Three new venture capital funds are making the Dallas scene, making hundreds of millions of dollars available to local startups and young companies and helping to reverse the local funding drought.

Two of the firms involve local industry veterans, and one is a newcomer.

Dallas Venture Partners has opened its doors to invest in seed and early stage technology companies in Texas and the Midwest. It's run by local venture capitalist Matt Himelfarb.

Remeditex Ventures recently formed to invest in seed and early stage life sciences and biotechnology deals - mainly research at Texas universities and institutions that need funding. The firm includes some heavy hitters, such as Dennis Stone, former head of technology development at UT Southwestern Medical Center in Dallas.

Sun Mountain Capital, a private equity and venture capital firm based in Santa Fe, N.M., recently opened a Dallas office. The firm declined to comment.

The new firms come as venture investments in North Texas lag the rebound that's occurring in other parts of the state and the nation.

Venture dollars in North Texas reached their lowest level in 17 years in the second quarter: $17.6 million. For the first half of this year, venture capitalists invested $82.7 million in 16 companies, down 33 percent from a year earlier, according to Thomson Reuters.

"Given the recent quarter, it's great to have any positive movement at all," said Cindi Keith, a partner in PricewaterhouseCoopers' technology practice in Dallas. "Someone coming in is a good sign. We're going to watch to see where the money goes."

Many Dallas venture firms have made no new investments for a while, leaving entrepreneurs to bootleg their ventures.

"Dallas is a challenging market for fundraising," said MeLinda McCall, chief business director of Plano startup Proxomo Software. The company launched a product in May to integrate backend services to make it easier to create apps and social sites.

"Tremendous innovation is occurring right here, not just in Silicon Valley or on the East Coast," McCall said. "The expansion of funding sources locally is certainly a huge boon to the startup community."

Dallas Venture Partners' Himelfarb has been surprised at the volume of deal flow. He hopes to close the first deal by the end of the year.

"It goes to show how starved this region is for venture firms," Himelfarb said. "I did not anticipate getting the volume and quality I've been getting so far. There's a lot going on in Dallas."

The firm will make seed-stage investments of up $750,000 and early stage investments of $1 million to $3 million, he said. It's looking at companies in software, clean technology, networking, mobile apps, gaming technology and Web-enabled services.

Dallas' Duda family and the Coppola family in Iowa are funding Dallas Venture Partners, Himelfarb said. Iowa entrepreneur Michael Coppola is his co-founder.

Himelfarb, 31, worked as a senior associate at Trailblazer Capital for four years, but the opportunity to run his own venture firm was too good to pass up. The Dallas native has a law degree and an MBA from Southern Methodist University. While at SMU, he started a digital music company in 2005 that sold shares in an artist for access to albums.

Lyda Hill, scion of Dallas oil tycoon H.L. Hunt, has committed $150 million to Remeditex, officials said.

Remeditex wants to develop a more robust health care and biotechnology community in Texas that will help turn ideas into companies and retain those companies.

"Texas ranks third or fourth for medical research, but 25th in company formation," said Stone, chief scientific officer. "We want to change that."

In addition to Stone, Remeditex leadership includes John Creecy, former CEO of Hunt Petroleum Corp., and Brett Ringle, a lawyer and former Hunt Petroleum executive.

In July, Remeditex made its first investment - $7 million in Peloton Therapeutics Inc., a Dallas-based cancer drug development company based on UT Southwestern research.

"I would venture to say that funds follow opportunity, so I would regard this as a nod to the increasing strength of D-FW life sciences and med tech startups in particular and the startup community in D-FW in general" said Hubert Zajicek, senior director of NTEC Inc., a Frisco business incubator for medical and clean technology.

Remeditex and Dallas Ventures Partners think they have an investment advantage because they don't have a committed fund raised from limited partners. Instead, they will make investments on a deal-by-deal basis.

"[Hill] has a very high risk tolerance and understands that this is a space that requires a lot of time and background research," Ringle said.

Without a fund, "we're not limited and not under the same pressure for fast exits to raise the next fund," Himelfarb said. "I think that really resonates with entrepreneurs."

Orix seeing a lot of

entrepreneur interest

The Orix Texas Technology and Infrastructure Fund, which launched in May, reports seeing strong interest from entrepreneurs.

Dallas-based financial company Orix USA Corp. has committed $200 million to the fund to invest in technology and life sciences and government public projects. The fund has received more than 100 inquiries and plans to make its first technology investment by the end of the year, said Ed Smith, chairman of the fund

"I was surprised at the volume we've seen," Smith said. "I'm seeing companies that have exhausted their angel funding and are looking at first or second round of venture capital funding."

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