I walked into the YETI flagship store in Austin tonight expecting a standard networking event. What I got instead was a front-row seat to history in the making. Jeff Karcher, Global Managing Director of the Texas Stock Exchange, laid out a vision that's been years in development but is only now coming into focus. This isn't just another stock exchange. This is about breaking a 50-year duopoly and creating real choice for companies.

As a Regional Cohort Leader for Birthing of Giants, I spend my time helping entrepreneurs improve company value, increase profitability, and scale more effectively. What I witnessed tonight reinforced something I've been seeing: Texas is becoming the ideal environment for companies serious about scaling.

Let me share what I learned, why it matters, and what it means for anyone building a business in Texas.

The Unlikely Origin Story

The Texas Stock Exchange didn't start as a carefully planned strategic initiative. It started with a threat.

In 2020, facing budget shortfalls, legislators in New York and New Jersey floated the idea of repealing a tax rebate on financial transactions that had been in place since 1981. The original financial transactions tax dated back to 1901, but for nearly 40 years, there had been a 100% rebate on it. Taking away that rebate would generate an estimated $35 billion in tax revenue, but it would subject every single public company in America to this tax, regardless of where they're headquartered or where they do business.

The CEOs of NASDAQ and the New York Stock Exchange saw the writing on the wall. Adena Friedman from NASDAQ and Stacey Cunningham from NYSE flew to Austin and met with Governor Abbott. Their question was simple: if this tax goes through, can Texas handle our operations?

Governor Abbott's answer was quintessentially Texan: "Absolutely. We've got data services, power, infrastructure. We can have you up and running Monday morning." But then he asked the more interesting question: "Why don't we just build our own stock exchange?"

The immediate crisis passed. COVID hit, and the Northeast shelved the tax idea. But in Governor Abbott's mind, the seed had been planted. Why couldn't Texas have its own stock exchange? The state already had a substantial and growing financial services industry, particularly in Dallas. The infrastructure was there. The corporate base was there. The question was whether the industry would support it.

Governor Abbott reached out to Jim Lee, who would become the founder and CEO of TXSE. Over the next 18 months, Lee had conversations with every major player in the financial services industry. The response wasn't just positive. It was enthusiastic.

Follow the Money

When you look at who decided to invest in TXSE, you understand the magnitude of what's happening.

BlackRock, the largest asset manager in the world, became a founding investor. Citadel, the largest trading firm in the world, which handles one out of every four shares traded anywhere globally, came on board. Charles Schwab, the largest retail brokerage firm in the world, joined as well. According to Jeff, another major firm has agreed to come public with their investment soon.

These aren't companies making speculative bets on long shots. These are the most sophisticated financial institutions in the world seeing an opportunity they couldn't ignore. They saw what TXSE was planning to do differently, and they wanted to be part of it.

On September 30th, after a 270-day SEC review process, TXSE received official approval. The filing they submitted, Form 1, was 4,300 pages long. Jeff joked that if you're having trouble sleeping, you can read it online. Even he admitted that working in the business, he found it sleep-inducing.

But that approval represents something significant. For the first time in over 50 years, the NYSE and NASDAQ duopoly is being challenged. And it's not being challenged from New York or San Francisco. It's being challenged from Texas.

The Malcolm Gladwell Tipping Point

Jeff referenced Malcolm Gladwell's book "The Tipping Point" and made a bold claim: September 30, 2025, the day TXSE received SEC approval, will be remembered as the tipping point for Texas becoming the center and nexus of capitalism 10 to 20 years from now.

It's a bold statement, but when you look at what's already happening, it starts to make sense.

Three weeks before this event, Scotiabank announced their North American headquarters would be in Dallas, bringing 1,000 employees. Two months prior, Morgan Stanley announced they're moving 1,000 employees to Dallas. Goldman Sachs is bringing 5,000 employees to Dallas in a three-building development they're constructing. JP Morgan already has more employees in Dallas than they do in New York, and they're adding more.

Charles Schwab has their headquarters in Texas. TD Ameritrade has their headquarters in Texas. Fisher Investments has a major presence. The list goes on.

