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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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Building Houston

 
 

Capital Factory's Houston HQ will be in The Ion. Photo courtesy of The Ion

A company that supports entrepreneurship and startups across the Lone Star State with mentorship and funding has announced its new homebase in Houston.

Capital Factory has revealed a new programming partnership with The Ion. Through the collaboration, Capital Factory will host programming, events, and resources within the innovation hub to grow, educate, and support Houston-based startups and entrepreneurs.

"Capital Factory's presence at The Ion will further expand the opportunities for startups and innovators in the Houston region, while strengthening an important pillar of the Texas Startup Manifesto," says Joshua Baer, founder and CEO of Capital Factory, in a news release.

Capital Factory was founded in Austin in 2009 and boosts on being the most active investor in Texas, deploying smaller investments to a multitude of early-stage startups. According to Crunchbase's data, the entity has invested in over 160 companies with 20 exits. Capital Factory officially entered the Houston market in 2019 and doubled down its presence last year when it merged with Station Houston.

Now, with its Houston headquarters moving into The Ion, the two innovation partners will take an inclusive approach to creating connections between innovators, mentors, investors, and markets, per the release.

"We are thrilled to have Capital Factory as a programming partner at The Ion" says Jan E. Odegard, executive director of The Ion, in the release. "The Ion seeks to work with key partners and established brands to help build a rich and inclusive set of startup services that can support all innovators and startups wherever they are in their entrepreneurial journey. Capital Factory brings a proven track record for providing entrepreneurs with services and investments that brings great value not only to The Ion ecosystem, but also to the entire Houston innovation ecosystem."

Capital Factory's first event at The Ion will be Open Coffee on November 16th followed by Open Coworking all day, Baer adds in his statement.

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