Krishna Srinivasan, Founding General Partner at LiveOak Venture Partners.
“But there was not as much capital available as many of the local entrepreneurs would attest to,” said Krishna Srinivasan, general partner with LiveOak VP.
So, in 2013 to 2014, Srinivasan and his partners raised the $108 million LiveOak Venture Partners Fund I, “which shockingly even to date is the largest fund raised for technology venture capital here in the Texas market going back to 2008,” Srinivasan said.
“Again, an indication of how capital starved this amazing market is,” he said.
LiveOak VP’s strategy is to be the first institutional investor in Texas-based tech companies. The VC firm generally writes $2 million to $4 million checks and takes board seats in the companies it invests in. It tailors its involvement to the needs of each of the startups it invests in, Srinivasan said.
In this episode of Ideas to Invoices, Srinivasan and Ivelin Ivanov, CEO and co-founder of TeleStax, a startup that enables service providers to develop communications applications, discuss the investment landscape for early stage technology entrepreneurs in Austin and Texas. Telestax is a LiveOak VP portfolio company and is the firm’s latest investment.
LiveOak VP is raising a new $110 million fund, according to documents filed with the U.S. Securities and Exchange Commission. But Srinivasan declined to discuss the details citing regulatory compliance.
Ivelin Ivanov, CEO and co-founder of Telestax
In 2011, Ivanov and his co-founders established Telestax and raised $1.2 million in seed stage funding. The founders had been through the early stages of building Web infrastructure with JBoss/RedHat.
They saw the huge traction of web applications and mobile applications and saw it as a challenge to connect the two.
“Telestax came out of an idea, curiosity, and passion for enabling developers to build creative applications that involved real time communications,” Ivanov said.
“Now it’s a mainstream adopted trend where every disruptive application from real estate to HR to retail to Rideshare to Austin travel they have very significant real-time communications component,” he said.
Telestax makes a communications platform called RestcommOne, which blends telecommunications applications with enterprise applications to deliver real-time communications.
In July, LiveOak Venture Partners led a $4.7 million Series A funding round for Telestax. The company plans to use the money on product development, customer support, and marketing. Telestax has more than 170 commercial customers including Avaya, MetTel, Ping An Bank, T-Mobile, Unifonic and NTT-AT. Its platform supports 900 million calls and 200 million messages daily.
In general, LiveOak VP looks to back “the best and brightest companies in Texas,” Srinivasan said
Originally, when Srinivasan met Ivanov two years ago, the company had a solid team tackling a problem in a large market. In a few years, the company demonstrated remarkable traction and did it in a scrappy fashion with little capital, Srinivasan said.
Overall, LiveOak VP has 18 portfolio companies with 14 investments in Austin, two in Dallas, one each in Houston and San Antonio. One of its investments, StackEngine, got acquired by Oracle. It’s about to announce another investment in an Austin startup bringing the number of portfolio companies to 19 with 15 investments in Austin.
Srinivasan sees Austin’s investment landscape improving.
“There feels like there is a lot of capital available for the first round,” Srinivasan said. “The challenge comes in with the Series B round.”
LiveOak VP is cultivating relationships with firms on the coasts to come in and work with these opportunities, Srinivasan said.
“Things are a whole lot better,” he said.
The LiveOak VP fund is having some great success in the portfolio, which has raised $100 million in last 12 months, Srinivasan said.
“If we are there as the first institutional investors, big investors will follow us in subsequent rounds,” he said.
To be considered for an investment, entrepreneurs can submit plans on LiveOak VP’s website or get introduced by anyone that knows the LiveOak VP partners. Entrepreneurs can also email one of the partners directly using their first name and the domain LiveOakVP.com so Krishna@LiveOakVP.com.
“But you don’t need an introduction,” Srinivasan said. “A partner takes a look at every single email submission so we don’t miss out on a diamond in the rough. CS Disco came to us that way.”
It’s also a complete fallacy that Austin entrepreneurs don’t go after big ideas, Srinivasan said.
“Our portfolio is filled with people going after big ideas,” he said. “Telestax is a big idea.”
For more on the conversation with LiveOak’s Srinivasan and Telestax’s Ivanov, please listen to the entire Ideas to Invoices Podcast. And please subscribe, rate and review Ideas to Invoices on iTunes.
Leave a Reply