Austin—Serial entrepreneur Andy Tryba has launched a $1 billion private equity fund in Austin aimed to help “modestly growing” software companies find exits.
“We developed this fund to enable founders to take more shots on goal,” Tryba, Think3’s founder and CEO, said in a press release. “Founders should think of ‘time’ as their portfolio—making the call earlier if their current company is growing fast enough for exit velocity. Too many founders hang on too long hoping for a growth miracle—killing their career.”
Tryba is an Austin entrepreneur who is CEO of companies such as DNN, Engine Yard, and Crossover for Work, according to his Linkedin profile. He is also CEO and co-founder of RideAustin, a non-profit ride-hailing service founded in 2016. Tryba did not immediately respond to a message seeking comment. Of interest are topics such as how many years he expects it will take the fund to invest the $1 billion or how the fund’s approach mimics or deviates from traditional PE approaches to the companies they buy.
Think3’s focus on later-stage investment deals does seem to fit the current financing environment. While the U.S. venture industry capped off of its biggest year ever in 2017 with $84.2 billion invested—levels not seen since the dotcom era of the 1990s—those dollars were spread across fewer deals. That means that investors are putting money into fewer companies, and many of those that do receive funding are fairly far along.
Though Think3’s approach is to encourage founders to seek exits, the fund also wants to spur more startup creation. Think3 buys startups, transitioning founders out of their companies within 100 days. That’s in order to encourage those entrepreneurs to take their full team and build their next startup. The fund also provides $500,000 of non-dilutive capital per company to help entrepreneurs launch their new startups.
“Too many founders hang on too long hoping for a growth miracle—killing their career,” Tryba said in the release.
Think3 says the fund has developed a process that enables startup founders and their teams to transition out in 100 days while ensuring that the business and success of its customers continues. Think3 says the process has been used on 50 companies over the last decade. The fund is part of ESW Capital, which is also based in Austin.
Think3’s approach—focusing on exits—reflects the current investing environment because those events have declined by 30 percent in the last four years in the United States, meaning that young companies are staying private longer, according to the press release. That’s bad for entrepreneurs, the fund states, because it reduces the number of companies they can start during their careers.
On average, Think3 stated that most founders only have a 15-year lifespan available during their careers as a startup entrepreneur. “If they launch a company and hang on for seven to eight years, for example, they have two shots to achieve their unicorn,” the press release states. “If, instead, founders transition every three years, they have five shots. People undervalue their time, but it’s the most valuable asset they have.”
