Part Three of a four-part Urban Nerd series on The Quiet Giant – how Active Capital is pulling off the most unlikely venture story in Texas.

One of the things I love about the Rackspace network is that it never really goes away.

Rackers are scattered across the tech industry. Some have started companies. Some became executives. Some became investors. But wherever you go, eventually you run into someone who once walked the halls of Rackspace.

Every now and then, that network reconnects in ways that produce something remarkable. ProsperOps is one of those stories.

Three former Rackspace veterans, Chris Cochran, Erik Carlin, and Chris Kuehl, came together after leaving the company to build something new. They were not twenty-two-year-old founders chasing a Silicon Valley dream. They were seasoned operators in their thirties and forties, first-time entrepreneurs with deep experience in the cloud infrastructure world.

Pat Matthews knew them all from Rackspace.

“The one I knew the best was Chris Cochran,” he told me. “For much of my time there we were peers.”

Cochran had a reputation inside the company for being relentlessly detail oriented. Pat still laughs about it.

“I used to make fun of him because he would walk around with his laptop open to Excel spreadsheets all day,” Pat said. “But he is a great business leader. Extremely detail oriented. And that turned out to be very relevant to the ProsperOps story.”

The founding team had the kind of balance venture investors dream about. Carlin was the product visionary. Kuehl was the deeply respected engineer. Cochran was the operator who could sell and execute.

“For a three-person team, it was the exact right configuration,” Pat said. “Two technical founders and a great business leader who is in the details.”

Even with decades of experience building businesses inside of Rackspace, the three of them had never started a company before. So they called Pat. The four men met halfway between San Antonio and Austin for dinner at a restaurant in New Braunfels.

They talked about everything related to starting a business.

Should they raise venture capital? How much money did they actually need? What did the earliest stages look like?

“They had a lot of questions,” Pat said.

A few months later, Pat led their pre-seed round. He committed $500,000. The founders raised roughly $800,000 total.

And that was it. The company never raised another venture round.

The ProsperOps Bet

At the earliest stages of venture investing, there are no revenue charts or growth curves to analyze. Those come later. Instead, Pat looks for something else.

“What I’m searching for is founder-market fit,” he said.

Product-market fit happens when demand for a product accelerates so quickly a company struggles to keep up. Founder-market fit comes first. It means the founders are uniquely suited to solve the problem they are pursuing.

In the case of ProsperOps, that conviction came from experience. All three founders had spent years inside the cloud infrastructure world. They had lived the complexity of large-scale cloud environments and understood the inefficiencies better than most.

“If there is anybody with the expertise to solve cloud cost optimization,” Pat said, “it is these guys.”

Modern companies spend enormous amounts of money on cloud computing. Thousands of companies now spend hundreds of thousands, and sometimes millions, of dollars each month running infrastructure on platforms like Amazon Web Services, Microsoft Azure, and Google Cloud.

Managing those environments is incredibly complex. A company might have thousands of servers, services, and instances running at once, all changing as the business grows. Cloud providers offer financial incentives that reduce costs, such as discounts for long-term commitments, but managing those financial instruments manually across thousands of moving parts is almost impossible.

ProsperOps built software that automates the process.

“They were the first company in the world to create a software platform that automatically optimizes those savings,” Pat said.

Earlier solutions produced enormous reports that engineers then had to interpret and implement themselves. ProsperOps simply does it for you. The software operates at the financial optimization layer, not the infrastructure layer itself, which eliminates risk.

“They are not turning off servers,” Pat said. “They are optimizing the financial constructs around them.”

The result is simple. Companies save money. A lot of it.

The Chess Moves

Two years after launching, ProsperOps was doing about $2 million in annual revenue when a strategic acquirer offered to buy the company for $20 million.

For founders who had raised only $800,000, it was a real decision. As Pat put it, it would have been a pretty good outcome for two years of work. But he believed the company was just getting started.

“I told them, I really do not think you should sell the company.”

Instead, he proposed a different idea. If the founders could take some personal money off the table, they might feel comfortable continuing to build. So Pat went to work structuring a deal that allowed a subset of the founders to take some liquidity while keeping the company independent.

“That de-risked things for them,” Pat said. “They could keep building.”

It also dramatically increased Active Capital’s ownership.

“We essentially 10x’d our investment.”

Over the next eighteen months, ProsperOps continued to grow. Revenue climbed from $2 million to $12 million annually. Another acquisition offer arrived. This time the number was over $100 million.

Once again, the company chose to keep building.

Instead of selling, the team repeated the earlier strategy on a much larger scale. Private investment firms H.I.G. Growth and Snowhawk purchased a large stake in the company for $72 million. This allowed founders, employees, and early angel investors to take additional liquidity.

The company itself still had not raised operational venture capital. ProsperOps continued operating with the same disciplined structure it had from the beginning.

Over the next three years, ProsperOps grew from $12 million to roughly $75 million in annual recurring revenue.

“It is one of the best run companies I have ever been part of,” Pat said.

He compared it to the early days of Rackspace.

“Rackspace was chaos and fires every day, but that environment provided a lot of learnings,” he said. “These guys were incredibly buttoned up.”

By 2025, the company had become the clear leader in its category. Eventually, the market came calling again. ProsperOps was acquired by Flexera, a large enterprise software company backed by the private equity firm Thoma Bravo.

The exact terms were not disclosed, but Pat believes the outcome ranks among the largest venture-backed software exits connected to Austin. It also carries unmistakable San Antonio fingerprints.

Why It Matters to San Antonio

“All three founders are products of Rackspace,” Pat said.

One founder lives in San Antonio. Pat himself was the venture capitalist backing the company. And roughly 80 percent of the capital behind Active Capital came from San Antonio investors.

“This thing has San Antonio fingerprints all over it,” he said.

For Pat, the ProsperOps story is a lesson in discipline. The team raised a small amount of money, stayed lean, wrote the code themselves, sold the first customers themselves, and resisted the temptation to scale before demand became undeniable.

That discipline gave them something many venture-backed companies never achieve.

Optionality.

“They had choices,” Pat said. “They could raise venture capital. They could sell. Or they could keep building.”

ProsperOps chose to keep building long enough to become something much larger than the company that first sat down with Pat in New Braunfels.

And for San Antonio, that may be the bigger story.

ProsperOps is not a simple hometown startup tale. It is part San Antonio, part Austin, part remote, and deeply rooted in the Rackspace network. But maybe that is exactly why it matters.

In the final part of this series, I want to ask what this kind of story says about San Antonio’s next chapter, and whether enough stories like this can eventually produce the company that grows here, stays here, and helps define the next version of our tech ecosystem.