Early-stage venture capital firm Silverton Partners is adding talent to its team as it searches for companies to back with its nearly $250 million seventh fund.
Silverton announced July 13 the hires of Rob Taylor as operating partner and Addie Rasche as senior associate.
Taylor is well-known to the VC firm — he was co-founder and CEO of logistics startup Convey, a former Silverton portfolio company that was acquired for $255 million by Project44 in 2021. Before that, Taylor was president of BlackLocus, an e-commerce software company that was acquired by The Home Depot for $55 million in 2012.
Taylor said the time was right to go from founding companies to guiding founders, at least for the time being.
"At this moment in my career, having been a builder now for 30 years, I think making a transition to helping others build is where my passion is," he said. "At this point, I want to work with people I know and trust. It just seemed like a great fit."
Rasche formerly oversaw strategic growth and new projects at C3 Presents. She was also a part-time associate at Silverton while pursuing her MBA at the University of Texas at Austin McCombs School of Business.
"Rob and Addie are both exceptional individuals who have successful entrepreneurial backgrounds and bring substantial operating experience to the Silverton portfolio," Morgan Flager, the firm's managing partner, said in a statement. "Their knowledge comes from the journey of being builders themselves and I’m thrilled to learn from and work with them in support of our founders."
The new hires come as Silverton works to deploy the $248 million fund announced last summer — its largest ever.
It's an odd time for venture capital. VC firms raised huge sums in the wake of the pandemic, but startup funding has plateaued in the past year. Austin-area companies raised about $1.1 billion across 94 deals in the second quarter, compared with nearly $962 million across in 109 deals in Q2 2022, according to new data from PitchBook Data and the National Venture Capital Association.
At the same time, nationwide exit value is pacing to finish 2023 at $20 billion — the lowest figure recorded in the past decade by nearly $50 billion, according to Kyle Stanford, lead VC analyst at PitchBook. That means smaller returns flowing back to VC firms, extending the venture stalemate amid a slowdown in initial public offerings.
Silverton has 12 employees. The goal moving forward is to grow to meet Austin's capital needs while remaining true to its roots as "the first institutional investor for the exceptional founders we partner with," Flager said.
The firm has thus far deployed about 6% of the roughly $250 million it raised with its seventh fund, Flager said. That's across eight investments, with another 15% earmarked for follow-on investments. Silverton is still waiting to deploy the rest, with a focus on technology-centric investments in "exceptional entrepreneurs who are committed to attacking growth markets with proprietary products or services."
While Flager acknowledged it's a "tricky" time to be raising capital as an entrepreneur, he pointed out that the venture and private equity firms also have "near record amounts of un-deployed capital." It's just not going to be handed out as liberally as it might have been in recent years.
"Investors still want growth, but they want efficient growth and manageable burn rates," Flager said. He advised founders to be patient and focus on "attractive unit economics" while maintaining a commitment to their vision.
If all this sounds like a difficult tightrope to walk, that's exactly what Taylor has been brought on to help navigate. He said his primary responsibility as an operating partner will be to advise founders on an ad hoc basis and to serve on the boards of portfolio companies.
Taylor believes now is a "phenomenal time to be raising money," primarily because of the amount of capital waiting to be deployed. But entrepreneurs also need to realize that the ecosystem has "been reset to where we were four to five years ago."
Whereas founders were once being rewarded with high valuations for growth-at-all-costs mindsets, investors are now exhibiting more discipline and looking closely at the path to profitability.
"It's just better fundamentals at the end of the day," Taylor said. "You can still create wildly successful businesses under this paradigm."
