HOUSTON INNOVATORS PODCAST EPISODE 69

Houston expert: 2020 was 'hugely disruptive — but hugely beneficial' for the energy transition

Deanna Zhang of Tudor, Pickering, Holt & Co. joined the Houston Innovators Podcast to discuss 2020's effect on the energy transition — and what that meant for startups. Photo courtesy of TPH

In 2020, the economy was hit with a double whammy of sorts — from a devastating pandemic to an unprecedented drop in oil prices — and that has meant that the energy transition is happening at a faster pace than ever.

Deeana Zhang, director of energy technology at Tudor, Pickering, Holt & Co., joined the Houston Innovators Podcast this week to discuss what she observed throughout the year as she worked closely with energy tech businesses.

"Because it was such a disruptive year, everyone — from the commercial and business side to the consumer side — has rethought how they are using and thinking about energy," she says on the show. "It was the first time that you saw such a mass disruption of energy demand, and that rolls through the entire ecosystem."

The effect touched all four corners of the industry in some way, and it forced all major energy players to be more intentional with their business strategy — especially when it comes to the role they play within the energy transition.

"The energy transition saw a huge uptick in 2020 — and there's a lot of implications of that from what pilots are getting commercialized and what companies are getting more funding," says Zhang. "All around it was hugely disruptive — but hugely beneficial I think to the energy transition."

Environmental, social and corporate governance, which has been growing in importance to investors and company leadership for several years now, also got a spur from 2020. ESG has been propelled by activism and consumer choice, Zhang says, but now investors are now forced to be more cognizant than ever.

"What's the investor responsibility to society as a whole? It's going beyond economics — what's your social and environmental responsibility? I think a lot of that expansion of responsibility is what's driving ESG," she says. "That's going to trickle down corporations and companies as they think about what is their expanded responsibility."

Zhang, who works closely with energy startups, also observed a profound effect when it came to capital and new business.

"A lot of companies say numbers go down in 2020, but the exceptions to that were companies that had a strong energy transition angle. Those companies were able to reposition themselves to ... counteract what was going on in the market in general," Zhang says. "From a capital raising standpoint, it was also really challenging. A lot of funds put a hold on investing in new companies and even some to their existing portfolio."

Investment came back toward the second half of the year, but there was a new level of caution, she says, and this is something startups saw happening across the country.

Zhang discusses more about what she saw happen last year for energy technology — as well as what that means for 2021 — on the episode. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.

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Building Houston

 
 

Kelly Avant, investment associate at Houston-based Mercury Fund, shares how and why she made her way into the venture capital arena. Photo courtesy of Mercury

Kelly Avant didn't exactly pave a linear career path for herself. After majoring in gender studies, volunteering in the Peace Corps, and even attending law school — she identified a way to make a bigger impact: venture capital.

"VC is an awesome way to shape the future in a more positive way because you literally get to wire money to the most innovative thinkers, who are building solutions to the world’s problems," Avant tells InnovationMap.

Avant joined the Mercury Fund team last year as an MBA associate before joining full time as investment associate. Now, after completing her MBA from Rice University this month, Avant tells InnovationMap why she's excited about this new career in investment in a Q&A.

InnovationMap: From law school and the peace corps, what drew you to start a career in the VC world?

Kelly Avant: I graduated from Rice University with an MBA, starting scouting for an investment firm in my first year, and by the summer after my first year I was essentially working full-time interning with Mercury. But, I like to tell people about my undergraduate degree in gender studies and rhetoric from a little ski college in Colorado. If you meet someone else in venture capital with a degree in gender studies, please connect us, but I think I might be the only one. I’ll spare you what I used to think — and say — about business students, but I have really come full circle.

I always thought I would work in a nonprofit space, but after serving in Cambodia with the Peace Corps, working for the National Domestic Violence Hotline, and briefly attending Emory Law School with the intention of becoming a civil rights lawyer.I found that time and time again the root of the problem was a lack of resources. The world’s problems were not going to be solved with my idealism alone.

The problem with operating as a nonprofit in a capitalism is you basically always pandering to the interests of the donors. The NFL was a key sponsor of The National Domestic Violence Hotline. The United States has a complicated, to put it lightly, relationship with Cambodia and Vietnam. It became pretty clear that the donor/nonprofit relationship was oftentimes putting the wrong party in the driver’s seat. I was, and still am, very interested in alternative financing for nonprofits. I became convinced that the most exciting businesses were building solutions to the world’s problems while also turning a profit, which allows them to survive to have a sustainable positive impact.

VC is an awesome way to shape the future in a more positive way because you literally get to wire money to the most innovative thinkers, who are building solutions to the world’s problems.

IM: What are some companies you’re excited about?

KA: There are a couple super interesting founders I’ve met directly engaging with . To name a few: CiviTech, DonateStock, and Polco.

I’m very proud to work on mercury investments like Houston’s own, Topl, which has built an extremely lightweight and energy efficient Blockchain that enables tracking of ethical supply chains from the initial interaction.
I’m also excited about mercury’s investment in Zirtue, which enables relationship based peer to peer lending to solve the massive problem of predatory payday loans.

We have so many awesome founders in our portfolio. The best part about working in VC is meeting passionate innovators every day. I get excited to go to work everyday and help them to build better solutions.

IM: Why are you so passionate about bringing diversity and inclusion into Mercury?

KA: I love working with exciting, highly capable, super smart people. That category includes so many people who have been historically excluded. As an investment team member at Mercury, I do have a voice, and I have an obligation to use that voice to speak highly of the best people in rooms of influence.

IM: With your new role, what are you most focused on?

KA: In my new role, I am identifying and researching high potential investments. We’re building out a Mercury educational series to lift the veil of VC. We want to facilitate a series that gives all founders the basic skills to pass VC due diligence and have the opportunity to build the next innovative companies. My goal is ultimately to produce the best returns possible for our investors, and we can’t accomplish that goal unless we’re building out resources to meet the best founders and help them grow.

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This conversation has been edited for brevity and clarity.

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