Follow the money
Houston startup consulting firm launches $20 million venture capital fund for early stage software companies
A new venture capital fund has launched in Houston to serve seed-stage, software-as-a-service companies. The $20 million fund plans to make its first investment by the end of the third quarter of this year.
The fund is launching under Golden Section Technology, a Houston-based software consulting firm focused on demystifying technology and providing training and counseling for entrepreneurs. Managing director, Dougal Cameron, says he and a small group of investors made investments in some of the companies that GST has worked with over the years.
"Along the way, we've had the opportunity to invest in some businesses that were our clients," Cameron tells InnovationMap. "A couple years later, we realized that we've invested $8 million — the majority being in Houston-based startups."
Most of these investments saw successful exits, Cameron says, and now, with interest from other investors, Cameron wants to expand the company's reach and contribution with the GSTVC fund.
The GSTVC fund will invest in $500,000 to $750,000 increments and will have a strong presence in each of the portfolio companies.
"Where most capital wants to be hands off, we are going to be incredibly hands on and view that as an augmentation to the management team," Cameron says.
The hands-on approach isn't surprising, considering GST's specialty since its founding in 2011 has been helping scale its client companies. During the early stages of company growth, GST helps its clients make the right growth-centered decisions, and as the company scales up, the firm continues to provide C-level support and trained development teams.
Combining the $20 million of capital with GST's years of entrepreneurial and upscale expertise makes for a fund unlike anything else available in Houston.
"We have done things a bit differently than the traditional investment fund as we supply far more than just working capital," says Isaac Shi, managing partner at GSTVC, in a release. "We have the full strength of our software development company, Golden Section Technology, as well as deep experience in early stage B2B Sales and Marketing. The combination of our experience, capital and hands on approach has the potential to substantially decrease the risk for our investment companies and increase the return for our investors."
One of the GST clients that has already received an investment is QMSC LLC, a Houston-based, B2B SaaS company that enables cloud technology and analytics to help businesses lower operating costs. QMSC has already seen the benefit of GST's funding and consulting working together.
"The world doesn't need one more B2B investment fund like all the others, but there is surely room for one which reduces the risk of execution and accelerates product development in the manner that GSTVC can," says Marshall Williams, founder of QMSC, LLC, in a news release. "They are doing something very different."