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National Instruments creates ETF grant program

Austin-based National Instruments said today it has created a grant program to provide software and training services to companies that receive funding from the Texas Emerging Technology Fund.

Companies that receive ETF funding in 2010 are automatically qualified for the NI Texas Emerging Technology Grant, and those who have received funding in previous years can apply for a grant. NI is also accepting applications from companies that qualify for an ETF grant but have not yet received funding.

National Instruments said the goal of its program is to help Texas-based startups get their new product concepts to market quickly by using its prototyping technology.

The EFT was created by the Texas Legislature in 2005 to help expedite the development and commercialization of new technology created in Texas. Twenty-four Austin companies have received ETF funding.

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CEO Rod Favaron said “this is very exciting for us. We’ve been building this business for a number of years and this is a tremendous next step. This marketplace is really exploding and frankly the demand is outpacing our ability to scale. Getting to plug

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To quote Vince Lombardi — “The only place success comes before work is in the dictionary.”

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Rails? Please. Pick a higher performance framework. Doesn’t anyone remember what happened to Twitter when their site was built on Rails? Epic fail. Try something like Django or Lift - anything but Rails!

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Austin’s Lombardi acquired by IBM

Austin-based software maker Lombardi Inc. said today it has agreed to be acquired by IBM Corp.

Financial terms were not disclosed.

Lombardi develops business process management software, which cuts costs by increasing efficiency in everyday business processes such as communicating with suppliers or handling billing.

The company, named after football legend Vince Lombardi, was created in 1998 as a division of now-defunct Austin software company Open Plus Inc. and spun off in 2000.

Over its lifetime, privately held Lombardi raised $64 million in venture capital from Austin Ventures, InterWest Ventures and Palomar Ventures.

CEO Rod Favaron said “this is very exciting for us. We’ve been building this business for a number of years and this is a tremendous next step. This marketplace is really exploding and frankly the demand is outpacing our ability to scale. Getting to plug into a global leader like IBM is a great next step for us.”

Lombardi’s 200 employees, 120 of them in Austin, are expected to remain with the company, Favoron said. IBM officials added that they plan to accelerate Lombardi’s efforts.

“Lombardi has built a world-leading team and product, and the passion and vision that the team has is an incredibly good fit for us,” said Craig Hayman, general manager for IBM Application and Integration Middleware. “Together we will take what’s created here in Austin and deliver it all over the world.”

Lombardi is the latest in a string of acquisitions of Austin tech companies by bigger players. Last month, LifeSize Communications Inc., an Austin-based developer of videoconferencing equipment, agreed to be bought in an all-cash deal by Swiss company Logitech International for $405 million, one of the highest prices paid for a local company in recent years. In September, NetQoS, which sells network performance management software, was sold to CA Inc. for $200 million in cash.

For Lombardi, joining forces with IBM provides access to the technology giant’s global sales force and customer base, as well as product development resources. In return, Lombardi gives IBM a foothold in the fast-growing business process management market.

Forrester Research analyst Connie Moore called Lombardi an ideal pick for IBM.

“Lombardi has been such a shining star in terms of its product, the quality of its customers and the quality of employees. It was always a little company that pulled way above its weight and was just really high caliber,” Moore said. “It’s not surprising that if IBM was in the looking-to-buy mode that it chose these guys.”

Lombardi has 300 customers in a range of industries including financial services, government, health care, telecom and manufacturing. They include Ford Motor Co., Dell Inc. and Pfizer. The company doesn’t disclose revenue, but said that in fiscal 2008, its sales almost doubled, rising 47 percent over those in 2007.

Lombardi has long been considered a candidate for an initial public offering, but Favaron said IBM offered the best opportunity for growth.

“All along, the plan was global dominance, and to fund that you either have to work with a company that already has a footprint or you go public. We always maintained options, and from our perpective, this one makes much more sense for the customers and the investors.”

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Austin group is riding the Google Wave

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Last week I attended a Google Wave Austin meetup to find out more about how folks are using the Internet search giant’s new communications system.

The gathering drew an interesting mix of folks, from software developers to consultants to small business owners, all plugging into Wave in different ways. You can find my TechMonday column about the group — pictured above — here.

