Funding for startups

Texas Startups Tap Another Fund

The venture capitalists at Memphis-based SSM Ventures have started another VC firm, Verity Ventures, to handle investments in Austin, Texas, and the Telecom Corridor area of Dallas.

"Each market has its own characteristics that require a different investing mentality," says Dick Moeller, a general partner at Verity Ventures. "Texas tends to have more Internet infrastructure, telecom, and information technology companies, whereas cities such as Atlanta tend to be more services oriented."

Within the next six months Verity intends to raise its first fund of between $100 million and $120 million, says Moeller. Moeller and his SSM partners Eric Jones and Bill Harrison will have dual roles with SSM and Verity, and the two separate funds will co-invest in some companies.

Verity's investments will likely range from $100,000 for a seed round to between $6 million and $8 million for a first or second round.

Neither Verity nor the $156 million SSM fund is exclusively focused on telecom or optical startups. Verity, however, will likely fund more telecom-related companies than SSM because of its location, Moeller says.

With SSM, Moeller and company's only Texas-based telecom investments to date have been in backing TelOptica Inc., a telecom software specialist, and Lasercomm Inc., a laser manufacturer. Both are based in Richardson, Texas.

-- Phil Harvey, senior editor, Light Reading http://www.lightreading.com

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