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Overheard: International startup accelerator shares advice for Houston companies navigating COVID-19 era

Plug and Play, an international accelerator and investment group with a presence in Houston, joined a panel to discuss startup investment, networking, and more during the pandemic. Photo by Zview/Getty Images

It's no secret that the spread of COVID-19 has greatly affected startup ecosystems by shutting down coworking and accelerator spaces and providing economic uncertainty in the venture capital world. However, organizations focused on investment and acceleration are still working to virtually guide startups virtually.

Plug and Play Tech Center, an accelerator and investment group based in Silicon Valley that recently launched its Houston presence, is still offering support and even investments to startups as the pandemic continues on. One way they've recently done so is through Houston Exponential on a virtual panel to answer questions from Houston entrepreneurs.

On the panel, Neda Amidi, partner and global head of health at Plug and Play Tech Center, Milad Malek, associate at Plug and Play Ventures, and Payal Patel, director at Plug and Play Houston, discussed concerns and questions about the organization's dedication to Houston, advice amid the pandemic, and more. If you missed it or don't have time to stream the whole conversation, here are some impactful moments of the chat.

“Timing and opportunity set up the Plug and Play Houston office. The mayor and other business leaders in Houston had seen what happens in our Silicon Valley office and with all the things that are going on in the burgeoning startup community in Houston, we saw the opportunity.”

— Patel says on how Houston snagged its very own Plug and Play location. "Given the high concentration of large companies here — as well as the growing number of investment opportunities — we moved quite quickly to open the office here," she adds.

“There’s a number of great entrepreneurs here in this city. I think a missing ingredient has been the number of early stage investments — especially in that Seed or series A stage. So, we hope to make an impact in that. Our CEO has publicly stated that he’d like to make five investments in Houston a year.”

— Patel shares about Plug and Play's investment strategy in Houston. She adds that five investments in Houston a year is the bare minimum, and they actually are striving for more.

“[Investing virtually is] kind of the same process, but we definitely try to make sure we have cameras on and distractions are away, really giving that entrepreneur that same experience as we can in a face-to-face meeting."

— Amidi says on how Plug and Play's investment team approaches investment meetings and pitches during this time. She explains that during the beginning of the pandemic, most of their investments were with companies that had existing relationships with or follow on deals. Now they have made investments in companies they've never met in person. She says Plug and Play has relied on its network to give feedback on these potential deals.

“During COVID, we’ve recommended to a lot of our portfolio companies to raise more than what they needed at the time to be able to power through what’s happening now and what will happen on the economy side as well."

— Amidi says about investment advice they've given to Plug and Play startups.

“A lot of hardware companies get too intense in terms of thinking about one avenue of fundraising. Spend a lot more time thinking about fundraising strategy.”

Malek says on fundraising for hardware startups specifically. He adds that there are other options for generating cash flow, like grants. "Don't forget the business side of things" he adds. "I know early on, a lot of founders are focused on the technology and prototyping, but it's important as well to think about a compelling narrative for potential investors — even if you're pre-revenue."

"For SaaS, it’s important to have a unique differentiation. There are a lot of copy cats in this realm. It’s ok to be doing something that has competitors — every startup has competitors."

— Malek says about software-as-a-service startups pitching to investors. "It's a red flag when we're talking to a startup — especially one with a SaaS product — that says we don't have competitors," he adds, saying it's usually not true.

“A lot of investors out there prefer teams with multiple founders and not just one founder. It never hurts, at least in an investor’s eyes, to have two or three founders.”

— Malek explains, responding to a question about how to begin the process of bringing another co-founder on board. Investors, he says, value a team with diverse backgrounds and expertise.

“Take your time — it’s kind of like picking a spouse or partner. You want to make sure you’re compatible.”

Amidi adds, saying it's an exceptionally difficult process nowadays. She recommends reaching out to your network for leads on a potential co-founder or even looking into sites like AngelList or LinkedIn.

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Building Houston

 
 

In this roundup of short stories, Houston has been recognized as an emerging hub for life sciences, HCC wins an award for entrepreneurship, and more local innovation news. Photo by Dwight C. Andrews/Greater Houston Convention and Visitors Bureau

Houston's innovation ecosystem has been booming with news, and it's likely some might have fallen through the cracks.

For this roundup of short stories within Houston innovation, see why Houston has been named a top emerging hub for life sciences, Hatch Pitch reveals its cybersecurity startup winners, and more.

