Show me the money

SXSW panelists: Improving access to funding is key for Houston's continued ecosystem growth

Houston, we have a problem — and it's helping local startups have access to funding. Photo by Zview/Getty Images

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.

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Building Houston

 
 

The HTX TechList is officially launched, and the Houston Exponential team is calling for everyone to register on the site. Screenshot via htxtechlist.com

Houston Exponential has hit launch on the HTX TechList, and now startups, investors, entrepreneurial hubs, and corporations can officially opt into the data-focused and networking-enabled platform.

The HTX TechList went live yesterday, August 13, at a virtual event hosted by HX. (Note: InnovationMap was the media partner for the event.) The platform acts as a one-stop shop for Houston's innovation ecosystem. Mayor Sylvester Turner joined the stream to explain the role the platform will play in connecting the various players within the industry.

"The HTX TechList is our city's leading resource for in-depth information about Houston startups, investors, hubs, and corporations," Mayor Turner said at the event. "Within the Houston region, the HTX TechList will build the connections and density that were never before possible in such a huge spread-out city."

Another benefit to the new platform, as HX Chief of Staff Serafina Lalany says, is the data it is going to be able to provide about the ecosystem.

"We needed a centralized datasource classifying startups, investors, startup development organizations, and corporate innovators," she says on the Houston Innovators Podcast. "There was not any good resource on the internet that was verified, centralized, and adhered to a data standard."

The platform, which has derived from an initiative from Startup Nation Central in Israel, has already proven its usefulness abroad and has over 70,000 monthly users. In a panel at the event, Eran Levy of Enel Innovation Hub Israel described how the tool has benefitted him and his work in scouting startups.

"The ability to have a tool to map, in our case, 8,000 startups, when we look for specific categories or a specific tech area, it helps us a lot," he says. "It saves a lot of time and effort, and, more importantly, it makes it much more effective because I reach out to the right startups."

On the panel, Barbara Burger, president of Chevron Technology Ventures and chair of Houston Exponential, echoed the opportunity for connectivity the platform will enable — but in a specific way for her organization as an investor.

"I view the TechList as the tool that's going to enable a couple of things. One is the scouts to access even more opportunities, but I think the other piece is also for co-investors in startups to be able to find us," she says, adding that while CTV has been around for a couple decades, visibility is always something they'd like to improve on.

Now that the platform is launched, anyone can join to make a profile on the site. Startups, investors, hubs, and corporations can also launch profiles that will be vetted by HX's data team.

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