Austin’s venture capital landscape is a frequent topic of debate among local tech entrepreneurs, investors and observers. On one side, some claim there’s a gap in available capital here, especially for growth- and later-stage companies, resulting in lower valuations and small exits.
Another perspective is that there’s plenty of capital, but Austin’s tech tradition simply favors B2B companies, which take longer to demonstrate market traction than the B2C models of today’s digital media, on-demand service and sharing economy unicorns.
However you see it, you can’t understand the landscape without knowing who’s shaping it. To help you find your way, we’ve compiled this list of local funds focused on investing in Austin tech companies.
Austin Venture Capital Firms to Know
- ATX Venture Partners
- LiveOak Venture Partners
- Silverton Partners
- Tritium Partners
- E3 Angel Network
Seed funding and angel investors
Funds under management: $25 million
Focus: Early-stage seed investments for emerging entrepreneurs.
News: Microsoft announced its acquisition of Fantasy Sales Team in August. Ridescout was acquired by car2go North America in September 2014.
Notable investments: Fantasy Sales Team, RideScout, Everfest, set.fm, AlertMedia, Unbill, IdealSpot
Funds under management: $64 million invested by individual members
Focus: More than 140 member angel investors with expertise in a variety of industries and functions have invested in more than 110 companies since CTAN was formed by Jamie Rhodes as a not-for-profit in 2006.
News: Recently ranked the most active single-chapter angel group in the U.S. by the Angel Resource Institute.
Investments: CSID, Phunware, Localeur, Boxer, Apptive, ClearBlade, Curb, Infinite.io, Ordoro, Student Loan Genius.
Focus: Co-founders Dan Keelan and Patrick Drew target small businesses in Texas with a proven revenue-generation model, for investments ranging $250,000 and $500,000
More info: Their website provides clear and detailed information about what they’re looking for in portfolio companies, and it’s easy to apply for investment through their detailed application form.
Funds under management: Undisclosed
Focus: Perhaps best known as an accelerator and coworking space, Capital Factory also operates a venture fund. (Editor's note: Even we missed it when we first published this list.) The fund, directed by Front Gate Tickets Founder Mellie Price and Chaotic Moon Partner Andrew Busey and managed by Capital Factory co-founder Josh Baer, makes equity investments in Austin-based companies exclusively.
News: The fund recently invested in eRelevance, Student Loan Genius and Aceable.
Notable investments: OwnLocal, Lynx Laboratories (acquired by Occipital last year) and Dropoff
Funds under management: $200 million
Focus: Entrepreneurs at the earliest stages of idea generation, company formation, and market execution, especially those associated with regional startup development organizations, such as seed accelerators, incubators and university tech transfer offices. Seed investments typically range from $50,000 to $500,000, and Series A investments range from $1 million to $2 million. Total commitment averages $4 million to $5 million over the life of a company.
News: The firm’s primary offices are in Houston, but it operates a secondary location in the Techstars Austin office at 412 Congress Ave.
Notable investments: BlackLocus, ShareThis, GameSalad, Phurnace Software (precursor to Datical)
Growth stage
Funds under management: $109 million
Focus: Seed and series A investments between $250,000 and $4 million in Texas, with occasional later stage activity. Live Oak aims to be the largest and most active investor in each of its portfolio companies, with a target total investment of $5 million to $7 million in each.
News: First portfolio company to exit was StackEngine in December, when it was acquired by Oracle (NYSE: ORCL).
Notable investments: Infocyte, InforcePRO, OJO Labs, RxWiki
Funds under management: $500 million
Focus: S3 Ventures -- the largest venture capital firm focused on Texas entrepreneurs -- makes Seed, Series A, and Series B investments in start-ups across three sectors: Business Technology, Digital Experiences, and Healthcare Technology.
Notable investments: Datical, Favor, Phunware
Later stage investments
Focus: Teams and entrepreneurs in Austin tech, with initial investments ranging from $200,000 to $2 million.
News: Silverton recently led a $10 million funding round for TurnKey, a short-term vacation rental service betting on long-term opportunity in Austin despite current regulations restricting the sharing economy for STRs.
Notable investments: TrendKite, Aceable, Equipboard, Self Lender, SpareFoot, The Zebra, uShip, WP Engine, TurnKey
Funds under management: The firm doesn’t disclose the size of its fund on its site, but does state that its principals have invested more than $700 million of equity capital over the last 10 years. It’s likely that includes a fair amount of activity from their days at Austin Ventures.
Focus: Launched in 2013 by two of Austin Ventures’ growth equity investors, Phil Siegel and David Lack, Tritium targets buyouts of growth companies in the lower middle market with between $2 million and $15 million in EBITDA in the sectors of web, IT, supply chain and logistics and financial and business services.
News: Tritium recently announced a platform for acquiring companies in fintech with Max Narro, who led Worldpay through its IPO and acquisition of SecureNet Payment Systems. Narro will guide the new platform as a CEO partner.
Notable investments: HomeAway, RetailMeNot, Newgistics
Recently launched funds
Focus: Seed to growth-stage companies in IT software, health tech and cyber security
News: Digitech announced their first investment this week, but didn’t report the amount. Digitech’s website describes a pipeline containing “three potential deals.”
Notable investments: Just one so far: SmartHome Hero.
Funds under management: Currently seeking $50 million to start
Focus: Disruptive companies in big markets
Social enterprise funds and groups
Funds under management: Approximately 20 members invest individually, led by founder and executive director Bob Bridge.
Focus: Nurturing and mentoring for-profit startups with missions to make the world a better place.
Notable investments: Too soon to say. SWAN held its first investor presentation meeting in February.
News: Besides a few preliminary announcements, we haven’t heard much out of this group yet. We’re staying tuned, though.
Funds under management: Ethnically diverse member angels invest individually
Focus: Startups founded or led by ethnically diverse and female entrepreneurs
Info: If you think your company is what E3 is looking for, it’s easy to apply for investment through E3’s site.
Funds under management: Undisclosed
Focus: Businesses and nonprofits with social impact missions. Notley doesn’t have a specific issue, sector or geographic target.
Once you find a fit and are ready to make your pitch, consider what VCs are looking for in your pitch. SWAN director Bob Bridge also offers some valuable advice on market validation here, as do our friends at UT Austin’s McCombs School of Business in this article.
