FounderBuzz

Scott: Hi, this is Scott Olson with FounderBuzz, and I'm here to Teo Tijerina with EDCO Ventures. Thanks for joining us today.

Teo: Thank you, Scott. Thank you for having me.

Scott: Now, you're the co-founder of EDCO Ventures, but why don't you start out by telling us a little bit about your background and what you do.

Teo: Okay. My training is in engineering. I'm a chemical engineer. I worked in industry for a few years, and I started a company when I used to live in El Paso with some of co-workers, a manufacturing company. Then I became very interested in economic development. I went to graduate school at UT El Paso, and I enrolled in a Master of Arts in Interdisciplinary Studies, which basically meant you could design your own graduate degree. So I took courses in political science, history, sociology, but always with a twist of looking at economic development, and that was part of my passion.

That led me, when I moved to Austin in 2004, to co-found with Leo Ramirez EDCO Ventures. We are an organization that works with distressed communities that have enough of an infrastructure to support a more sophisticated economy. We work with them on being a catalyst and being a bridge to innovation zones and helping them launch their own high growth innovative companies.

Scott: Do you do that by putting money to work or using your expertise, or how do you do that?

Teo: We do it in three areas right now. Initially, we started off with just two. One was micro-investments in some of those companies and also with the incubator model, which is a coaching technical assistance with financial modeling, introducing them to capital networks, and so forth.

We're now, as an organization, moving towards becoming also a financing institution. So we are in the process of launching our own community development venture capital fund.

Scott: Okay.

Teo: Focused on these same areas, because we are seeing in the course of our work that risk capital is missing.

Scott: Right. You work with entrepreneurs basically helping them get their businesses off and running with both capital and expertise?

Teo: Exactly, yes.

Scott: When you work these entrepreneurs, when you're talking micro-capital, what does the background of these people look like as opposed to maybe a more traditional venture-backed startup?

Teo: It's a little more challenging. The deal flow out of the communities is obviously not there. We're there to help create deal flow. We're looking for people that are passionate about entrepreneurship, but we're saying, "Why start a dry cleaner? Why don't you look ahead?" You are a professional, you have skills, you've been working in the sector. We want them to think beyond what they've normally been seeing in their communities. They, in many cases, don't have the knowledge of how to maneuver in angel circles, VCs, what these folks are looking like. We spend a lot of extra time on the coaching side, as opposed to like, for example, an incubator in a community like Austin. One of their coaches can handle probably two or three times more companies than one of our coaches can, just because the amount of attention. Someone here in our community needs it a lot less, given the ecosystem that exists here.

Scott: Right. Well, I think it's great what you're doing, and I think it's certainly an interesting model for addressing economic deficiencies in other areas. I wish you the best of luck, and thanks for joining us today.

Teo: Thank you.