Christopher Calnan

When Austin Ventures closed on a nearly $900 million fund in 2008, it appeared that Central Texas’ dominant investment firm was well-positioned to capitalize on the gathering credit crisis.

But Austin Ventures’ deal volume slumped during the last couple of years, and the portion of the investments it makes locally declined during 2009 for the second consecutive year. The firm has been a major source of capital for dozens of local technology companies since 1979, and several factors — including its fund size — are contributing to its waning local influence, industry observers said.

Austin Ventures made more investments in 2007 than it did through all of 2008 and 2009. More importantly, 31 percent of the firm’s 2009 investments were in Austin-area companies compared with 56 percent during 2008 and 62 percent during 2007, according to Dow Jones VentureSource.

When Alamofire Inc. closed an $8.4 million Series B round of financing earlier this month, the size of the funding was reasonably impressive — especially during a global recession.

More importantly, the deal marked a departure among Austin investments in that Alamofire’s dominant product, called Gowalla, is a riskier consumer-based service rather than yet another enterprise-based business.

Gowalla, as the company is now being renamed, is a location-based service, meaning it enables cell phone users to send messages to other members about where they are and what they’re doing using global positioning system.

It’s a riskier investment because it’s based on a game, and converting players to profits is something few have done.

Dell Inc.’s move into the smartphone market is risky but could provide the computer maker with a service-based revenue stream rather than another device producing low profit margins.

Round Rock-based Dell (Nasdaq: DELL), which revealed in November that it planned to launch a Mini 3i smartphone in China, could enable revenue sharing by bundling, much like it has already done with its netbooks, industry observers said.

During last month’s quarterly earning call, Chief Financial Officer Brian Gladden said Dell’s smartphone business will be “carrier-centric.”

He said the company’s smartphone play is a natural extension of its netbook business, which Dell sold with service provided by AT&T Inc. (NYSE: T).

Netbooks are scaled-down and more compact laptop computers that have proven popular with consumers because of their low cost and mobility. But like smartphones, netbooks provide more profits from the wireless service subscriptions than from the devices themselves.

The Austin Technology Council gave its previous president hefty salary increases over the last three years and in 2008 paid her nearly one-third of the organization’s revenue while the group operated at a deficit amid sharply declining revenue.

Former President Alisha Ring’s salary surged 30 percent during the last two years while the group’s revenue declined 36 percent, according to the group’s filings with the Internal Revenue Service.

ATC officials say the position’s salary is tied to the group’s financial health and revenue-generating metrics such as new memberships, sponsorships and events. But Ring’s salary increased during the last two years while ATC revenue reverted back to 2005 levels and the organization posted a net loss.

The nonprofit paid Ring $97,807 during 2008 compared with $75,000 in 2006, which was her first full year on the job. But last year’s revenue of $347,461 was comparable to the $344,705 in revenue the group reported in 2005, IRS filings show.

Buying a nearly $4 billion company is one thing, but successfully integrating it is a whole other challenge.

When Dell Inc. committed to buy Plano-based Perot Systems Corp. for $3.9 billion, it followed the lead of rival Hewlett-Packard Co., which last year bought another Plano company founded by Ross Perot, Electronic Data Systems Inc., for $13.1 billion.

But the question arises whether Dell executives can follow HP’s lead again and pull off the largest acquisition in Dell’s history.

The answer may lie in David Johnson.

Austin-based software companies have recently split their CEO and chairman positions, mirroring a trend that industry observers say has become more popular among companies that have grown beyond the startup stage.

Last week, Perficient Inc. (Nasdaq: PRFT) reported that in September President and Chief Operating Officer Jeffrey Davis will succeed 10-year CEO Jack McDonald, who will remain board chairman.

The announcement came as the company posted second-quarter losses, but officials said the two events were unrelated and noted that Perficient initially reported the succession plan in a March filing with the U.S. Securities and Exchange Commission. In the filing, the company indicated that McDonald had formed a committee to evaluate a possible McDonald campaign for U.S. Congress.

In June, Forgent Networks Inc., which is in a proxy battle with shareholders, replaced then-CEO Richard Snyder with then-Chief Operating Officer Nancy Harris. Snyder said he initially proposed the change last year and that the proxy fight provided an additional reason to do it.

Such shifts in leadership can be for appearances, whether during diminished profits or proxy fights.

Serial entrepreneur and investor Robert Fabbio will know soon whether he’ll be able to keep a multimillion dollar dispute with a national venture capital firm in a court as he wants or if it will be pushed into arbitration — a process that could would put him at a tremendous disadvantage.

Fabbio and two others are suing TL Ventures, the Pennsylvania-based VC firm that previously operated an Austin office, over fund distributions that the firm wants returned, according to the lawsuit filed in Travis County District Court in December 2008.

The suit asks the court to declare that TL Ventures isn’t entitled to force Fabbio or the other plaintiffs to return any money until the firm’s venture capital funds are dissolved and until the plaintiffs review certain records kept by TL Ventures.

In addition to Fabbio, who is now CEO of WhiteGlove House Call Health Inc., the suit includes Stephen Andriole, a former TL Ventures principal, who is being asked to repay $253,000; and Stanley Tims, a former TL Ventures managing director.

While many technology companies are fighting the pull of a global recession, Forgent Networks Inc. is scuffling with a group of its investors.

The Austin-based company that operates as Asure Software is in a proxy fight with investors who oppose management’s plan to take the company private. And that fight has led to a lawsuit.

In January, Forgent’s management disclosed a plan to save on corporate compliance costs by reverting to operating as a private company. But hedge fund operators Pinnacle Partners and Red Oak Partners LLC — which combined directly own 7.35 percent of the shares and indirectly hold almost 16 percent, according to SEC filings — want the company to remain public. Their charge is being led by Red Oak portfolio manager David Sandberg,

The two sides have since traded allegations in federal regulatory filings. Then earlier this month Forgent filed a lawsuit in the U.S. District Court for the Western District of Texas’ Austin Division against Sandberg and several other investors alleging violations of federal securities laws.

Austin Ventures’ $50 million funding of a new software company in June was the latest in a series of so-called roll-up deals that many say demonstrates its strategy to act more like a private equity firm and less like a venture capital investor.

Austin Ventures, the city’s dominant VC firm, has dedicated about two-thirds, or nearly $600 million, of its latest fund to growth equity fundings, which include roll-ups, firm officials said. A roll-up is a company created, typically by an investment firm, by acquiring and combining multiple companies.

Such deals underscore Austin Ventures’ shift away from early-stage venture capital, a type of financing that officials said during the closing of their previous fund in 2005 was the firm’s “bread and butter.”

That bread and butter appears to have become more of a side dish.

Dell Inc. may lose more ground to rival Hewlett-Packard Co. before it generates enough services business to regain its spot as the No. 1 personal computer maker in the United States.

During the first quarter, Round Rock-based Dell lost that spot to California-based HP for the first time since 2001. The turnabout happened because Dell’s U.S. shipments decreased 16 percent while HP’s increased 11 percent during the quarter, industry research firms reported.

Dell’s slow retail store sales combined with a recession-induced slowdown in sales to business customers contributed to the ranking change. Also, Dell has been slower out of the gate with the very popular low-priced netbooks, while competitors HP (NYSE: HPQ) and Acer sell huge quantities of them, said Mikako Kitagawa, principal analyst for Gartner Inc.

And since business customers, which include government and educational clients, account for 60 percent of Dell’s U.S. market, the economic downturn’s effect was heightened, she said.