A critical step for companies seeking growth-stage investment is making connections with venture capital firms and other investment groups who are looking to get involved in promising businesses. That’s been especially true for companies in Texas for years, as the lack of a conference that could bring founders concentrated in Texas together with potential funders.
Thankfully, that has changed after the first annual Texas Venture Growth Forum – a conference held in Austin and presented by Texas Entrepreneur Networks and Hermes Investment Group – that served as a two-day “speed dating” event for entrepreneurs and investors.
Many connections were made between representatives of the 27 companies and 42 investors who attended, with a recently announced Series B investment of $16 million in Austin-based NSS Labs as one of the biggest success stories from the gathering. That deal saw LiveOak Venture Partners and Delta-v Capital team to help NSS Labs continue to grow as a leader in the information security industry.
Venu Shamapant, a general partner with LiveOak, selected five businesses his company had early stage investments in to attend the conference in hopes of finding partners who could help them grow to their full potential.
“We’d identified the best companies that were in the right stage to get in front of people who were looking to become involved in a growth-stage company,” Shamapant said. “For some of them maybe it wasn’t exactly the right time to do a deal, but they got to start building relationships with late-stage firms and that makes it easier to re-engage when the time is right.”
Shamapant said the conference and its emphasis on capital for Series B and growth will help the investment climate in Austin and Texas as a whole move beyond its recent emphasis on startups and early stage funding.
“The focus has been on been on early stage companies, but you think of it sort of like a pig moving down the snake… now there are companies that have progressed to the Series B stage,” he said. “The conference is focused on fixing that and being a catalyst so more interactions happen and people are talking to each other continuously.”
Dan Williams, vice president of Delta-v with offices in Dallas and Boulder, said he went into the conference looking for companies with more than $20 million in revenue and operating at or close to break-even financially. NSS Labs fit that profile and is concentrated in information security, which has been an interest of Williams for many years.
He said he and other investors were pleased to learn that Texas finally had a geographically focused investor conference akin to similar events in cities like San Diego, Atlanta, and Denver.
“It’s great to see a community coming together there and for a tech hub that’s as prominent as Austin is, it’s great to have an event that brings the right people together,” he said. “A conference is nice because the leads are immediate and you can move forward from there, whereas most other times deal flow comes from relationships and networks and that is a much longer process for everyone.”
The timing of the fall 2015 conference was perfect for NSS Labs’ CEO and president Vikram Phatak and his management team, who had just decided to pursue a Series B round. The $16 million from LiveOak and Delta-v will let the company expand its offerings, build its customer base and grow its headcount from 70 employees to more than 120 by 2019.
Phatak said the conference setting offered a “pre-filtered” selection of possible investment partners, with 15 meetings that eventually led to a deal.
“A conference allows you to very efficiently check off the ‘no’ box for a lot of people, so you can be as efficient as possible with your time and focus,” Phatak said. “What it did for us is put us in front of people who had an interest but who we might not have met otherwise.”
With the Austin and Texas entrepreneur community being fairly close knit, Phatak expects word about the advantages of attending to grow as the second event nears.
“I know several smaller companies that as the conference gets closer I’ll reach out to their investors and encourage them to have their companies go to it,” he said. “You look at something like TechCrunch in the bay area and that’s a place where deals happen, and it gets a reputation, and then more deals come about because of that.”