AUSTIN, Texas – Austin Ventures expected to finish raising its $825 million Fund VII in December and expects to hold a final close in January, said John Thornton a general partner at the firm. The fund notched a first close on just less than $700 million in October.
To keep up with the firm’s growth, Austin Ventures hired a new partner and a principal in November. Chris Pacitti, former vice president at TL Ventures, joined the firm as a partner, focusing on business-to-business services and e-commerce deals. Venu Shamapant, formerly with Telecom Technologies Inc., also joined Austin as a principal, focusing on applications and infras- tructure sectors and communications deals.
At the same time, Austin Ventures promoted principals Ross Cockrell and Stephen Strauss to partner posts. Strauss, who started at Austin Ventures as an associate, describes his tenure at the firm as an “evolutionary process,” as his responsibilities and decision-making independence continue to expand with each successive promotion.
Consistent with its ongoing strategy, Austin Ventures will invest its latest vehicle in companies at all stages of development that fall within five sectors of information technology: semiconductors; communications; business-to-business e-commerce and media; business-to-consumer e-commerce and services; and applications and infrastructure.
The firm will back each portfolio company with between $12 million and $15 million over several rounds of financing. In addition, Austin will use about $50 million of the new fund to back AV Labs, an early-stage venture firm that manages a $60 million Austin Ventures spin-out fund. The firm expects to finish investing Fund VII over two-and-a-half to three years, Thornton said.
The firm’s previous $320 million Fund VI is completely invested in or committed to about 35 companies, Thornton said. By press time, the firm had notched nine liquidity events in 1999 – six public offerings and three acquisitions – and Austin expected three more portfolio companies to go public by the end of the year.
Founded in 1979, Austin Ventures has more than $1.6 billion under management. The firm invests about three-fourths of its capital in Texas, concentrating about half its money in Austin.
The fund was substantially oversubscribed, surpassing its $750 million target, Thornton said.
Austin Ventures’s six general partners, Joe Aragona, Ken DeAngelis, Jeff Garvey, Ed Olkkola, Blaine Wesner and Thronton, lead the other 15 members of the investment team. Additionally, the firm is in the market for several associates and possibly another partner, Thornton said.