Jeff shared that he recently met with a CEO from a very large financial services broker-dealer bank firm who, after hearing about TXSE, asked to be connected to the Governor's relocation team because they want to establish a substantial operation in Dallas as well.

This isn't one company making a move. This is a systematic shift of the financial services industry's center of gravity.

Why Texas?

Texas is home to over 5,000 private companies. It's home to 53 Fortune 500 company headquarters, which represents one out of every ten public companies in America. This isn't a state trying to build an ecosystem from scratch. The ecosystem already exists.

But beyond the numbers, there's something else happening in Texas that makes this possible. There's alignment between government and business around a shared vision for economic growth. There's a regulatory environment that encourages innovation rather than strangling it. There's an entrepreneurial culture that understands risk-taking and rewards it.

Jeff pointed out that when people think about entrepreneurship and innovation, they automatically think West Coast. But Texas has been building this infrastructure for years, largely under the radar of the national conversation. TXSE is, in his words, "the natural extension of that infrastructure of the corporate community and the coming together of government and business."

What Makes TXSE Different

Here's where things get interesting for entrepreneurs and business owners.

TXSE isn't trying to compete with NYSE and NASDAQ by doing the exact same thing slightly better or slightly cheaper. They're building something fundamentally different.

Traditional exchanges have had 50-plus years to innovate and evolve in ways that benefit the companies that list with them. By and large, they haven't. Jeff spent a decade working at NYSE before joining TXSE, so he understands the culture and philosophy of the existing players. In his words, "They're not necessarily about bringing about change and innovation."

Why? Because they're operating in a duopoly. When you name duopolies in the American economy, you struggle to come up with examples. Someone at the event apparently answered "glitter" - there are only two manufacturers of glitter, and they're both in New Jersey. (Jeff admitted he didn't fact-check this, but it sounded confident.)

Duopolies don't exist in most industries because of people like those in the room that night - entrepreneurs who innovate, who think about something different, better, faster than what's currently in place. But that's never happened in the listings business, in being a stock exchange. Until now.

TXSE's core philosophy is about aligning directly with issuers. They're designing their exchange around how companies actually have to operate day-to-day with their investors, shareholders, and customers. They're not going to spend millions and millions of dollars trying to convince companies to list with them while operating exactly the same as their competitors.

The proof is already in the pudding. In their first year of existence, before they were even officially approved as an exchange, TXSE worked with the Texas legislature to pass five different pieces of legislation. Three of those laws are directly applicable to and beneficial for public companies today.

Think about that. They accomplished in nine months what their competitors haven't bothered to do in 50-plus years. That's not because NYSE and NASDAQ lack the resources or the relationships. It's because they lack the incentive. When you're operating in a comfortable duopoly, you don't rock the boat.

What This Means for Scaling Companies

If you're building a business in Texas with ambitions to scale nationally or eventually go public, this transformation of the ecosystem around you matters enormously.

Through my work with Birthing of Giants, I help entrepreneurs navigate the critical challenges of scaling: accessing the right capital at the right time, building exceptional teams, creating systems that can handle complexity, and positioning for eventual liquidity. What's remarkable is how perfectly the emerging Texas ecosystem now supports each of these transitions.

First, access to capital is improving dramatically. When the financial services infrastructure is local, when the people making investment decisions are in your city or your state, when they understand the regional economy and business culture, capital flows more efficiently.

Second, the expertise and networks that come with that capital infrastructure are now accessible. The same sophisticated financial professionals who used to only be available in New York are now building careers in Texas. That means better advisors, better board members, better partners for your growth journey.

Third, TXSE is being built with a philosophy of supporting issuers rather than just extracting fees from them. If they execute on that vision, it means companies will have a real alternative when they're thinking about going public. An alternative that understands their needs, that's invested in their success, and that's aligned with their long-term value creation.

What This Means for Scaling Companies

If you're building a business in Texas with ambitions to scale nationally or eventually go public, this transformation of the ecosystem around you matters enormously.

The fundamental challenges of scaling are universal: accessing the right capital at the right time, building exceptional teams, creating systems that can handle complexity, and positioning for eventual liquidity. What's changing is how effectively Texas can support companies through each of these transitions.

