Show me the money
SXSW panelists: Improving access to funding is key for Houston's continued ecosystem growth
A few weeks ago, Mayor of Houston Sylvester Turner and Station Houston CEO Gabriella Rowe proclaimed that Houston's up-and-coming innovation ecosystem was no longer up and coming: It had arrived. But what preceded that proclamation was years of figuring out what it was Houston could do to get to this point.
"We're the fourth largest city in the United States, and in 2015 were ranked 20th out of 25 ecosystems," Rowe says at a panel at the 2019 SXSW Interactive festival.
Following that shocking news, Rowe says the city's focus was on building tools — accelerators, incubators, education — but nowhere did anyone talk about funding. Now, years later, with plenty of accelerators, workspaces, and educational programs, Rowe says Houston now has a great pipeline of companies, but the problem is finding funding for them to tap into.
Entrepreneurs are looking for three things when it comes to finding ways to fund their companies, according to Rowe. They want it to be accessible capital — not something they have to take a class on to figure out how to get to it. They also want it to be impactful and local to where their headquarters is.
"When I think about accessible, impactful, and local, I think, well, not a lot falls into that category [in Houston]," Rowe says. "We're not doing it particularly well right now."
It's a structural problem, according to Rowe. While the city has built up its entrepreneurial climate, it hasn't yet made the same effort with investors.
"Even if we have one or two funds, we need an ecosystem that supports funding in the same way we have an ecosystem that supports entrepreneurs," she says.
Joe Milam, founder of Austin-based AngelSpan, an early stage investor relations platform, says the issue in Houston — and Austin — is that industries can be siloed. There's a huge need for an honest broker to connect the dots across the city, and that person needs to be impartial.
"You gotta care about your community first, before you care about your own agenda," Milam says. "Otherwise, you're going to flounder like Houston has, and how Austin still does."
One thing everyone agreed on during the Saturday, March 9, panel was that Houston has a lot of money, but it's been sitting on the sidelines. The mission is, in addition to bringing in venture capital firms, finding ways to engage money that's already in town.
"We have to produce tools to enable that capital that's hiding," Rowe says.