By Chanelle Bessette, reporter
FORTUNE -- Austin-based venture capital firm Silverton Partners announced Thursday its new $75 million fund for investing in Texas-based technology companies. The burgeoning tech scene in Austin in recent years inspired Silverton's three partners, Bill Wood, Kip McClanahan, and Morgan Flager, to raise the investment fund, which will focus on seed and Series A funding for startups. "A number of factors are coming together to contribute to fast-paced tech community in Austin," McClanahan told Fortune. "It's never been more economical to start a company."
While tech startups tend to be cloistered within major metropolitan areas like Silicon Valley and New York City, the community-oriented lifestyle and relatively low cost of living in Austin has fostered a unique environment for startups. $65 million of the new Silverton fund was raised from two prominent university endowments (Silverton Partners are not allowed to disclose) and Wood himself, and the remaining $10 million comes from the support of 40 other entrepreneurs in Austin.
Compared to Silicon Valley in particular, the startup scene in Austin might not seem especially catching. However, the venture capital environment in Austin is quickly growing, as many of the firms are early stage investors and active angel investors. "By definition, this is a smaller geography, so that engenders a tighter-knit community," said McClanahan. "There's a little bit more loyalty between employees and particular companies ... It's a little less of a 'fog of war.'"
In the same vein, the amount of competition on the west coast changes the dynamics of how venture capital funds work. Companies that receive large amounts of funding wind up being able to out-pay other companies for talented employees. "It creates a very haves/have-nots environment," said Flager, who lived and worked in Silicon Valley before moving to Texas. "In Austin, founders can retain more of the company themselves and don't have to raise as much at the beginning."
Silverton Partners has so far worked primarily with business and consumer software companies. One of those companies, SpareFoot, helps its customers compare prices and sizes for local storage units from different providers. Another, Famigo, helps parents create an app section on their smartphone or tablet for their children called the "sandbox," which prevents children from accessing the rest of the device.
Jason Cohen, the founder of WordPress hosting company WP Engine, is one of the people that Silverton Partners helped with early funding rounds. He has found that the startup environment for Austin is more inclusive compared to Silicon Valley, where "bigger is better" when it comes to funding and competition. When Silverton Partners started raising its $75 million fund, he was one of the entrepreneurs that decided to give back to the community with financial help because he believes it's important to support early companies. Austin will continue to be a place to watch for tech talent, especially as investors help entrepreneurs set up shop.
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YouTube-based network Maker Studios, which sees about 4 billion streams per month, is raising more money to help expand its global footprint.
FORTUNE -- Maker Studios, the powerhouse network of YouTube channels, said Thursday that it secured an additional $26 million investment, bringing the total amount it has raised since December to $62 million.
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Clara Shih's 3-year-old startup is hoping to prove what so far remains unproven: that companies can use social media to sell.
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Maybe the "D" in AllThingsD should stand for "Deal."
By JP Mangalindan and Dan Primack
FORTUNE -- The future of influential tech website All Things Digital is close to being decided.
Reuters reported in February that AllThingsD co-executive editors Kara Swisher and Walt Mossberg had begun discussions with owner Dow Jones, a subsidiary of News Corp. (NWS), about either ending or extending their partnership, which is set to expire on December 31.
Since then, Fortune MOREAug 27, 2013 8:41 AM ET
The importance of the motto "ad astra, per aspera."
FORTUNE -- Fortune's Brainstorm Tech Conference (July 22-24 in Aspen, Colo.) regularly brings together the best and brightest minds in tech innovation. Each week, Fortune turns the spotlight on a different conference attendee to offer his or her own personal insight into business, tech, and entrepreneurship. This week, we asked former entrepreneur and current Greylock Partners general partner Joseph Ansanelli to answer MOREJul 18, 2013 7:12 AM ET
The recently knighted Silicon Valley venture capitalist talks about investing, which companies are exciting now, and Sequoia's reputation.
FORTUNE -- Michael Moritz, the renowned Silicon Valley venture capitalist, recently became Sir Michael, knighted by Queen Elizabeth II for his promotion of British economic interests and his philanthropy, including a large gift to his alma mater, Oxford University. Long ago a writer for Time magazine and author of what remains one of MOREAdam Lashinsky, Sr. Editor at Large - Jun 24, 2013 11:05 AM ET
China has a hot new startup scene, but there are still a lot of challenges.
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FORTUNE -- The "fail your way to success" model has been gospel for Silicon Valley venture capitalists and private-company investors for a long time. But in mainland China, that notion hasn't fully caught on, said a group of influential investors speaking at Fortune Global Forum in Chengdu, China. That makes it hard for some MOREJun 7, 2013 5:38 AM ET
Hot interior design startup didn't have the usual beginnings.
By Colleen Leahey, reporter
FORTUNE -- Adi Tatarko planned big things for her Silicon Valley ranch-style house. But making them a reality proved an expensive -- and miserable -- experience. Tatarko's friends described similar frustrations while renovating their homes, so she and her husband Alon Cohen began developing what would eventually become startup Houzz. Cohen understood the mutual need between buyers and sellers MOREMay 31, 2013 5:00 AM ET
Equity-based crowdfunding has yet to take shape one year after the JOBS Act was signed.
By Kurt Wagner, reporter
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