Guest column

Lawyers specializing in startups are hard to comeby in Houston — but here's what you need to know

You need a specialized lawyer for your startup — but that's easier said than done in Houston, according to this expert. Getty Images

One of the worst, and most expensive, mistakes that we see startup founders make in the very early days of their company is not realizing that hiring lawyers is a lot like hiring doctors: when the stakes are high, you need a highly experienced specialist.

Law has numerous specialties and sub-specialties, and hiring legal counsel with the wrong specialty can mean paying to reinvent the wheel, or simply getting advice that is out of sync with the norms of your industry and the expectations of your seasoned investors.

This challenge can be particularly acute for founders of startups located in Houston. The legal market in any particular city tends to mirror the dominant industries of that city. Houston has some of the world's most prominent energy and healthcare lawyers, for reasons that should be obvious to anyone who knows anything about Houston's economy.

Startup lawyers, or more formally —corporate/securities lawyers who are sub-specialized in "emerging companies" — are a different story entirely. Given the nascent status of Houston's startup ecosystem, finding local lawyers who work with emerging technology companies and early-stage funding day in and day out, and know all the norms and nuances, is a challenge.

Very often we see founders get referred to a local lawyer who is a broad generalist that dabbles lightly in many practice areas. Their lack of depth in startup or venture capital work usually leads to clients paying for things that a more specialized lawyer, with a deeper set of precedent forms and institutional knowledge, could simply pull off the shelf. In other cases, founders get referred to very expensive senior corporate lawyers from firms designed for billion-dollar public company representation; totally overkill (and overpriced) for an early-stage startup.

What the smartest Houston founders discover, if they do their homework, is that leveraging the broader "Texas ecosystem" can help not just with sourcing talent for their employee roster or finding venture capital, but with sourcing specialized legal talent as well. In the case of Startup Lawyers, Austin's venture capital and startup ecosystem has produced numerous highly specialized lawyers whose depth of startup/vc experience easily compares with lawyers found in Silicon Valley, but who also regularly interact with investors in the Houston market; and therefore know their expectations. In the case of our firm, Egan Nelson (E/N), a significant number of our clients are located in Houston, Dallas, San Antonio, and other markets in the general regional area.

Historically, businesspeople have assumed that if they really want top-tier, highly specialized counsel, they had to find that counsel at large, multi-national law firms. That is no longer the case. The broader Texas ecosystem has produced a thriving group of specialized, high-end "boutique" law firms that are recruiting top-tier lawyers away from the traditional mega-firms, and leveraging technology to deliver "leaner" legal counsel; saving hundreds of dollars per hour for entrepreneurs.

It is not uncommon for us to see Houston startups utilizing an emerging companies corporate lawyer in Austin, a regulatory specialist lawyer in Houston, and a tax lawyer in Dallas; all from different firms. This is the future for how emerging companies will source their legal talent, without the constraints of geography or old-fashioned "all in one" law firm structures.

This trend really isn't that new. VCs from Austin and other Texas cities (and the coasts) have regularly been visiting Houston to fund companies, and Houston companies have regularly leveraged contacts in other markets to source specialized resources for their companies. The same dynamics have extended to finding legal counsel. "Localism," and an over-preoccupation with hiring everyone in the same city, isn't really just last year, it's more like last century. There is nothing about legal services for startups that requires any of your lawyers to be within your same city. Videoconferencing works great.

The growth of the Texas ecosystem, and the emergence of specialized boutique law firms, mean that Houston entrepreneurs have far more options to choose from for sourcing specialized legal counsel. Leverage those options to avoid engaging lawyers who are insufficiently experienced, or overkill, for the needs of your company. For more resources on finding and assessing the right lawyers for your Houston startup, see Startup Lawyers, Explained.

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Jose Ancer is an Emerging Companies Partner at Egan Nelson LLP. He also writes for Silicon Hills Lawyer, an internationally recognized startup/vc law blog focused on entrepreneurs located outside of Silicon Valley, including Texas.

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From software and IoT to decarbonization and nanotech, here's what 10 energy tech startups you should look out for. Photo via Getty Images

This week, energy startups pitched virtually for venture capitalists — as well as over 1,000 attendees — as a part of Rice Alliance for Technology and Entrepreneurship's 18th annual Energy and Clean Tech Venture Forum.

At the close of the three-day event, Rice Alliance announced its 10 most-promising energy tech companies. Here's which companies stood out from the rest.

W7energy

Based in Delaware, W7energy has created a zero-emission fuel cell electric vehicle technology supported by PiperION polymers. The startup's founders aim to provide a more reliable green energy that is 33 percent cheaper to make.

"With ion exchange polymer, we can achieve high ionic conductivity while maintaining mechanical strength," the company's website reads. "Because of the platform nature of the chemistry, the chemical and physical properties of the polymer membranes can be tuned to the desired application."

Modumetal

Modumetal, which has its HQ in Washington and an office locally as well, is a nanotechnology company focused on improving industrial materials. The company was founded in 2006 by Christina Lomasney and John Whitaker and developed a patented electrochemical process to produce nanolaminated metal alloys, according to Modumetal's website.

Tri-D Dynamics

San Francisco-based Tri-D Dynamics has developed a suite of smart metal products. The company's Bytepipe product claims to be the world's first smart casing that can collect key information — such as leak detection, temperatures, and diagnostic indicators — from underground and deliver it to workers.

SeekOps

A drone company based in Austin, SeekOps can quickly retrieve and deliver emissions data for its clients with its advance sensor technology. The company, founded in 2017, uses its drone and sensor pairing can help reduce emissions at a low cost.

Akselos

Switzerland-based Akselos has been using digital twin technology since its founding in 2012 to help energy companies analyze their optimization within their infrastructure.

Osperity

Osperity, based in Houston's Galleria area, is a software company that uses artificial intelligence to analyze and monitor industrial operations to translate the observations into strategic intelligence. The technology allows for cost-effective remote monitoring for its clients.

DroneDeploy

DroneDeploy — based in San Francisco and founded in 2013 — has raised over $92 million (according to Crunchbase) for its cloud-based drone mapping and analytics platform. According to the website, DroneDeploy has over 5,000 clients worldwide across oil and gas, construction, and other industries.

HEBI Robotics

Pittsburgh-based HEBI Robotics gives its clients the tools to build custom robotics. Founded 2014, HEBI has clients — such as NASA, Siemens, Ericsson — across industries.

CarbonFree Chemicals

CarbonFree Chemicals, based in San Antonio and founded in 2016, has created a technology to turn carbon emissions to useable solid carbonates.

SensorUp

Canadian Internet of Things company, SensorUp Inc. is a location intelligence platform founded in 2011. The technology specializes in real-time analysis of industrial operations.

"Whether you are working with legacy systems or new sensors, we provide an innovative platform that brings your IoT together for automated operations and processes," the company's website reads.

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