Texas Startups: Carta’s 2025 Early-Stage Report
Texas continues to climb the ranks as one of the top startup ecosystems in the United States. A new report from Carta and Clutch VC highlights how founders in the Lone Star State are raising capital, competing nationally, and shaping the future of early-stage investing.
Texas by the Numbers
Top 5 Hub: Austin ranks 5th in the nation for total startup capital raised, behind only the Bay Area, New York, Los Angeles, and Boston.
Pre-Seed Momentum: Texas consistently places among the leaders in pre-seed fundraising, with Austin, Dallas–Fort Worth, and Houston generating steady deal flow.
Seed Stage Strength: While California and New York remain dominant, Texas has maintained strong seed-stage activity across its major metro areas.
Fundraising Trends
Competitive Valuations: Texas seed-stage companies are raising at valuations of $12–15 million, in line with coastal peers.
Graduation Gap: Only 19% of Texas startups that raised a seed round in 2022 had reached Series A by 2024—down sharply from 36% in 2019.
Investor Appetite: Larger pre-seed rounds in Texas often involve more investors than in other states, signaling strong competition for early opportunities.
Sector Focus
Texas startups attract capital in sectors that reflect the state’s unique strengths:
Hardware – 40% of VC dollars
SaaS – 24%
Energy – 12%
By contrast, California leans heavily toward SaaS and biotech, and Massachusetts toward biopharma.
Takeaway
Carta’s report makes clear that Texas is no longer just an “emerging” startup market—it’s a national leader in early-stage capital formation. For founders, the challenge will be not just raising initial rounds, but successfully navigating the tougher climb from Seed to Series A. For investors, Texas offers fertile ground across hardware, SaaS, and energy, with valuations that remain competitive nationally.
At Scale LLP, we help founders and investors capitalize on these opportunities—structuring deals, protecting equity, and building for growth. If you’re looking to launch, invest, or scale in Texas, we’d love to talk.
This client alert is for informational purposes only and does not constitute legal advice.