Exit early and exit often. That would seem to be the pitch that a newly-formed private equity firm is making to software startups in Austin and beyond.
Think3, a private equity firm founded by serial entrepreneur Andy Tryba, announced Thursday it plans to begin acquiring SaaS startups from a new $1 billion fund.
The concept is pretty simple: Think3 acquires software startups that have traction but aren’t necessarily wildly successful. It then takes over management and transitions the startup’s team over the course of 100 days to start on a new SaaS product. Meanwhile, Think3 provides a $500,000, zero equity angel round to the founders to start their new company.
Think3 says its startup transition process has been used with 50 companies in the past 10 years.
“We’ve learned that what founders really want is another shot at building a great company — but they don’t want to let their current teams, investors or customers down,” Tryba said in a news release. “We are the only fund designed to encourage founders and their teams to go start their next company.”
Tryba, who is founder and CEO of Think3, is also listed as CEO at Crossover, DNN Corp., Engine Yard on his LinkedIn page. He is perhaps best known in recent years as the founder and CEO of RideAustin, the ride-hailing nonprofit that formed when Uber and Lyft abandoned Austin for a year during a regulatory battle. And you may notice that Think3 share a similar, minimalistic logo with RideAustin and Crossover.
Tryba couldn’t immediately be reached for comment. But, in the news release, Think3 notes that it is part of the ESW Capital family. ESW Capital is an Austin-based firm that acquires and lends money to business software companies. Among its portfolio are Trilogy, Versata and Ignite Technologies.
Think3 believes too many founders hang on to their business for too long, and it notes that exits, at least in early stages, have been on the decline in recent years.
“We developed this fund to enable founders to take more shots on goal,” Tryba said in a statement. “Founders should think of ‘time’ as their portfolio — making the call earlier if their current company is growing fast enough for exit velocity. Too many founders hang on too long hoping for a growth miracle — killing their career.”