Access to Growth Capital

One of the biggest challenges in scaling a business is accessing growth-stage capital. Early-stage funding is important, but it's the later rounds that actually fuel scale. Historically, that meant building relationships with New York or San Francisco based firms, flying back and forth for meetings, trying to explain your regional market to investors who don't understand it.

The relocation of major financial institutions to Texas changes this equation fundamentally. When Goldman Sachs has 5,000 employees in Dallas, when JP Morgan has more people in Dallas than New York, when every major brokerage firm has significant operations here, the capital networks become local. The same sophisticated institutional investors who can write eight and nine-figure checks are now down the street.

More importantly, they understand the Texas market. They understand the business culture, the talent pool, the regulatory environment, and the growth dynamics. That understanding translates into faster decisions, better terms, and partnerships that actually support your scaling journey rather than just extracting value.

Building World-Class Teams

Your ability to scale is directly tied to your ability to attract, develop, and retain exceptional talent. The traditional challenge for Texas companies was convincing top-tier financial, operational, and strategic talent to leave coastal hubs.

That challenge is evaporating. When Scotiabank moves their North American headquarters to Dallas, they're bringing experienced financial professionals. When Morgan Stanley relocates 1,000 employees, they're building a talent pool. When Goldman Sachs constructs a three-building campus, they're making a multi-decade commitment to building careers here.

For scaling companies, this means access to experienced executives who have built and scaled companies before. Board members who have taken companies public. CFOs who understand complex financial structures. Operational leaders who have managed hypergrowth.

The talent that used to only be available in New York or San Francisco is now building their careers in Texas. That's a fundamental shift in what's possible for growing companies here.

Infrastructure for Complexity

As companies scale, they face increasing complexity in financial reporting, regulatory compliance, investor relations, and corporate governance. You can't just work harder at the systems that got you to your current size. You need fundamentally different infrastructure.

TXSE's commitment to passing legislation that helps public companies operate more efficiently speaks directly to this challenge. In nine months, they created three new laws that benefit public companies. They're thinking about the actual operational challenges companies face and building solutions.

This matters long before you're considering an IPO. The infrastructure, expertise, and support systems that exist for public companies also benefit late-stage private companies preparing for liquidity events. When that ecosystem is strong and local, it reduces friction, lowers costs, and shortens timelines.

Preparing for Liquidity Events

Every scaling company eventually faces the question of liquidity. For founders, early employees, and investors, there comes a time when the value you've created needs to translate into actual returns. The traditional paths were acquisition or IPO, and for IPOs, that meant NYSE or NASDAQ.

TXSE creates a third option, and potentially a better-aligned option. An exchange that's designed around issuer needs, that's local, that understands your business and your market, could make the IPO process less painful and more successful.

But beyond just having another option, the existence of TXSE and the broader financial infrastructure in Texas means more sophisticated conversations about liquidity earlier in your company's journey. Your advisors understand these paths better. Your investors have more experience with them. Your team has seen more examples of successful exits.

Strategic Positioning and Network Effects

Your company's value isn't just in what you build, it's in how you're positioned within valuable networks. Being in Texas as the financial infrastructure builds creates asymmetric advantages. You're early to a transformation that others will follow.

The relationships you build with the financial professionals relocating here, the connections you make with other scaling companies, the access you have to emerging infrastructure like TXSE - these create compounding advantages over time.

Jeff mentioned that a major financial services CEO, after learning about TXSE, asked to be connected to the Governor's relocation team. That pattern will repeat. As more infrastructure comes to Texas, it attracts more companies, which attracts more talent, which attracts more capital, which creates more success stories, which attracts more of everything.

If you're building a scaling company in Texas right now, you're positioned to ride that wave rather than chase it.

The Operational Mindset for Growth

Scaling isn't just about getting bigger, it's about building systems that can handle growth without breaking. The same discipline required to scale a company is being applied to building Texas's financial infrastructure.

TXSE isn't just copying what NYSE and NASDAQ do. They're rethinking from first principles what an exchange should be. That same entrepreneurial, first-principles thinking is what scaling companies need to apply to every aspect of their business.

