AUSTIN, Texas – Austin Ventures, L.P. closed its sixth fund in late November at $320 million, beating its $250 million target and making its first investment.
General Partner Joseph Aragona said he was pleased with the level of interest in the fund and the speed of its closing. “I think it says that [our] balanced strategy and the focus on the Southwest is an interesting strategy,” he said.
Austin Ventures VI, launched in September, will follow the firm’s strategy of investing about half its capital in start-up technology companies and the other half in growth service companies. The vehicle, like the firm’s previous two funds, will focus on the Southwest, with about 75% of its investments slated for Texas-based businesses, Mr. Aragona said.
The vehicle closed its first deal on the day it was wrapped, committing $3 million to Agere Inc., a semiconductor start-up in Austin, Mr. Aragona said.
Limited partners for the fund include Liberty Mutual Insurance Co., Bell Atlantic Corp., Ameritech, General Motors Investment Management Corp., JP Morgan, HarbourVest Partners, Crossroads Capital, Abbott Capital Management, Brinson Partners, Hamilton Lane Advisors, California State Teachers’ Retirement System, California Institute of Technology, University of Texas, Harvard Private Capital, Dartmouth College, Rice University, Berea College and Rensselaer Polytechnic Institute. More than 90% of the capital for the vehicle came from existing limited partners, and new investors were mostly endowments, Mr. Aragona said.
Austin will typically invest between $250,000 and $6 million in technology companies and between $2.5 million and $20 million in service companies. The firm invests at all stages, including seed, first-round and expansion financings. Austin’s technology portfolio includes semiconductor, enterprise software, Internet and computer networking businesses. The portfolio of service companies focuses on technology services, business outsourcing, health care and communications.
During the second half of 1998, Austin hired four new investment professionals and promoted three associates to principals partly in preparation for the new fund, Mr. Aragona said. Ed Olkkola, most recently vice president of business development and strategy at Compaq Computer, was hired as a general partner and will lead the firm’s communications/computer networking initiative in Austin. Brian Goffman, who was director of business development at PointCast Inc., was recruited as a principal to focus on e-commerce and the Internet. Shawn Kelly, who left J.C. Bradford & Co., and Rob Kornblum, who spent three years at Robertson, Stephens & Co.’s technology corporate finance group, were hired as new associates for the services and technology teams, respectively.
Ross Cockrell, who joined the firm in 1995, was promoted to principal from associate and will focus on business outsourcing and technology services. Stephen Straus also became a principal after two years with the firm and will concentrate on semiconductors. John Dirvin, promoted to principal after one year with the firm, will work on the software initiative.