Nov. 6–Austin Ventures LP, one of North Texas’ biggest investors in start-up companies, is closing its last office in the Dallas area.
The venture capital firm plans to continue investing in companies in the region through its office in Austin, said general partner Blaine Wesner. In the last 20 years, Austin Ventures has poured $350 million in venture capital into companies in the Dallas area.
“Our relationships run deep in North Texas,” Mr. Wesner said. “We have 20 active portfolio companies here now, and there are 11 investment professionals who will be in Austin who have at least one company in Dallas. We feel pretty good about the network we’ve established here.”
Four investment professionals, including general partner Ed Olkkola, have been asked to relocate to Austin, Mr. Wesner said. A low number of Richardson support staff will be let go, he said.
Austin Ventures, a star of Texas’ Internet boom in the late 1990s, opened two satellite offices in the Dallas area in 2000, one in Richardson and one in Dallas’ West End. Last year, feeling the effects of the dot-com burnout, the firm closed the West End office and slashed its $1.5 billion technology fund by nearly half.
“We’ve spent the last 18 months trying to take the temperature of the overall Texas market, not just the Dallas market,” Mr. Wesner said.
“Where we are now is that it feels like things have normalized, but they’ve normalized at 1997 or 1998 levels,” he said. Under today’s conditions, it doesn’t make sense to spend money maintaining a separate office, he said.
After dipping dramatically from 2000’s highs, Dallas-area venture capital investments have been relatively steady in the last few quarters, according to the MoneyTree Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.
Venture capital firms invested $116 million in Dallas-area companies in the third quarter, up from $100 million in the second quarter but down from $161 million a year ago, the MoneyTree Survey said.
At the Dallas office of Sevin Rosen Funds, a rival of Austin Ventures, deals are churning at a nice, steady pace, said Jackie Kimzey, a general partner. “We have an office here and one in Austin, and we’re not saying, ‘Let’s pull up and close one office or the other.’ We think both markets are equally robust.”
Austin Ventures probably decided to close the Richardson office because “they’re just still getting over the hangover” from the dot-com era, Mr. Kimzey said.
“We’ve done deals with those guys. This is a business that does depend on syndicate partners, so you don’t want to see people go through hard times,” he said. “To me, it just shows that they have a commitment in Austin versus North Texas.”
Not so, Mr. Wesner said.
“We’re bullish on Texas. We’re bullish on North Texas,” he said. “But to maintain our company’s culture, to keep good communication going across our entire professional investor base, we think we’re better off having everyone under one roof.”
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