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Here’s how big companies are looking to invest in Houston startups

For large companies, it's not just about the money. There's more they can offer startups. Getty Images

As times and technologies change, large companies need to be able to adopt innovative techniques now more than ever. For some companies, that means making a strategic hire, investing in startups, or making acquisitions.

Three panelists with experience in corporate ventures took the stage at the inaugural HX Capital Summit to discuss their best advice for startups looking for investment from large companies.

The panel consisted of Roy Johnston, partner at The League of Worthwhile Ventures; Tom Luby, head of Jlabs; Andrea Course, venture principal at Schlumberger Technical Investments; and moderator Rashad Kurbanov, CEO of Houston-based iownit capital and markets.

The topic of conversation was how corporations work with startups. For Schlumberger, Course says, it's less about acquiring companies and more about investing in technologies those startups are working on.

"When Schlumberger does invest, we like to have a pilot and invest in properties we can grow," Course says. "Our intent is not to go out and buy a startup company, but to grow the technology and then become customers."

Schlumberger has a lot to offer a budding company, namely resources, infrastructure, assets, and a global footprint, Course says.

Previous to his position at The League, Johnston was the director in the venture capital arm of Waste Management, Inc. He says he saw a similar resources-based investment strategy.

"Waste Management might have been more hesitant to write a check, but they were very generous with their assets," Johnston says.

The company could make connections for the startups and provide other support for entrepreneurs in the early stages of starting a company. However, when it came to monetary investments, Johnston says, it was a different story.

"Where I think Waste Management comes in is later on — more of an acquirer than an investor," Johnston says.

When it comes to the types of startups big companies are looking to work with, industry isn't a big issue. Johnson & Johnson, for instance, has an open mind, Luby says.

"It's not an easy fit to say a specific area where J&J fits — if you look at the profile of things we do, we have a no-strings-attached incubation hub next door," he says.

Schlumberger similarly looks outward to spark innovation inward — mostly, Course says, because it's so challenging to think outside the box when you're working everyday inside the box.

"We mostly invest in companies outside of oil and gas, but that we see the potential of bringing used in our industry," Course says.

Houston, has a surplus of diversity — both industry and population, Johnston says. This will be a huge asset of the city, he says, since Houston is on the edge of another revolution for digitization.

"The businesses that are going to be built are going to need people who have a diverse understanding of problems," Johnston says. "That's where I think Houston's diversity is an enormous benefit to us."

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Auburn University's SwiftSku took first place in this year's virtually held Rice Business Plan Competition, but it was the second place company that went home with over half a million in cash and investment prizes. Photo via rice.edu

In its 21st year, the Rice Business Plan Competition hosted 54 student-founded startups from all over the world — its largest batch of companies to date — and doled out over $1.4 million in cash and investment prizes at the week-long virtual competition.

RBPC, which is put on by the Rice Alliance for Technology and Entrepreneurship, took place Tuesday, April 6, to Friday, April 9 this year. Just like 2020, RBPC was virtually held. The competition announced the 54 participating startups last month, and coordinated the annual elevator pitches, a semi-finals round, wildcard round and live final pitches. The contestants also received virtual networking and mentoring.

Earlier this week, Rice Alliance announced the seven student-led startups that then competed in the finals. From this pack, the judges awarded the top prizes. Here's how the finalists placed and what won:

  • SwiftSku from Auburn University, point of sales technology for convenience stores that allows for real time analytics, won first place and claimed the $350,000 grand prize from Goose Capital. The company also won the $50,000 Business Angel Minority Association Prize, the $500 Best Digital Elevator Pitch Prize from Mercury Fund, and the $500 Third Place Anbarci Family People's Choice prize, bringing the company's grand total in cash and investment prizes to $401,000. The company also won the CFO Consulting Prize, a $25,000 in-kind award.
  • AgZen from the Massachusetts Institute of Technology, a pesticide alternative spray and formulation technology company, won the second place $100,000 investment prize (awarded by Finger Interests, Anderson Family Fund, Greg Novak, and Tracy Druce). The startup also won a $300,000 Owl Investment Prize, the $100,000 Houston Angel Network Prize, the $500 Best Energy Elevator Pitch Prize from Mercury Fund, and the $1,500 Third Place Anbarci Family People's Choice prize, bringing the company's grand total in cash and investment prizes to $502,000. The company also won the $30,000 in-kind Polsinelli Energy Prize.
  • FibreCoat GmbH from RWTH Aachen University, a startup with patented spinning technology for the production of inexpensive high-performance composite fibers, won the third place $50,000 investment prize (also awarded by Finger Interests, Anderson Family Fund, Greg Novak, and Tracy Druce). The company also won the $100,000 TiE Houston Angels Prize and the $500 Best Hard Tech Elevator Pitch Prize from Mercury Fund, bringing the company's grand total in cash and investment prizes to $150,500.
  • Candelytics from Harvard University, a startup building the digital infrastructure for 3-D data, won the fourth place $5,000 prize.
  • OYA FEMTECH Apparel from UCLA, an athletic wear company that designs feminine health-focused clothing, won the fifth place $5,000 prize. The company also won the $5,000 Eagle Investors Prize, the $25,000 Urban Capital Network Prize, and the $1,000 Second Place Anbarci Family People's Choice prize, bringing the company's grand total in cash and investment prizes to $36,000.
  • LFAnt Medical from McGill University , an innovative and tech-backed STI testing company, won the sixth place $5,000 prize and the $20,000 Johnson and Johnson Innovation Prize, bringing the company's grand total in cash and investment prizes to $25,000.
  • SimpL from the University of Pittsburgh, an AI-backed fitness software company, won the seventh place $5,000 prize. The company also won the $25,000 Spirit of Entrepreneurship Prize from the Pearland Economic Development Corp., bringing the company's grand total in cash and investment prizes to $30,000.

Some of the competition's participating startups outside of the seven finalists won monetary and in-kind prizes. Here's a list of those.

  • Mercury Fund's Elevator Pitch Prizes also included:
    • Best Life Science $500 Prize to Blue Comet Medical Solutions from Northwestern University
    • Best Consumer $500 Prize to EasyFlo from the University of New Mexico
    • Best Overall $1,000 prize to Anthro Energy from Stanford University
  • The Palo Alto Software Outstanding LivePlan Pitch $3,000 Prize went to LiRA Inc. from the University of North Carolina at Chapel Hill
  • The OFW Law FDA Regulatory Strategy Prize, a $20,000 in-kind award went to Paldara Inc. from Oklahoma State University.
  • The Silver Fox Mentoring Prize, which included $20,000 in kind prizes to three winners selected Ai-Ris from Texas A&M University, BruxAway from the University of Texas, and Karkinex from Rice University as recipients.
  • The first, second, and third place winners also each received the legal service prize from Baker Botts for a total of $20,000 in-kind award.
  • The Courageous Women Entrepreneurship Prize from nCourage — a $50,000 investment prize — went to Shelly Xu Design from Harvard University.
  • The SWPDC Pediatric Device Prize — usually a $50,000 investment divided its prize to two winners to receive $25,000 each
    • Blue Comet Medical Solutions from Northwestern University
    • Neurava from Purdue University
  • TMC Innovation Healthcare Prize awarded a $100,000 investment prize and admission into its accelerator to ArchGuard from Duke University
  • The Artemis Fund awarded its $100,000 investment prize to Kit Switch from Stanford University
The awards program concluded with a plan to host the 22nd annual awards in 2022 in person.

If you missed the virtual programming, each event was hosted live on YouTube and the videos are now available on the Rice Alliance's page.

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