Active Capital, a San Antonio-based venture capital firm, announced it has raised a $21.5 million fund focused on providing seed stage funding to business to business software companies.
Originally, Pat Matthews, Active Capital’s founder and CEO, set out to raise a $15 million fund, but it was oversubscribed.
“We closed on the fund Dec. 31st and we’ve made 20 investments so far, really all over the country,” Matthews said.
Active Capital is 100 percent focused on leading seed rounds for business to business, software as a service companies, known as B2B SaaS companies, Matthews said.
In Austin, Active Capital has invested in Pingboard, Servable, Living Security, CloudSnap, and Prosper Ops. And in San Antonio, Active Capital has invested in FunnelAI and SendSpark. Its other investments span from coast to coast and include Agave in San Francisco and PhoneWagon in New York.
“B2B SaaS is the kind of business I’ve been building my whole life,” Matthews said. “I stopped doing stuff outside of my expertise.”
Matthews, a former Rackspace executive, knows the pains entrepreneurs face early on in founding a company. He was a co-founder of Webmail.us, which sold to Rackspace in 2007. He has also invested as an angel investor in more than 50 startup companies.
Matthews is passionate about working with entrepreneurs who are building amazing businesses.
“For the companies we’re investing in it allows them to have one major investor in the seed stage round – as opposed to 15 or 20 investors to put together over time,” Matthews said.
“Pat is one of the rare founders that has built a successful company from scratch, had a great exit, and then had equal success as an executive in a large, fast-growing company,” Graham Weston, co-founder and former chairman of Rackspace, and an investor in Active Capital, said in a news release. “Pat has a unique ability to relate to founders and really knows how to leverage his experiences to help them through the process of building a great company. He really has a lot to offer today’s entrepreneur.”
“I’ve been working with Pat since I invested in Webmail in 2005,” Pat Condon, co-founder of Rackspace, board partner and investor in Active Capital, said in a news release. “Pat has an amazing way of connecting with entrepreneurs and I enjoy collaborating with him and the founders we invest in.”
In 1999, Matthews along with Bill Boebel and Kevin Minnick, founded FieldParty.com, which created searchable city event directories. They dropped out of Virginia Tech University just 20 hours short of getting their degrees to work on the business full time. FieldParty.com raised $120,000 in angel money, largely from friends and family, and on March 10, 2000, the website launched – the same day the Nasdaq started crashing when the great Dot Com bubble burst.
They pivoted the business from a dot com to a B2B SaaS company. It was
“I sold books door to door in Southwest Virginia,” Matthews said. “I worked in many different sales jobs.”
Matthews also had to figure out how to manage $100,000 each in credit card debt.
“It really has shaped a lot of what I do today,” Matthews said. “I’m attracted to companies that are capital disciplined. Companies that have made a lot of progress on very little capital. Founders who have got product to market and have generated revenue and raised little capital to date. They are only raising money relative to the size of the opportunity in front of them.”
Matthews’ journey buys him a lot of credibility with founders, he said.
“It allows me to give them tough feedback when needed,” Matthews said.
“I want to use my experience to help them where I can. I really want to invest in great founders and inspiring founders that are building great companies,” Matthews said. “The right investors and the right advisors can really help founders not screw up the company along the way.”
Editor’s note: Active Capital was one of the sponsors of the
