Christopher Calnan

The love affair between venture capitalists and Austin information technology companies is cooling, but other sectors are filling the void.

The portion of the capital collected by local IT companies decreased from 89 percent of the total in 2003 to 55 percent last year. It’s not so much that investors are cold on IT. It’s more a function of the next generation of IT firms not needing venture capitalists as much.

Makers of Web-based tools, cloud computing solutions and open-source software simply don’t need loads of capital to pay for expensive development tools, racks of servers or even office space.

So where are venture capitalists turning? Several places, but mainly tried-and-true business sectors such as health care and financial services.

A lawsuit filed last month by an Austin woman is the latest in a string of gender-discrimination cases brought against Dell Inc., the computer giant with a human resources department allegedly described by a Dell executive as “one of the toughest old-boy networks” in the company.

The latest lawsuit, filed Dec. 22 by Ellen Fleming in the U.S. District Court for the Western District of Texas, is at least the third gender-discrimination case brought against Dell since October 2008.

Fleming, a former level D-3 executive at Round Rock-based Dell (Nasdaq: DELL) who held several finance and comptroller positions during 10 years at the company, alleges she was treated differently from male counterparts and was fired in March 2009 after refusing to quit when she was demoted.

The lawsuit also alleges that Dell withheld her annual bonus because Fleming declined to waive her rights to file a claim against the company. The Harvard-educated Fleming is now teaching at the Acton School of Business in Austin.

Google’s $6 billion offer to buy Groupon Inc. belies the reality that group buying is a crowded and immature sector in which local companies are experiencing varying levels of success. And while some are finding it difficult to attract investors, a new one is jumping into the mix with a healthy dose of investment capital.

Austin entrepreneurs said investors are hesitant to back local group-buying companies despite Chicago-based Groupon’s popularity and Google Inc.’s (Nasdaq: GOOG) recent attempt to buy it. Officials at Localiter LLC and GivEngine Inc. said they’re meeting few takers when seeking the expansion capital needed to grow their businesses in the Groupon tradition.

In contrast, Austin-based Moolala Inc. reported receiving $384,000 in funding from seven investors this week, according to a filing with the U.S. Securities and Exchange Commission. The group-buying company, which has been operating in stealth mode since it was founded in November, is led by Joshua Chodniewicz, the former CEO of California-based Art.com Inc.

When Treaty Oak Bank applied to the federal government for $3.3 million in financing in late 2008, the bank projected to post a $198,000 profit during 2009. Instead, it posted a $6.9 million loss.

The Austin-based bank, which was placed under a consent order by federal regulators in February and agreed last month to be bought by a Fort Worth company, received the capital by selling equity to the government through the Troubled Asset Relief Program, or TARP, according to its October 2008 application filed with the Treasury Department.

The federal government essentially became a shareholder in the community bank that reported a rapidly rising number of nonperforming loans during an 18-month period. Now, two years later, it’s unclear how much that equity investment is worth — if anything at all.

The asset value of the Ex-Students Association of the University of Texas took a major hit during the last fiscal year as investments in public markets plunged.

But the organization that’s best known as Texas Exes still managed to post nearly $60 million in assets, making it one of the largest in the nation.

The sharp decline prompted by the volatile stock markets during the recession has been mirrored by most other alumni association endowments. Yet Texas Exes learned from the experience and last year hired a management firm that’s taking a more conservative approach by reducing its reliance on publicly traded equities, officials said.

For the year ending April 30, 2009, Texas Exes’ assets slumped to $59.7 million compared with $83.9 million during the previous year, according to a filing with the Internal Revenue Service.

Dell Inc. spent nearly $3 million last year for lobbyists working on a variety of bills before Congress, including multiple measures related to worker rights.

The spending came in the same year that Round Rock-based Dell (Nasdaq: DELL) settled a $9.1 million class-action gender-discrimination lawsuit projected to involve more than 2,000 female Dell employees and former employees.

Federal lobbying reports indicate that the company’s lobbyists were active in the Lilly Ledbetter Fair Pay Act of 2009 and the Paycheck Fairness Act, both of which promote equal pay for women.

Dell officials said company lobbyists were “tracking” the gender discrimination legislation rather than actively lobbying in opposition to the bills. But the company acknowledged that it is opposing another proposed measure that would enable workers to have their day in court during disputes with employers.

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.