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Mirna Therapeutics gets $5 million state grant

Austin-based Mirna Therapeutics Inc., has received a $5 million award from the Texas Emerging Technology Fund to further its biopharmaceutical research and development.

State officials said it is the largest award of its type since the Emerging Technology Fund was created in 2005. Central Texas has been a leading recipient of grants, with more than $35 invested in about two dozen companies.

Mirna is a spinoff of Asuragen Inc., which is developing molecular diagnostic tests. Founder Matt Winkler spun Asuragen off from Ambion Inc. when he sold Ambion to Applied Biosystems in 2006.

The company is focusing on molecular therapeutics for the treatment of cancer and other diseases.

“Mirna is rapidly gathering momentum as a free standing company,” Winkler said, adding that its research is showing effectiveness in treating lung and protate tumors in mouse models.

Mirna said it has eight full-time employees and plans to expand to 20 over the next year.

Mirna is developing MicroRNA Replacement Therapy, which involves introducing synthetic microRNAs back into tumors to trigger their death.

The company is collaborating with the University of Texas MD Anderson Cancer Center and UT Austin in the molecular therapeutic field. It said it currently has two molecular candidates directed against the treatment of tumors in lung, breast, protate and colon cancers.

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Austin’s Gowalla raises $8.4 million

Austin-based Gowalla has raised $8.4 million in venture capital to expand its social networking service for smart phones.

Gowalla received the funding from Greylock Partners, Maples Investments, Shasta Ventures and others. The company has raised a total of $10 million since it was founded in 2007.

Gowalla offers a location-based game that lets users share where they are and track their friends as they move around. Users collect electronic stamps from the places they visit, which can be traded with friends or hidden for others to find. The free service is currently available on the iPhone and on Android-based smart phones. (You can find their instructional YouTube video here.)

Greylock investor David Thacker said Gowalla “has rapidly attracted a passionate user base by creating an innovative, useful service that is also a lot of fun. It’s exciting to discover new places and earn stamps for your passport from places as diverse as Buckingham Palace and the Sydney Opera House to the coffee shop down the street.”

The company says 50,000 users — including 500 in Austin — have signed on since the service officially launched 10 weeks ago. In that time, users have created and checked in at 150,000 locations in over 8,500 cities in 100 countries.

Gowalla previously created the Facebook game PackRat, which debuted last year and involves collecting electronic icons. That game’s popularity — it has more than 450,000 users — spurred the company to create an icon-based game for smart phones. Its theme: “Go out. Go discover. Go share. Gowalla.”

“We just wanted to encourage people to go out and explore the world on their iPhone,” Williams said. “We had no idea we were going to be getting into something that turned out to be as hot as it is.”

Ten of the company’s 11 employees have moved to Austin over the past year from around the country, including Dallas, Kansas City and St. Louis.

“We decided if we’re going to build a product geared toward places and events, and we were developing technology, there’s really not a better place to be than in Austin,” says CEO Josh Williams.

Williams says the company will use the money to expand its engineering ranks here.

“We’re stretched thin, and we’ve got way too much to do,” he said. “Right now we’re really focusing on the product and the user experience, and we’re looking for developers, specifically Ruby on Rails developers.”

You can find my story about the deal here.

Pictured here: Williams, left, and co-founder Scott Raymond M5X220_029C_7.jpg

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Boundless Networks raises $5 million in venture capital

Promotional products company Boundless Network plans to announce Thursday that it has raised $5 million in investment backing to expand its technology.

Austin-based Boundless provides branded merchandise to corporate and nonprofit customers. The company’s online catalog offers thousands of products — from mousepads to pens to t-shirts — on which customers can add their logo.

Boundless received the funding from Austin Ventures and Silverton Ventures. The company has raised a total of $13 million from the two firms since its inception in 2005.

In four years, Boundless has grown from two sales professionals to more than 130, and has more than 6,000 customers, including General Electric Co., Frito-Lay and Aveda Corp., said CEO Jason Black. Boundless expects to have revenue of about $30 million in 2009, up from $24 million in 2008, he said.

Thomas Ball, partner at Austin Ventures, said that “Boundless Network’s rapid growth despite the recent economic conditions is validation that the promotional products industry is ready for innovation. This investment demonstrates our confidence that their technology platform will enable them to rapidly scale their business.”

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DEMO looking for hot Austin startups

Organizers of the DEMO conference are returning to Austin on Dec. 14 in search of promising startups to showcase at their spring event.

The visit is part of cross-country scouting trip to look for breakout products and services. Other cities on DEMO’s December schedule include Atlanta, New York City, Seattle and San Francisco.

DEMOspring 2010 is scheduled for March 21-23 in Palm Desert, Calif. There is no fee to apply for a slot, but companies selected to participate pay $18,500.

The Austin networking event, which is free and open to all, will take place at J. Blacks Lounge from 6 to 8 p.m. You can register here: http://demoinnovatoinaustin.eventbrite.com

DEMO was last in Austin in June, when it was seeking participants for its September show in San Diego.

Fifty-six companies nationwide were chosen from a pool of 1,000 candidates. Two Austin companies — MicroAssist Inc. and Piryx Inc. — made the cut, earning six minutes to make their case to the audience.

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HomeAway brings back the Griswolds

HomeAway Inc. has recruited actors Chevy Chase and Beverly D’Angelo to play the Griswolds in its new national advertising campaign — which will debut during the Super Bowl.

The company, which operates the largest network of Web sites for people who want to rent vacation homes, said the campaign will recapture the spirit of the 1980s comedy classic “National Lampoon’s Vacation.”

“We intend to have a lot of fun with the ad campaign, highlighting the travel mishaps that always seem to follow the Griswold family, while also promoting the value and benefits of vacation rentals as an alternative to hotels,” said CEO Brian Sharples.

In the movie, the Griswolds embark on an ill-fated, cross-country road trip in the Wagon Queen Family Truckster. Homeaway said it has purchased a replica of the Family Truckster for use in the ad campaign as well as for promotional activities that will launch next year.

UPDATE: Some of you have reported seeing the Griswold car parked in front of WholeFoods at 6th and Lamar on Friday. It turns out that display was a teaser to today’s announcement. (You may have noticed that the truckster was getting its battery jumped by another car with a HomeAway logo.)

Sharples says the car is currently parked at an employee’s house, which astute reader Dinop spotted last night. (Something tells me it will be moved shortly. Sharples told me he thought it was in an enclosed garage and was surprised to learn that someone had spied it from the street.)

HomeAway, founded in 2005, did not disclose how much the CBS ad will cost. The company has raised about $397 million from investors, including Austin Ventures, Institutional Venture Partners and RedPoint Ventures.

Sharples has said that HomeAway had revenue of $100 million in 2008 and is on track to increase that by 35 to 40 percent this year. It has been profitable since its inception, he said.

You can find my story about the ad campaign here.

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Silicon Valley venture firm raises new fund

Austin startups could have a new source of capital: Silicon Valley venture firm Norwest Venture Partners has raised a new $1.2 billion fund for a range of investments.

Norwest is an investor in Austin’s LifeSize Communications, which earlier this month agreed to be acquired by Logitech International for $405 million. It also was an investor in San Antonio-based Rackspace Hosting Inc., and was the largest shareholder at the company’s initial public offering last year. Its 14 percent share was valued at $165 million.

As far as I can tell, Norwest’s only other Austin investment was Tivoli Systems, the software superstar that was acquired by IBM Corp. in 1996 for $743 million. (Norwest co-invested with Austin Ventures in both the LifeSize and Tivoli deals.)

Norwest’s strategy for the new fund sounds similar to the approach that Austin Ventures laid out when it raised a $900 million fund just over a year ago. Norwest, like AV, said it will continue to invest in early-stage technology-related startups, but will also make growth equity investments of $25 million to $50 million range in mature companies.

Norwest, however, is also doing deals China, Israel and India, including a $53 million investment in the National Stock Exchange of India. International markets don’t appear to be part of AV’s game plan. Not yet at least.

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ETF invests in another Austin startup

Yet another Austin startup has received money from the Texas Emerging Technology Fund.

This time it’s Ortho Kinematics Inc., which moved its headquarters to Austin from San Francisco five months ago. Founded in 2006, the company is developing noninvasive technology that allows surgeons to evaluate patients’ spine function.

Ortho Kinematics said yesterday that it raised $1.5 million from ETF and another $2 million from PTV Sciences of Austin and Gatebridge Investments of Dallas.

CEO Adam Dietz says that the Emerging Technology fund is what lured his company to Austin. “We are a poster child for the (fund), which made it possible for us to relocate and tap into Austin’s active life sciences business community,” he says. “There’s a really deep pool of talent here, particularly in the spine devices industry, and it’s more business-friendly than California.”

By my count, Ortho Kinematics is the fourth Austin company to receive ETF funding in the past four weeks. Others who recently received money:

ActaCell Inc., $1 million to develop advanced battery cells.

Patton Surgical Corp., $3 million to commercialize devices used in minimally invasive surgery.

Qcue Inc., $1 million to expand sales and marketing of its dynamic pricing software.

You can find my story about Ortho Kinematics here.

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ActaCell gets $1 million grant

Austin-based ActaCell, which was formed to commercialize some of University of Texas’ lithium-ion battery research, has received a grant of up to $1 million from the Texas Emerging Technology Fund.

The company will get an initial $250,000, with more money to follow as the company meets certain benchmarks.

ActaCell previously raised $5.8 million from investors including the Google.org, the philanthropic arm of Google Inc., and DFJ Mercury.

CEO Bill Ott said in a statement that the ETF funding, along with its previously raised money “will allow us to continue to execute our business plan of expanding the technical and management ranks of the company, as well as completing a world class Li-Ion R&D facility.”

ActaCell is focused on the types of high-power lithium-ion batteries typically used in cordless power tools and various types of electricity-powered vehicles, including plug-in hybrids.

I recently wrote about a new crop of Austin startups that has recently received ETF funding. You can find that story here.

UPDATE: You can find my ActaCell story here.

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Digby buys a Seattle startup

Austin-based Digby, which builds mobile e-commerce applications for retailers, said today that it has acquired mobile software startup Movaya Wireless Inc. of Seattle.

Terms of the deal were not disclosed.

Digby CEO Dave Sikora said Movaya’s software will extend Digby’s current platform and overall production capacity.

The deal includes the purchase of Movaya’s Chinese operations, Movaya Chengdu Technology Ltd., which will become Digby Chengdu Technology Ltd.

“Our new offices in Chengdu will allow us to serve the largest and fastest growing market on the planet,” Sikora said. “Every month, seven million new mobile subscribers join the existing 650 million mobile users, and we’re only at the front of the smart phone adoption wave.”

Movaya was founded in 2006 by Phil Yerkes and Stanley Wang. Wang will join Digby as vice president of engineering.

Digby, also founded in 2006, has raised $8 million in financial backing from investors including the BlackBerry Partners Fund. Digby was one of the first recipients of investment money from the BlackBerry fund, which was started last year, and plans to put $150 million into companies working on applications for BlackBerrys and other mobile platforms.

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Utah company buys Austin’s NetStreams

Austin-based NetStreams Inc. has been acquired by a Salt Lake City, Utah, company that develops audio conferencing systems.

ClearOne will pay $2 million in cash and assume $2 million in debt, the companies said Tuesday. The Utah company also will make payouts over the next two years, based on NetStreams achieving certain performance targets.

NetStreams, which develops digital media networks based on Internel protocol technology, will remain in Austin, where it has 20 employees. The company is expecting revenues this year of more than $5 million.

Kevin Reinis, who is NetStreams’ president and chief executive, will leave after assisting with the transition.

NetStreams had raised about $20 million in backing from investors including Austin Ventures.

ClearOne had revenues of $35.7 million for its fiscal year that ended June 30.

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Qcue gets $1 million from ETF

Austin startup Qcue Inc. has raised $1 million from the Texas Emerging Technology Fund.

Founded in 2007, the company sells dynamic pricing software that helps sports team set their ticket prices. Its customers include the San Francisco Giants and the Dallas Stars.

Qcue, which has six employees, previously raised about $1 million from private investors, including Rod Canion, co-founder and former CEO of Compaq Computer Corp., and Art Ciocca, chairman of the Wine Group.

As I mentioned in a previous post, you can find my TechMonday profile of Qcue here.

In other funding news, Austin-based MPOWER Mobile Inc. said it has received strategic investments from Mike Maples Jr. of Maples Investments, and Todd Smith, co-founder of Tivoli Systems Inc. Details were not disclosed.

The company, founded by brothers Roy and Bertrand Sosa, provides international mobile payment services. It said it will use the funding to expand into new markets and continue product development.

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HomeAway signs on as Super Bowl advertiser

HomeAway Inc., which operates the largest network of Web sites for people who want to rent vacation homes, will kick off its first national advertising campaign with a Super Bowl ad on Feb. 7.

CEO Brian Sharples said the ad is part of the company’s effort to raise consumer awareness of vacation rentals.

“We’re going to use the Super Bowl broadcast to launch an exciting campaign highlighting the benefits of vacation rentals to reach more than 100 million people,” Sharples said.

The company, founded in 2005, did not disclose how much the CBS ad will cost.

HomeAway has raised about $397 million from investors including Austin Ventures, Institutional Venture Partners and RedPoint Ventures.

Sharples has said that HomeAway had revenue of $100 million in 2008 and is on track to increase that by 35 to 40 percent this year. It has been profitable since its inception, he said.

HomeAway worked with Publicis on the ad campaign, which will extend through next year. The company didn’t provide details on the ads, which HomeAway began testing in select markets last spring.

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The Q3 venture capital score and more

Venture investing in Austin picked up in the third quarter from the dismal second quarter, but it’s still well below the level of activity a year ago.

Ten Austin companies raised a combined $55.9 million in the third quarter, and another company raised an undisclosed amount, according to a survey by PricewaterhouseCoopers and the National Venture Capital Association.

That’s a 25 percent increase from the second quarter, when Austin companies raised just $44.7 million. However, it’s down 33 percent from the third quarter of 2008, when 19 companies raised $84 million.

Here’s who got the money:

LibreDigital Inc. Digital, publishing services, $15 million

Black Sand Technologies, Mixed-signal semiconductors, $10 million

Illumitex Inc., Solid state lighting company, $10 million

Invodo Inc., Online media delivery services, $6 million

Bandspeed Inc., Wireless networking equipment, $4.5 million

Renew Data Corp., Electronic evidence and data recovery, $4.1 million

NetStreams Inc., Digital entertainment networks, $2.75 million

Rosso Corp., Consumer-focused Internet company, $2 million

Pyxis Technology Inc., Software for chip design, $1.25 million

SpareFoot Inc., Web services for storage space industry, $329,000

Trillion Partners Inc., Wireless broadband services, Not disclosed

And speaking of funding, you can find my latest story about the Emerging Technology Fund, which has pumped $28 million into 20 Central Texas startups, here.

Last but not least, here’s my TechMonday story about Qcue, which has developed dynamic pricing software for sports events.

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Illumitex gets $4.3 million

Austin-based Illumitex Inc. has raised $4.3 million toward a planned $10 million round of funding.

The company, which develops LED technology, did not disclose its investors in a filing with the U.S. Securities and Exchange Commission.

Illumitex received $10.5 million last year from investors including New Enterprise Associates, DFJ Mercury Venture Partners and Aweida Venture Partners, according to a a filing with the Texas State Securities Board and the company.

The company, founded in 2005 by Matt Thomas, has declined to comment on its business or funding, but Thomas said in a statement last year that Illumitex is “developing LED-based luminaires for lighting applications.”

An LED, or light-emitting diode, is a low-power, long-lasting semiconductor device that emits light. LEDs are used in a variety of products, including high-end outdoor electric signs and video displays, automobile lights and lamps.

Jimmy Treybig, a venture partner with New Enterprise, serves on Illumitex’s board.

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Troux raises $10 million

Austin-based Troux Technologies Inc. said Thursday it has raised $10 million in new investment to help it expand geographically and accelerate sales.

The investment was made by Austin Ventures, Greylock Partners and a consortium of Scandinavian investors.

The deal is only the third investment of $10 million or more in an Austin company this year. NextIO, which develops data center communications equipment, raised $15 million in June. Electronic publishing firm LibreDigital raised $15 million in July.

Troux’s software helps corporations keep track of their extensive collections of hardware and software. The company has raised $60 million in venture capital since its inception in 2001.

