Hangar Ventures gets back to the runway, finally takes flight

Soon after Jeff Williams and Jason Story hung out a shingle and announced the launch of Dallas-based Hangar Ventures last fall, an undisclosed business stepped forward to threaten legal action over use of the name.

Hangar attorneys told the two partners to maintain a low profile while the challenge was hashed out behind closed doors.

It’s not unusual for firms to wrangle over names. In November 2013, Icon Venture Partners launched with offices in Menlo Park, Calif., and in Minnetonka, Minn., but rebranded itself into Rally Ventures more than a year later because expansion-stage investor Jafco Ventures already had dibs on changing its name to Icon Ventures.

After six months of legal wrangling, the results of which Hangar wouldn’t disclose, Story said he and Williams have decided to push ahead with plans and get back to the business of investing in Dallas-area companies.

“We’re not in the clear, but we’ve decided to move forward anyway,” said Story, a former University of Texas student who sold Mutual Mobile, his Austin-based startup, for an undisclosed amount in 2013.

Story said that Hangar has already announced its first deal from its inaugural fund, a $2 million seed round in Rechat, an early-stage Dallas-based residential real estate service platform for brokers and agents.

Texas Lone Start State Target
Photo illustration from Shutterstock.

Overall, he said Hangar plans to make seed and Series A investments ranging from $1.5 million to $2.5 million in about 10 to 12 companies out of the firm’s $50 million-targeted fund, which is slated for a final close in the fall. The fund held two partial closes last year.

Story said he and Williams, a Dallas-area VC veteran with more than 20 years of experience, are open to syndicating with other groups in rounds ranging up to $8 million in size.

He noted most of the money raised to date has come from family funds or high net-worth individuals in the Dallas area, and include such high-profile residents as John Jaggers, managing partner of Sevin Rosen Funds, and David Hunt of Hunt Technology Ventures.

Hunt is a member of the legendary Hunt family, with a fortune estimated at more than $14 billion by Forbes magazine.

Williams worked for Hunt Technology Ventures with the title of managing director for a decade.

The Hangar partners say now’s the time to strike in Texas, given the dearth of capital available in the Lone Star State.

The state’s 29 venture deals in the fourth quarter of 2015 totaled $186 million, or about 2 percent of the total amount invested nationwide, according to the National Venture Capital Association.

The earlier third quarter was even far more favorable for Texas, though still miniscule compared to the nationwide landscape of venture deals.

The NVCA reported 45 deals valued at $340 million, again about 2 percent of the total amount invested in the United States during the three-month period, with most of the deal flow occurring in energy and software.

“In 2015, about $1.3 billion was invested in early-stage companies each year in Texas,” said Story, who noted that it is a tiny amount compared to other regions of the country.

“There’s been a capital imbalance, and there’s not been a lot of early-stage capital locally available to entrepreneurs,” he said, a situation especially true in the Dallas region. “That shortfall is why we think there is really good opportunity here to build a great franchise.”

Tom York is a San Diego-based contributor. He can be reached at tom.york@gmail.com.