Written by Venu Shamapant (General Partner, LiveOak Venture Partners)

There has been a Medium post floating around recently that attempts to shed a light on the startup capital landscape in Austin. I hope that you find this (my first ever blog post) to be a helpful alternative perspective on early stage investment in Texas through the lens of a practicing venture capitalist.

The blog post starts by mentioning an offer of investment from an Austin based “venture capital firm” (emphasis added by me). My partners and I have been investing in early stage companies in Austin for over 15 years now and have worked at or with most of the Austin based venture capital firms of relevance and we cannot imagine any one of them asking for those terms. Anyone that has participated in building a successful early stage company knows that highly punitive terms like that leave little incentive for the team to succeed and last I checked owning 100% of zero is still worth zero. So, I suspect there is a bit of a liberal definition of “venture capital firm” there. Since the only active firms cited in the article are LiveOak and Silverton, I want to be explicit that LiveOak has never done it and I am confident neither would Silverton. I don’t doubt that Richard did receive terms like this, but I can’t imagine it was from one of the large venture capital firms in Austin.

A couple more factual observations that influence the article’s conclusions and then I will address the bigger themes: