Techxas Adds Crossroads Exec

Techxas Ventures added a new member to its roster as it gears up to raise its third fund later this year.

Austin, Texas-based Techxas in early May brought on board Brian Smith, founder, chairman and former CEO of Crossroads Systems, a publicly traded networking equipment company. Smith, who was named managing director of Techxas, is also a principal with Austin-based Convergent Investors, a private equity fund comprising of more two dozen investors. Smith will retain his involvement with Convergent.

Bruce Ezell, Techxas co-founder and managing director, says the addition to the investment team comes as the firm not only raises a new fund (which is targeted between $100 million and $150 million), but broadens its focus, as well.

The firm primarily has invested in Texas-based early-stage deals in software, information technology, biotechnology and nanotechnology. With the addition of Smith, Techxas will also concentrate on hardware and semiconductor deals going forward, Ezell says.

Ezell says the fund-raising campaign will begin this fall, and he expects to close in 2005. The target size of the new fund is more than double the firm’s two previous funds combined. In 1998, Techxas raised a $20 million fund. Among its investments from Fund I was the firm’s participation in backing BroadJump Inc., a provider of software for DSL and cable modem access. Motive Inc., which is in registration for an IPO, bought BroadJump last year. That acquisition has given Techxas a stake in Motive’s public offering.

Also, Techxas raised $46 million for Fund II in 2000. Ezell says that fund is about 80% invested. Among Fund II investments was SoloMio, a wireless communications company that has raised $20 million from multiple investors.

As Smith comes on board., the firm separately announced Steven Vandegrift, a managing director who joined the firm for its second fund, left Techxas. Ezell says the firm is working on who will assume Vandegrift’s positions on the boards of Techxas portfolio companies.