Houston named an emerging life science hub

A new report finds that Houston's life sciences scene — soon to be home to TMC3 — is growing. Courtesy of Elkus Manfredi Architects

According to a new report from CBRE, Houston is on track to be a top market for life sciences. The report factored in size and growth of life-sciences employment, the venture capital and National Institutes of Health funding, and more.

"Interest in Houston's life sciences sector from developers, investors and financial backers has grown significantly in recent years," says Nelson Udstuen, senior vice president at CBRE, in a press release. "Several factors have contributed to this, including an increase in both federal funding from NIH and private venture capital, a growth in R&D employment and commitments from Texas Medical Center member institutions and other private developers to establish new life science buildings and campuses."

Houston's life-sciences industry, which comes in at No. 2 on the list behind Pittsburgh and ahead of Austin, ranks within the 20 largest in the U.S. by employment. In terms of growth, Houston is expanding at a 6.5 percent pace from 2018 to 2019. Houston institutes received around $600 million in funding from NIH last year, which amounted to the 12th-largest sum by market.

"Houston is also a draw for the life sciences industry due to its large cluster of life science employees," continues Udstuen. "Our market is home to a large population with the technical ability to perform Research and Development, meaning employers do not have to focus as heavily on recruiting from other markets."

Inaugural pitch competition names winners

pitch

Hatch Pitch named the winners of its inaugural cybersecurity-focused competition. Photo via Getty Images

Houston-based Hatch Pitch announced its Cyber Pitch competition in December, and, other than having to pivot to virtual, the competition went off without a hitch. The winners at the Houston Cyber Summit were revealed on October 22.

  • Toronto-based Paqt took first place
  • PixoAnalytics, based in Bonn, Germany, came in second
  • And Austin-based Clocr placed in third place as well as the Audience Favorite.

Hatch Pitch will return in March 2021 for the Hatch Pitch Digital Summit, but until then, check out video clips and the pitches from Cyber Pitch 2020 online.

Houston college receives national entrepreneurship award

Houston Community College has been named the 2020 Heather Van Sickle Entrepreneurial College of the Year. Photo via HCC.edu

The National Association for Community College Entrepreneurship has named Houston Community College as the 2020 Heather Van Sickle Entrepreneurial College of the Year at its 18th Annual Conference in Nashville, Tennessee, earlier this month.

"Houston Community College is a model of how colleges contribute to their local entrepreneurial ecosystems," says Rebecca Corbin, president and CEO of NACCE, in a news release. "Through persistence and entrepreneurial mindset and action, HCC has scaled replicable and sustainable entrepreneurial programs that have impacted thousands of students over the past several years. It is a pleasure to recognize this outstanding college, which was selected by an independent judging panel, as the winner of NACCE's 2020 Entrepreneurial College of the Year Award."

Energy tech startup names new CEO

Tachyus has a new head honcho. Photo via tachyus.com

Data-focused energy software startup Tachyus has announced the promotion of Fernando Gutierrez to CEO — formerly vice president of customer success.

"We are in a unique time within the upstream oil and gas space, and I truly believe Tachyus has the ability to pioneer the acceleration of the digital transformation within the industry," says Gutierrez, in a news release. "We are at the intersection of innovation and conventionalism, and I'm excited to lead the organization in a movement that continues to establish our technical solutions with our unique product signature."

Tachyus was founded in 2013 in Silicon Valley and recently relocated to Houston. The fresh funds will go into growing its cloud-based, artificial intelligence-enabled platform. Last year, the company raised $15 million in a round led by Houston-based Cottonwood Venture Partners.

Former CEO and Co-Founder Paul Orland has assumed the role of chairman.

Female founder selected for new program backed by Houston organization

Kim Roxie, founder of LAMIK Beauty, is among the 15 recipients of a new initiative. Photo via stacysrise.helloalice.com

Plano, Texas-based Stacy's Rise Project expanded its annual grant and mentorship program in order to give more aid to Black female business founders, who on average only receive 0.2 percent of venture capitalist funding, according to a press release. The organization teamed up with its longtime partner, Houston-founded Hello Alice, to back an additional 15 Black female founders with a total of $150,000.

Among the 15 recipients was Houston's own Kim Roxie of LAMIK Beauty. LAMIK Beauty is a beauty-tech company designed for multicultural women with products made with natural and organic ingredients.

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