CEO David Hood said in a statement that “despite the global recession, we have made significant progress in our expansion plans, proving our ability to win business and drive customer success.”

You can find my story about the deal here.

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FiveRuns is sold, HomeAway gets a new home

Austin-based FiveRuns Corp. said today it has been acquired by WorkThink, a company that appears to still be a work in progress.

FiveRuns was founded in 2005 and backed by $9.2 million from Austin Ventures. The company’s software helps developers, administrators and service providers using the Ruby on Rails Web application framework to build, run and monitor applications.

FiveRuns announced the sale on its Web site, where it also said that on Oct. 16 it will end operation and support of Dash, which was a metrics, storage, reporting, and communication tool for applications connected to the Web.

As for WorkThink, little is known. Its Web site is under construction and offers only this: “We are in the process of developing great products for important people…”

On another note… if you want to read about a company that’s growing, check out my story on HomeAway here.

Today the company is throwing an employee party to celebrate its new 51,000-square-foot headquarters at West Fifth and Lamar.

Some outtakes:

HomeAway has 540 employees worldwide, 219 of them in Austin. Its workforce has grown 54 percent since last year, and it’s hiring — mainly in developers and marketers.

A year ago, the company set a Central Texas record by raising $250 million in financial backing, the biggest single private equity investment in an Austin company. In all, HomeAway has raised about $397 million from investors including Austin Ventures, Institutional Venture Partners and RedPoint Ventures.

It posted $100 million in revenue last year and is on track to grow that by 35 to 40 percent his year, CEO Brian Sharples says.

Is there an IPO in its future?

Sharples says: “We’re keeping the bankers at bay for the time being. We’re well-financed at the moment and don’t have a tremendous need for cash. Being a private company affords us the ability to make strategic investments without managing the day-to-day public shareholder market. We won’t file to go public this year, and the expectation is we won’t next year either. But in 2011, the timing could be right.”

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Austin Ventures heads to the Belmont

I swung by the Belmont yesterday to watch Austin Ventures’ new Entrepreneur Hours program in action.

The idea behind the day-long event was to connect with startups on an informal level. “We want to get out of the board room and into a more comfortable setting,” venture partner Mike Dodd said. “Where we can just meet one-on-one and provide informal feedback.”

A year ago this week, AV announced it had raised $900 million to invest in everything from two-person startups to $50 million deals. Since then, it’s the $50 million ones, including this one and this one, that have gotten the most attention.

But Dodd says the firm is still doing early-stage investing, and cites as proof a $2 million investment earlier this month in an Internet startup led by former Dell executive Manuel Rosso.

On Tuesday, in a dimly lit side room at the Belmont, Dodd met with 13 startups for 20 minutes each. I sat in on a session with a photographer trying to launch an online service to sell stock photographs. As it became clear that the product was still a work in progress, Dodd suggested tapping friends and family to complete development, and threw out ideas for better describing the service.

“We’re not trying to find a deal today,” he said afterwards. “This is more about getting conversations going.”

AV will hold the event in Austin on a quarterly basis, and is planning events in Houston and Dallas for next year. For more information, go to aventrepreneurhours.com.

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Six Austin companies at DEMOfall

Six Austin companies will be taking the stage at DEMOfall in San Diego this week to launch new products.

Fifty-six companies were chosen from a pool of nearly 1,000 candidates to make a six-minute pitch in front of DEMO’s audience of venture capitalists, industry executives and the media.

Two Austin-based companies — MicroAssist and Piryx Inc. — made the cut. MicroAssist, founded in 1988, offers e-learning products and services. Piryx, founded in 2005, sells online software that helps political campaigns manage fundraising, volunteers and other tasks.

This year DEMO is starting a new program called AlphaPitch, which features 14 very early-stage companies making 90-second pitches.

Four Austin companies earned spots:

Gelato Dating, which is launching an online dating site.

InfoChimps.org which has developed tools to organize and connect datasets.

—Melior Technologies, which is launching GuruStorms.com.

Ringful, which has developed a platform to bring together smart phones with personal health records and information.

I’ll have a story in tomorrow’s paper about the show. UPDATE: You can find the story here.

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