Seed to Success
Although we invest at all phases of a company’s life, most of our investment activity occurs at the very early stages, and certainly no investment opportunity is ’too early’ for our consideration. In many of our successful investments, Austin Ventures was a founding investor and made our investment when the company was no more than a passionate team and a promising idea. On the road from seed to success we become the founding team’s trusted advisor. When it came time to embark on their next entrepreneurial venture, many of these entrepreneurs once again selected Austin Ventures as their investment partner. Selected AV seed investments include the following:
Agere was founded in 1998 by two repeat entrepreneurs, Ford Tamer and Eric Rothfus, out of Dazel Corp., an Austin Ventures funded startup which was acquired by HP. The company pioneered the Network Processor space with the help of Vic Bennett, another serial entrepreneur, and was the first NP vendor to achieve commercial success. Austin Ventures co-led the $8MM Series A financing in November 1998, and played a very active role in recruiting experienced VPs of Marketing and Sales, as well as key members of the ASIC team. Agere was acquired by Lucent Microelectronics, which subsequently changed its name to Agere Systems, in early 2000 for $415MM. At the time, it was the highest price ever paid for a private semiconductor company. Austin Ventures maintains strong ties with many ex-Agere team members and has invested in and alongside a number of them in their subsequent endeavors.
The Partners at Austin Ventures originally introduced Scott Harmon and Mike Maples, two of the founders of Motive, to each other in 1992. As a result of this introduction, Scott recruited Mike to work with him at another Austin Ventures portfolio company, Tivoli. Following the successful acquisition and integration of Tivoli by IBM, Scott joined Austin Ventures as an Entrepreneur in Residence in 1997. During his tenure as an EIR, Scott reconnected with Mike and the other two founders, Tom Bereiter and Brian Vetter, to start Motive in early 1998. Austin Ventures helped the founders turn their original vision of a platform for service delivery management into reality by being a co-lead investor in the Series A round with Accel Partners and participated in all additional rounds of financing for the company. Motive eventually acquired 3 other Austin Ventures portfolio companies and had a successful IPO in 2004.
Pluck was founded in 2003 by two software industry executives, Dave Panos and Andrew Busey, who pioneered the industry's earliest efforts in instant messaging, real-time collaboration, e-commerce and e-learning. At Pluck, Panos and Busey built a world-class social media platform that enables leading publishers, brands, and retailers to grow their audiences by seamlessly integrating content, community and social media technologies directly into their existing web properties. Austin Ventures led the Series A financing in 2003 and in 2008, Pluck was acquired by Demand Media. Pluck, now a leading provider of social media tools and technologies, serves more than 200 media websites, reaching over 100 million users, and serving over 1.5 billion interactions per month.
Silicon Laboratories was founded in 1996 by former executives and technologists from Crystal Semiconductor, an Austin Ventures Fund II investment. Austin Ventures led the company's Series A investment round. Utilizing highly innovative mixed-signal circuit design in standard CMOS technology to attack high growth opportunities, the company achieved positive cash flow on a remarkable $6MM of capital. Since its IPO in March, 2000, Silicon Labs has grown to become one of the leading mixed-signal companies in the world. Its most recent expansion was the acquisition of Cygnal Semiconductor, an Austin Ventures Fund VI portfolio company in the mixed-signal microcontroller space.
The company was formed in 2000 by an AV Entrepreneur in Residence and three senior members of Alcatel’s mobile switching group to develop a next generation mobile switching platform. AV was heavily involved from the start helping to found the company, develop the business plan, recruit the initial team, fill out the board, incubate the company inside its offices and provide the initial seed & Series A financing. AV added Venture Partner Ben Scott, former CEO of IXC communications/COO of Bell Atlantic Wireless, to further strengthen company relationships with carriers as well as add a wealth of carrier operational experience. To help fund Spatial’s growth, AV brought in investment partners, to lead Series B, C & D rounds. Spatial was sold to Alcatel in 2004, and AV is working with former members of Spatial’s founding team on incubating other potential opportunities.
Austin based Tivoli was founded in 1990 by Bob Fabbio and Todd Smith. The entrepreneurs originally approached Austin Ventures with a vision to create an enterprise software company to manage IT assets in the then emerging and increasingly distributed client/server architecture. In addition to providing $1.25M of Series A capital alongside Kleiner Perkins Caufield Byers and Matrix Partners, Austin Ventures provided early strategic advice and guidance given its deep knowledge of the enterprise software industry that helped put the company on the right trajectory towards success. Tivoli had a successful Initial Public Offering in 1995 and was then acquired for over $750 million by IBM and formed the foundation for IBM’s Tivoli-business unit and the multi-billion dollar system management market.
Austin Ventures was the original seed investor in Vignette in late 1995. Austin Ventures provided the two second generation Austin Ventures portfolio entrepreneurs, Ross Garber and Neil Weber, with an initial investment of $250,000 to help refine their strategy for building a best in class content management platform. Ross and Neil are both veterans of Austin Ventures portfolio company Dazel (acquired by Hewlett Packard) and proactively chose to work with Austin Ventures given their previous experience with the firm. Austin Ventures was instrumental in helping the company to acquire key intellectual property assets from CNET that helped form the core technology for the company and to recruit and build a premier management team. Austin Ventures also led the way in assisting the company to raise additional venture capital financing in excess of $40 million, participating in every round of additional financing alongside other top tier firms. The company successfully went public in February of 1999.
Waveset was another successful spinout of Austin Ventures portfolio company Tivoli. Following the acquisition of Tivoli by IBM, the two founders of Waveset, Mark McLain and Mike Turner, became Entrepreneurs in Residence at Austin Ventures. In 2000, the Austin Ventures team helped Mark and Mike formulate their original business plan that allowed Waveset to become a leader in the Identity Management Industry. Austin Ventures provided the original seed financing of less than $750K to help launch the company and participated in every subsequent round of venture capital financing that resulted in Austin Ventures raising over $12.6M. Waveset was acquired by Sun Microsystems in 2004.