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TMC Venture Fund director shares how the organization is growing its global presence

Juliana Garaizar has worked around the world. Now she's taking her international expertise and using it for global initiatives within the Texas Medical Center. Courtesy of TMC

In November, when the Texas Medical Center launched its venture fund closely tied to its accelerator program, they were betting on the ecosystem — and the organization itself.

TMCx was seeing a lot of achievement from its cohorts, TMC Venture Fund Director Juliana Garaizar says, and it was time to expand on the impact they were making in life science innovation.

"While we thought we had so many success stories, we felt like we weren't really taking advantage of them," she says. "So, we bet on the ecosystem and started the fund. It was the next logical step into the creation of value after the program."

The $25 million nonprofit fund is all TMC money, and the fund plans to invest around $2 million a year. All the investments made are to companies that have a tie to TMC — through the accelerator program or a shared workspace, for instance. Funding grants range between $250,000 to $500,000, and can go up to $1 million in a deal, Garaizar says. Ten companies have received investments, with five more soon to be announced.

"I see us like a corporate venture fund that invests not only in companies that have a good ROI but also that can bring value to the TMC as a whole," Garaizar says.

Garaizar knows quite a bit about investing. Born in Spain near the French border, she's worked in finance around the world from Singapore to London before settling in Houston. Prior to TMC, was the managing director at the Houston Angel Network. Now, she's using her international investment know how to help grow TMC's global presence.

InnovationMap: How has your international background helped you here in Houston?

Juliana Garaizar: I think TMC wants to be positioned as a strong competitor to the East and West Coasts as a point of entry for companies coming to the United States, but also for technology and commercializations from hospitals. The fact that I'm already very connected to other countries — not only from the funding side but also from the research side, is really helpful.

IM: You are also connected with international consular representatives — how is that an asset to TMC?

JG: Houston has the third-most number of consular representatives in the U.S., which makes it easier for the TMC to connect with other countries because a lot of the consulate entities are here. And that's a big reasons the biobridges initiatives was created. We were receiving a lot of interest from these entities.

IM: Tell me about your involvement with TMC's Biobridge program.

JG: It's an international partnership between the TMC and different countries. They've already started with the UK and with Australia. The collaboration focuses on joint research and there's the commercialization part and the funding part — I'm mainly taking care of the funding part. We want to try to not only have the joint research and commercialization, but that those efforts get funded — not only from our side but also from the other country's side. We really believe that the biobridges can be a perfect source for deal flow for our funds. As you can see in your interview with Lance [Black], we have more and more international companies in our TMCx cohort. We believe we are positioned in the perfect way to become the point of entry of many excellent life sciences companies all over the world.

IM: How does Houston's VC ecosystem compare to some of the places you've worked in?

JG: London was very accepting of differences and open to any kind of innovation coming from all over the world. It's very easy for them to invest in deals coming from early stage and other countries. That's a little different from the U.S. One of the differences I saw coming from the early stage investment in Europe, we are pretty used to cross-border investing because our countries are pretty small. If we only had deals coming from our countries, we wouldn't get very far. So, we were very used to dealing with different tax rules, contracts, and navigating all that. One of the things you hear from U.S. investors is that they want the company they want to invest in to have a presence here. That's just not the case in Europe.

Another one of the things I also noticed was there is less money as a whole in Europe. As an entrepreneur, you really needed to learn to work together. The European Union and the French government, for instance, would only give funding if you had put a project together with partners from different countries, has private-public partnerships, and an educational institute — otherwise you wouldn't get the money from the government. That's not required here in the U.S. because there's more capital here. I can feel sometimes we are not as forced to collaborate here, and in some ways I see a lot of initiatives that are kind of reinventing the wheel. Sometimes I think if we put more resources and if we were more aware of what was going on in the ecosystem, we could get more synergy and collaboration together.

IM: How is TMC's fund different from others in Houston?

JG: From the acceleration side of things, TMCx is different from most in that we don't take any equity. A lot of companies that are not in a typical accelerator stage and have raised a couple rounds of funding even decide to come to TMCx because of this reason and because there's a lot of opportunities from the program including connections. That's our competitive advantage, to have these companies that are more advanced.

IM: What are some of your goals for the fund?

JG: Short term, I've been focusing on securing a lot of deal flow sources. I wanted to make sure I could bring my network in.

In the long term, we would like to raise a bigger fun, around $100 million fund. We would need to make sure we have our deal flow ready for that, and a big part of that would be international deal flow.

Maybe, we've discussed this, but in the shorter term, before raising that $100 million fund we might take some of the offers that some people have put on the table to create a sidecar fund. It would be another structure that would follow our fund, as a sort of index or passive instrument that people can use to invest alongside us.

IM: How does the industry get more women into venture capital roles?

JG: We need to take matters into our own hands as women. Often, people say there's not enough women in venture funding because there's a pipeline problem, which comes from education in STEM. I think that's an excuse. A lot of VCs hire their friends and people they know. I really believe that women need to harness their financial power and start investing in things they consider important to them. I became a lot more vocal in what I wanted to see and I started investing myself. At the end of the day, women make 80 percent of the purchasing decisions, so we might as well be deciding what's in the market if we're the ones buying it.

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Portions of this interview have been edited.

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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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