Part of the secret to Austin's thriving clean-tech startup scene: mentorship

• Austin, Texas, is home to a number of clean-tech startups.
• Part of the secret, a longtime entrepreneur told Insider, is people's willingness to help others.

Rebecca Taylor refers to it as the "Austin throwdown."

Despite having pugilistic overtones, the phrase speaks to a vibe that's anything but: a palpable sense of community and volunteerism that Taylor, a longtime entrepreneur in the Texas capital, credits with helping keep the city's tech-startup scene spinning.

"You could also call it the Austin big hug — because that's kind of what it is," she told Insider.

Taylor, an executive in residence at the Austin Technology Incubator, said the years she and others have spent mentoring startup founders points to a culture that made the city a powerhouse of startups — particularly around clean tech.

She noted ATI, which is affiliated with the University of Texas at Austin, is the longest-running incubator in the US. Taylor said that back in 2001, the people in charge of ATI noticed there were a good number of clean-energy startups emerging in Austin but that there wasn't infrastructure to support them. To help the fledgling companies gain footing, leaders at the incubator set up a division focused on clean energy.

That early attention has helped the Austin region, which is home to some 2.2 million people, grow into a clean-tech powerhouse. ATI has helped shepherd companies like Yotta Energy, which helps commercial buildings incorporate tech such as solar, energy storage, and electric-vehicle charging. Another ATI graduate is Icon, which makes 3D-printed homes.

Taylor said that ATI's independent funding — it doesn't draw money from the university — has made the incubator "a very nimble lean, mean fighting machine with a friendly demeanor." That affable disposition includes some 75 mentors who work in teams of three to five. They share their expertise, whether it's technical or in areas like legal, business development, or sales, to help founders by offering advice and other insights.

"That is done on a pro bono basis. And they do it because they love it," she said. "This is very difficult for some communities to replicate."

This tech ecosystem is likely to grow, in part, because of stepped-up interest in green technology. The research firm HolonIQ found that VCs pumped $70.1 billion globally into climate-tech companies in 2022, an 89% surge from just the year before. In the US alone, investments in 2022 were so large that they surpassed all of the money put into the space for 2006 to 2011 combined.

Washington is also injecting money to the nation's clean-energy ecosystem. There are incentives through last year's Inflation Reduction Act, for example, for companies that produce clean-energy fixes and things like EVs.

And as for VC funding in general, the Austin area drew $4.95 billion last year through 416 deals, according to Pitchbook. Not all of those were on climate tech, though some recent funding has gone into green companies.

EnergyX, which runs its science operations out of the city, announced in April that General Motors led a $50 million investment in the company aimed at helping EnergyX develop its technology for extracting and refining lithium. The element is a key part of EV batteries.

"Lithium has never been needed like this before, so there hasn't been a lot of research and development," EnergyX founder and CEO Teague Egan previously told Insider. "I saw an opportunity to reinvent how it's produced. That's what got me excited."

Others are animated as well. Larry Fink, CEO of Blackrock, the world's largest asset manager, said in 2021 that the next 1,000 startups worth at least $1 billion would have to do with climate technology.

Egan was also an early investor in Tesla, which famously moved its headquarters from California to Austin in late 2021. CEO Elon Musk announced at the opening of the company's Giga Texas plant, which began operating in Austin last year, that the gargantuan facility would churn out more vehicles than any other plant in the US once it was fully operational.

Austin's clean-tech scene isn't only composed of household names. There's Hyliion, which is developing electric systems for powering commercial trucks. And Austin-based Incenergy helps businesses monitor energy use and cut their bills by as much as 30%.

But why do so many clean tech companies call Austin home? Part of the answer is the city itself. It has a well-known music scene, the South by Southwest Festival, and plenty of outdoor recreation. There's no state income tax. And there are already loads of tech workers, some of whom are now looking to startups focused on addressing the climate crisis following broader layoffs in the sector. That's poised to help clean-tech companies, according to recruiters, venture capitalists, and those who have shifted to working for green companies.

Austin has plenty of tech workers to choose from. Computing giant Dell is based in the Austin suburb of Round Rock. The biggest names in tech, including Apple, Amazon, and Microsoft, also have operations in the area.

Taylor, who's lived in Austin for 38 years, has been part of the Austin startup scene since 1991. She said the decades of investments the community has made in tech combined with the willingness of local talent to help other founders has made the city what it is.

"It's done from a desire to be a contributing member of the Austin community," she said of the volunteerism. "It's just viewed as a universally good thing."