Silverton Partners, an Austin venture capital firm, announced today it has launched a new $75 million fund.
The fund, which is the firm’s fourth, will focus on making early-stage seed investments in technology companies in the Austin area. It’s a market that is especially attractive to Silverton’s group of investors, many of whom are repeat fund participants, says Morgan Flager, a Silverton partner.
“This is a network of people that we’ve interacted with, done business with,” he says. “More specifically, they’re excited about Austin, and particularly about early-stage investment in Austin.”
Kip McClanahan, also a firm partner, says the strategy for the fund will follow that used in Silverton’s previous fund, which launched in 2006. Between 75 percent to 80 percent was allocated to software startups, with about 40 percent of the remainder being put into consumer startups. About 20 percent of those funded startups have seen major exits.
For example, Convio, a provider of on-demand software and services for nonprofit organizations, completed a $46.2 initial public offering in April 2010 and was bought by Blackbaud (NASDAQ: BLKB) in January 2012 for $325 million. BlackLocus, which provides retailers with data to help them make pricing decisions, was bought by Home Depot (NYSE: HD) for an undisclosed sum in December 2012. And software firm Crimson was bought by The Advisory Board Company (NASDAQ: ABCO) for $27 million in 2008.
Silverton makes initial investments that range from the hundreds of thousands to a few million dollars, McClanahan says, and does about six deals a year. “We like to be the lead investor and the largest,” he says. “We always take a board seat and take an active role.”
Silverton was founded in 2005 by Bill Wood, who was a founding partner of Austin Ventures in 1984. The firm is poised to grow again. “We’re in hiring mode,” McClanahan says.