There's a cultural alignment happening in Texas between how entrepreneurs think about building companies and how the supporting infrastructure is being built. That alignment reduces friction and creates momentum.

The Governor's office isn't just offering tax incentives to relocate, they're actively working with industry to understand what they need and building legislative solutions. TXSE isn't just listing companies, they're partnering with them on their journey. The financial institutions relocating aren't just opening branch offices, they're building regional headquarters and making generational commitments.

This is the infrastructure that scaling companies need, being built with the same growth mindset that entrepreneurs bring to their businesses.

The Broader Implications

This isn't just about one exchange or one industry. It's about the continued diversification of American capitalism away from a handful of coastal hubs.

For decades, if you wanted to build a truly significant company, conventional wisdom said you had to be in Silicon Valley or New York. That's been changing gradually, but we're now seeing an acceleration. The infrastructure that used to exist only in those places is being rebuilt in Texas.

And it's not just happening because of tax policy or cost of living, though those factors matter. It's happening because there's a recognition that the concentration of financial power in a few cities creates fragility and limits opportunity.

When I think about Jeff's tipping point comment, what strikes me is that tipping points are only obvious in retrospect. In the moment, they often feel incremental. But when you step back and look at the totality of what's happening - the financial firms relocating, the Fortune 500 headquarters, the private company ecosystem, the legislative support, and now TXSE - it does feel like we're at an inflection point.

The Question Isn't Why Texas Anymore

Ten years ago, if you told someone you were building a major company in Texas, you'd get a certain kind of response. There might be some skepticism about access to talent, to capital, to networks. Those objections are evaporating.

Today, the question isn't why Texas. The question for many companies is becoming why anywhere else.

That doesn't mean Texas is the right answer for every company or every entrepreneur. But it does mean that the playbook for building and scaling companies in America is being rewritten, and Texas is holding the pen.

Final Thoughts

I left the YETI store tonight with a different perspective on what's happening in Texas. This isn't just about business-friendly policies or lower taxes. This is about the deliberate construction of infrastructure - physical, financial, regulatory, and cultural - to support the creation and scaling of significant companies.

TXSE is a piece of that infrastructure. An important piece. But it's part of a larger story about where innovation and capitalism happen in America, and more specifically, where companies can successfully navigate the journey from startup to scale to liquidity.

Scaling a company requires more than just a great product and hard work. It requires access to capital, experienced talent, sophisticated advisors, supportive infrastructure, and clear paths to liquidity. For years, that meant companies had to leave Texas or at least build significant operations on the coasts to access those resources.

That era is ending.

The ecosystem being built in Texas right now is specifically designed to support companies through the entire scaling journey. From early growth capital through IPO, from first professional hires through world-class executive teams, from basic financial systems through complex public company infrastructure - it's all being built here, with intention, with alignment between government and business, and with the same entrepreneurial mindset that drives the companies it's designed to serve.

For those of us building companies here, the message is clear: the ecosystem advantage is real, it's accelerating, and it's being built with intention. We're not on the periphery anymore. We're building in what's becoming the center.

The timing matters too. Being early to this transformation creates asymmetric advantages. The relationships you build now with the financial professionals relocating here, the connections you make with other scaling companies, the access you gain to emerging infrastructure like TXSE - these create compounding benefits over time.

Texas in 2025 offers advantages in ways that would have been impossible even five years ago. The companies I work with through Birthing of Giants are experiencing this firsthand - they're not just building businesses, they're positioning those companies to capture the unique advantages of ecosystem and timing.

If you're serious about scaling your company and want to learn how to improve value, increase profitability, and navigate growth more effectively, explore the Birthing of Giants regional cohorts: https://birthingofgiants.com/regional-cohorts​

Thanks to Tommy Hannan and the team at Bridgepoint for organizing this event and bringing together the Texas business community for this important conversation. These are the kinds of dialogues that help us all see the bigger picture of what we're building together, and how we can better prepare our companies to scale successfully in this emerging ecosystem.

The future of American capitalism is being written. And increasingly, it's being written with a Texas accent, by entrepreneurs who understand that scaling a business requires more than vision - it requires the right infrastructure, the right networks, and the right timing.

We have all three.