Austin Ventures General Partner and AVX Partners Founder Chris Pacitti is partnering with two other high-level Austin investors on a new venture capital fund that could deliver some of the growth capital Austin area startups -- and those in other emerging tech hubs -- have been so hungry for.
Elsewhere Partners, a new VC firm led by Pacitti and two other experienced founders, investors and tech executives, plans to provide growth capital to tech startups that already have some traction and revenue -- but haven't significantly diluted ownership with big seed rounds.
The new firm looks to invest $1 million or more into promising software startups.
Austin Inno sniffed out the new fund a few weeks ago when Pacitti, who is an Austin Inno 50 on Fire winner, updated his LinkedIn account noting the new firm. Now, the new firm is hitting the headlines as it seeks emerging software startups outside of Silicon Valley and other big time tech hubs.
“As more private equity firms look to acquire software companies, the exit model for venture-backed startups is ripe for radical change," said John Thornton, an Elsewhere Partners co-founder who is also a long-time Austin Ventures general partner and co-founder of the nonprofit news organization Texas Tribune. "We intend to help all of our portfolio companies become exit-ready on their own timeframe and ensure there is a broad range of options for realizing value."
Alongside Pacitti and Thornton is Sam Kentor, who is a former senior associate at JMI Equity and senior associate consultant with Bain & Company.
Pacitti says Elsewhere Partners aims to invest in non-traditional software companies -- not just the promising ones that may carry a ton of risk.
“Most venture capital firms are busy chasing unicorns; this ‘billion-or-bust’ strategy means that they have to accept an excessive number of losses," he said in a news release. "That’s not our approach. We see a tremendous opportunity to invest in software companies that don’t fit the traditional model -- these ‘outliers’ are located beyond the boundaries of the major VC hubs and have proven their business models without standard Series A or B rounds thanks to a customer-centric culture."
The new firm has a powerful group of operating advisors to help the startups it invests in.
Advisors include:
- Mike Bennett, the former CEO of SolarWinds, chairman of Idera Software
- Bill Bock, president of Silicon Labs
- Kevin Cunningham, president and founder of SailPoint Technologies
- Don Duet, president and COO at Vapor.io
- Doug Erwin, former CEO of The Planet and PentaSafe Technologies
- Howard Greenfield, SVP WW sales of SailPoint Technologies
- Randy Jacops, CEO of Idera Software
- Cam McMartin, CFO of SailPoint Technologies
- Mark McClain, CEO and founder of SailPoint Technologies
- Jack McDonald, chairman and CEO of Upland Software
- Michele Perry, former COO of GetWellNetwork, former CMO of Sourcefire (now Cisco)
- Rita Selvaggi, CMO of AlienVault
- Josh Stephens, former Chief Strategy Officer of Idera Software, former VP of technology and head geek for SolarWinds
- Kenny Van Zant, former head of business for Asana, former chief product strategist for SolarWinds
- Heather Zynczak, CMO of Pluralsight
The group of advisors will operate a little differently than those at traditional VC firms. Instead of naming partners in the firm as board members in portfolio companies, it will put its advisors on the board of the companies it invests in to provide more day-to-day, real-world insights.
But Elsewhere Partners isn't a purely Austin organization. In fact, its first investment went to an Atlanta startup -- Itential. It is also leading a round in Nashville's Relatient, a health tech startup.
Pacitti last year founded AVX Partners, and the new fund announced an investment in Tasktop, a Vancouver software company. That's also a new investment for Elsewhere Partners. Elsewhere Partners has also added funding to Austin-based Vyopta, and it says it is in talks with startups in Denver, Charlotte, Chicago, Dallas, Phoenix, Washington D.C. and several other cities.
