Austin’s venture capital landscape continues to grow more fragmented and decentralized than it was a decade ago. Instead of just a few major players, investors are launching their own specialized firms and raising good-sized funds from limited partners.
While former powerhouse Austin Ventures LP has decided to forgo another VC fund, VC firms outside Austin and Texas are making investments in more established local startups.
The dynamics may be putting nascent local VC firms such as ATX Seed Ventures LP, LiveOak Venture Partners LP and Tasty Ventures in a better position to support the fast-growing local entrepreneurial scene. Whatever is happening, it’s working for the most part.
Need proof? Consider that during 2014 Central Texas companies collected the largest amount of venture capital since 2001. And there doesn’t appear to be anything to stifle that growth. A rising number of incubators, accelerators and co-working spaces are providing seed funding to startups and creating a steady pipeline of potential deals for local VCs.
Although the national firms are willing to syndicate on the later-stage investments from afar, the boots-on-the-ground VCs are positioned to shepherd the local startups to post revenue.
“Repeatedly, we’re seeing high-value opportunities,” LiveOak Ventures General Partner Krishna Srinivasan said. “The supply of deals is much better than ever before.”
Opening the door
Austin Ventures, once the region’s most dominant backer of local and young technology startups, has focused most of its latest fund on growth equity deals instead of early-stage VC investments.
Written by Christopher Calnan