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Venturing to the Top

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Danielle Allen, chief operating officer of ATX Seed Ventures, is bringing a dose of Wall Street to Austin. 

By Elizabeth Ucles, Photo by MacKay Shields

With 15 years of Wall Street experience under her belt, Danielle Allen is working to make ATX Seed Ventures, an early stage venture-capital firm, the next major player on Austin’s startup scene.

Allen hails from Long Island, N.Y., but made a detour to New Orleans to attend Tulane University before making her way back to the Big Apple in 2001 to work as a retail broker with Citi Group. Allen’s position with Citi Group proved challenging, as many clients declined to put money into what was at the time a falling market after the attacks of Sept. 11, 2001.

Deciding to put work on the back burner, Allen went on to obtain her master’s degree in finance and investments from the Zicklin School of Business in New York City. After graduating in 2005, she quickly started to climb the career ladder, taking positions with top hedge-fund companies and investment banks in the city, including Perry Capital, Millennium Management, J.P. Morgan and Nomura.

In 2016, Allen and her husband headed to Austin for her husband’s completion of his second residency at Dell Seton Medical Center at the University of Texas. Shortly after their move, Allen applied for and accepted an open position for a part-time investor-relations analyst at ATX Seed Ventures, where she started out managing investor communications. Allen soon realized there was a need for a more hands-on approach to operations. Now, a year into her new position as chief operations officer, Allen is helping the company thrive in her direct oversight of investor relations. She helps investors with tax filings, web-portal management and new-investment communication. She also oversees fund administrators, accounting, legal, compliance, launch of new funds, events and audits for the company.

Although she has a seemingly never-ending daily list of to-do items and responsibilities, Allen says she feels fulfilled by her busy schedule.

“I’ve always liked working, even though there was a choice to stay home with children,” Allen says. “I just feel better at work. It’s where I’m at my best.”

Until 2008, Austin Ventures was the top venture-capital firm in town, with more than $3 billion in assets. Allen says it’s her strong desire to claim this top spot that keeps her motivated day in and day out.

“For 10 years, there’s been a lack of a major venture-capital player in Austin, and I think if we manage ATX Seed Ventures correctly and my partner keeps picking the right investments and I manage the rm well that there’s no reason we can’t step up and be the next Austin Ventures,” Allen says. “That’s what motivates me. I want to take us to the next level.”

Established in 2014, ATX Seed Ventures is an early stage investor that gives startups their first institutional capital. Once an entrepreneur has used up her credit cards and asked family and friends for money, ATX Seed Ventures steps in. The company has $50 million under management, along with 16 companies in its first round of funding. The company is currently six investments in with its second round of funding, with projections to have backed 10 to 15 companies this round.

Allen explains venture-capital firms cannot simply hand entrepreneurs capital. There needs to be a much deeper relationship before any funding can take place. “What [startup]founders need is somebody to help them with strategy development,” Allen says. “They need us to plan and to structure their finance rounds.”

ATX Seed Ventures also serves to make introductions between startups and their potential customers.

“Somebody in our network typically knows who your next big customer is,” Allen says, noting one of the benefits entrepreneurs get from working with a VC firm. “We’re making introductions to their partners and to their future capital sources.”

Allen says key factors ATX Seed Ventures considers when investing include market opportunity and timing, the compelling nature of the product or service, and the caliber of the team. She adds ATX Seed Ventures prefers to invest in serial founders who have an exit strategy and the ability to derisk and amplify success for their involved partners.

At the moment, the company’s portfolio of investments includes one Houston-based business and 20 Austin-based businesses, two of which are female-founded. One of the company’s Austin-based, female-founded investments is luxury-service app Key Concierge. Created by Kim Shrum, the app uses travelers’ preferences to directly connect them to a variety of concierge services. Travelers can use it for any need, from requesting what items they want stocked in their Airbnb to grocery shopping and much more.

The other female-founded startup that ATX Seed Ventures has invested in is Slingshot Aerospace. Founded by Melanie Stricklan, a retired Air Force of care experienced in air-space technology and cyber technology, Slingshot Aerospace converges satellites and machine warnings to create usable data. The technology proved useful during Hurricane Harvey relief efforts to tell first responders where to help victims among floods. The system can also analyze flood analytics to predict damage and crop yields throughout the world, as well as the amount of oil in U.S. tanks and more.

“We will invest if we feel that we can make an impact,” Allen says of ATX Seed Ventures’ assessment methodology. “And if we believe in the team, if we believe in the products and it’s the right time for what they’re doing, then we’ll make an investment.”

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