Silverton Partners has closed $75 million for a new investment fund that will target startups in Austin, Texas, the firm announced today.
Why Austin? Well that’s where Silverton is based. It’s also where 95 percent of the investors that contributed to the new fund call home. Austin’s tech scene is growing like gangbusters thanks to accelerators like the Capital Factory, DreamIt Ventures, and TechStars as well as plenty of support from major tech companies (Dell, Rackspace, Intel, etc.) and attention from the annual South By Southwest interactive event in March.
The new fund will be the firm’s fourth (Fund IV). It is not connected to Silverton’s previous $75 million fund (Fund III). It will, however, follow the same strategy that the firm’s partners used in Fund III by focusing primarily on early-stage Austin startups that span all sectors of the tech industry. Some of Silverton’s previous successes include Convio (IPO), BlackLocus (acquired by Home Depot), Crimson (acquired by Advisory Board Company), Hyper9 (bought by SolarWinds), and Javelin (purchased by Avago Technologies). The firm currently manages a portfolio of 18 tech companies.
“We could have raised quite a bit more money for the fund, but we felt like the $75 million amount aligned with our goals and was [sufficient] for making successful investments in the best and brightest in the area,” Silverton general partner Morgan Flager told VentureBeat.
Flager said each of Silverton’s partners likes to take a more active approach to helping its investment companies, with each of them managing a handful of startups. Making the fund bigger would mean having to invest in additional companies, which would take away from that approach, he added.
The firm plans to invest in about 25 companies with the new fund, or roughly six startups per year over the next four years, according to Flager.