[ad_1]
Texas may have suffered a heartbreaking defeat at the NCAA men's championship game last night, but the state has something to celebrate today. Local company LiveOak Venture Partners, a venture capital firm focused exclusively on startups based in Texas, closed a new fund with capital commitments of $ 105 million.
This is the company's second vehicle, formed in 2013 by long-time investors Venu Shamapant, Krishna Srinivasan and Ben Scott, who met while working together at Austin Ventures in 2000 – and who seem to know this. they do as a team.
LiveOak has already seen two companies in its portfolio sell for significant amounts (digital pharmacists sold last month to K1 Investment Management for over $ 100 million, Opcity was bought last summer by News Corp. for $ 210 million). They also have at least two holding companies whose valuations have increased significantly since their funding by LiveOak, including CS Disco, which raised $ 83 million in January, and OJO Labs, which raised $ 45 million a few months ago. weeks only.
We were in touch with the trio at the end of last week to find out more about what they saw on the local startups scene.
TC: You've all been based in Austin for a very long time. What are the most important changes you've seen since you met 19 years ago, at the height of the Internet bubble?
KS: Texas has been evolving since 2000. Talent is perhaps the most significant improvement since 2000. There has been a mbadive influx of strong talent – especially coastlines – and we also have a maturation of locally grown talent. [Both have created a] critical mbad of people across functions and industries that have gone through a startup cycle.
While, like any other market, Texas had a lot of local capital in 2000, it quickly dried up, leaving Austin Ventures, where we were working at the time, as the only truly significant source of local capital in Texas . [After the more recent financial crisis]Between 2009 and 2012, all local capitals in the start-up phase were completely dry, which contrasts with the continued growth of talent. But it gave us the opportunity to start LiveOak, and today we have a lot of available capital, both locally and externally, creating a really dynamic entrepreneurial scene in the city.
I would also say that, while Texas is more biased towards the B2B / B2B market, it has become much more diversified than in 2000. We have completely [moved] far from semiconductors and hardware and strongly accelerated towards verticalized software and technology services. Some of the leaders in our portfolio are players in the legal, real estate and healthcare fields. We are also seeing early growth in consumption, but this is an area in which we will need to import a lot of talent.
TC: How has the founder's profile changed, if at all?
KS: Although we have never reached Texas Peak, we have seen a turning point in the cost of living factors in coastal states by bringing in serial entrepreneurs to create and resize companies that would otherwise have been based in the country in recent years. In fact, more than half of the six investments we have already made in our new fund were created by entrepreneurs who have moved to Texas in the last five years.
TC: And what is happening in terms of evaluations? Have you seen any trends in the last two years?
AGAINST; The valuations in Texas companies are very dependent on the stage of society. For start-ups, while valuations have increased somewhat, they remain on average below national valuation trends. For later stage capital, where these companies target the same base of domestic investors, valuations tend to converge towards national valuation levels.
TC: What size of checks do you write and has this changed with this new fund?
KS: Our strategy is to be one of the first institutional investors in a company. Our first check can range from $ 1.5 million to $ 4 million for start-up companies raising their first round of institutional funding. During the life cycle of a company, we are willing to invest between $ 8 million and $ 10 million. [altogether].
Source link
