. I get very angry when I hear about any founder being exploited so knowing that over 3000 entrepreneurs fell for this concept gets me particularly upset. If you lost money and time with this program, consider it a rite of passage once you process that you were tricked. All that matters now is that the founders dust themselves off and get past the adversity of hitting this business pothole — luckily overcoming bad situations is what great entrepreneurs do as naturally as breathing.

Jason Kirby’s LinkedIn Thread — read these comments, they are eye-opening.

Full Disclosure: I was a mentor at Newchip and did a podcast for them several years ago but haven’t spoken to them or been involved in any way since long before the COVID lockdown.

Consumer VC Summit Dallas Future of Retail

Mike Gelb and Marc Nathan are gathering leaders in the CPG industry to share insights and trends in the consumer investing landscape.

People are the cornerstone of the CPG industry and the Summit will host successful founders to tell their insider stories to our invite-only audience.

We’re booking the industry’s top investors to discuss what they are experiencing and share lessons learned on the current investing environment.

Networking was the number one most valuable part of our past summits and this one will allow our attendees an opportunity to connect with others in the CPG community.

The Consumer VC Summit Live Dallas 2023May 23rd 2:30pmRevTech Ventures311 N Market St #200 Dallas, TXhttps://consumervclivedallas2023.splashthat.com/

Cyber/Privacy/Data Compliance Executive Workshop

Join us on May 17th for this non-technical, intimate executive workshop for practical ways to build an effective information security and privacy program.

By attending this workshop, you will walk away with a clear roadmap for taking cybersecurity and privacy compliance from a hindrance to a competitive advantage for your business.

The workshop will provide knowledge of cybersecurity and privacy legal requirements. It includes interactive sessions and practical case studies to provide attendees with hands-on experience in building a resilient cyber culture to survive and thrive.

Who should attend:Leaders and Directors facing information security, privacy and compliance issues.

Wednesday, May 17th 8:30 am to 12:00 pmCBI Group ShowroomREGISTER

San Antonio Startup Day

San Antonio Startup DayWednesday, May 24th 8:30 am — 8:30 pmGeekdom110 East Houston Street, #8th FloorSan Antonio, TX 78205REGISTER

Introducing the Seaplane Venture Fund — LinkAustin’s Next Innovation Hub: The Vision Behind the University of Austin with Pano Kanelos — Link– Austin Next PodcastDo You Need Venture Capital to Build a Business? — Link– Silicon Hills News’ Laura LorekUT Austin Seed Fund Invests in Austin Startup ClearCam — LinkCoalition Will Build Energy Innovation Hub in Permian Basin — LinkThe Economics of Education, or Exploring the Multiverse — LinkMcCombs Dean Named 2023 Outstanding Accounting Educator — Link– Austin MonitorThis Austin Company Helped Me Record My Mother’s Life Story — LinkNominations are Open for Best of ATX 2023 — Link– Austin Monthly MagazineUT Austin Seed Fund Invests in Austin Startup ClearCam — LinkCoalition Will Build Energy Innovation Hub in Permian Basin — LinkThe Economics of Education, or Exploring the Multiverse — LinkMcCombs Dean Named 2023 Outstanding Accounting Educator — Link– University of TexasUnlocking career success: The crucial role of mentorship — LinkCar horn honk usage is becoming limited in California — LinkElon Musk settles defamation suit despite previous claims he’d never settle — LinkSports and fitness industry reports promising post-pandemic growth — Link– The American GeniusGopuff Goes Beyond Instant Delivery to Offer Long-Term Community … — LinkAustin Tech Built Momentum in April. These 3 Companies Are … — LinkFintech Platform 8fig Raises $140M Series B Round — LinkLeanDNA Ranks Among Highest-Scoring Businesses on Inc … — LinkStanding Out in a Crowded Inbox: How 2 Sales Pros Write Cold … — LinkAutonomize AI Got $4M, Integrous Was Acquired, and More Austin … — Link– Built in AustinDisco to cut workforce by 8% in second round of layoffs — LinkEV supplier CelLink in line for $362M federal loan — Link86 finalists in running for Austin Under 40 Awards — LinkTexas may establish new court for businesses — LinkJournal Profile: Even on golf course, economic development maestro Dave Porter can’t escape Williamson County’s boom — LinkHow UT sports stars, businesses are cashing in on billion-dollar NIL industry — LinkNominations wanted for Austin’s Best CFOs — LinkACL Music Festival’s economic impact climbs 21% — LinkTesla holds groundbreaking ceremony for lithium refinery near Corpus Christi — Link8fig raises $140M to lend to e-commerce businesses — LinkConserving cash, searching for opportunity: How Austin small businesses are handling uncertain times — LinkFirst phase of multibillion-dollar data center campus could open in Hutto in late 2024 — Link15 names to know on Austin’s tech and startup scene — LinkContract manufacturer for Hopdoddy, Pluckers opens factory in Kyle — LinkFunding wrap: Fedi, Autonomize, Inbanx have fresh cash — Link– Austin Business JournalAustin-based startup 8fig scores $140 million for growth — LinkTesla breaks ground on Corpus Christi-area lithium refinery — LinkPrologis, Skybox to develop 600-megawatt data center campus in Hutto — LinkFeds set to loan $362 million to help fund Georgetown facility — LinkIBM to move Austin workers to new campus in Domain by 2027 — LinkConstruction begins on sites for two new buildings on Capitol Mall — LinkTuesday Morning will close 200 stores in 25 states. Here are 7 locations near Austin — Link– Austin American-Statesman