After an IPO, zip codes close to a company's headquarters see certain home prices and consumer spending rise, while more new businesses and jobs are created. Photo via Pexels

A massive company announces plans to bring its headquarters to town, and the locals can't stop grumbling. The added traffic. The noise. The shifts in neighborhood routine as a giant new facility gets up and running.

Then the company files for an IPO.

Over the next two years, the traffic and dust may well be forgotten as residents watch their local economy transform. Anecdotal evidence suggests that the mere change in a company's listing status, along with the liquidity it brings its shareholders, can significantly influence local economies.

That was certainly the case with Facebook in 2012, when CEO Mark Zuckerberg helped create a thousand new millionaires and a dozen new billionaires. In the six months following Facebook's IPO, the newly rich drove up real estate prices in the San Francisco Bay area by more than 15 percent as their previously illiquid stock wealth became liquid. Two and a half decades earlier, Dell's 1988 IPO created "Dellionaires" who got rich off their shareholdings and promptly moved into McMansions in the Austin area, forever changing the city.

But were these spillover effects isolated incidents — or the norm? In a recent study, Rice Business professor Alexander W. Butler set out quantify the impact of spillover effects on local economies.

Collaborating with Larry Fauver of the University of Tennessee and Ioannis Spyridopoulos of American University, Butler found that Facebook's and Dell's impacts were not one-offs: IPOs typically spark significant positive spillovers in local economies. What's more, the team determined that it is the listing decision, rather than actual capital raising, that boosts local labor markets, business environments, consumer spending and real estate.

But why? An IPO doesn't create a new company. It does, however, generate significant liquidity for the firm, for employees and for other shareholders who go forth into the community to spend their new cash. Investors' wealth also rises if a firm's stock price climbs after listing, as does a firm's wealth as it raises new capital.

To be certain that it's not just a firm's raising of capital that causes these spillovers, Butler and his team also looked at the effects of seasoned equity offering (SEO) activity, which doesn't involve a change in a company's listing status. What they found is that the effect of SEOs on local economies is insignificant. So capital raising alone is not enough.

To reach their conclusions, Butler and his colleagues selected 1,365 zip codes that had at least one IPO between 1998 and 2015. (The years 1999, 2000 and 2003 were excluded due to a lack of income data at the zip code level.) They also identified zip codes that were two miles, five miles and ten miles from a newly public company's headquarters.

Then they compared their selected zip codes to control zip codes in the same county using a matching process to compare "apples to apples." The team compared figures such as changes in home prices, the number of new mortgages, zip code business patterns, credit card spending, and income and wages for the two years following an IPO.

Analyzing these data, they found that when an IPO occurs, each $10 million in proceeds leads to an extra 0.7 new businesses in the surrounding area and 41 new local jobs. And while the price of expensive homes in the newly public company's zip code didn't increase, the prices of expensive homes in other zip codes within two miles of headquarters did rise — by $3,900 for the average expensive home valued at $590,000.

Prices were also higher in zip codes two to five miles away from headquarters, but less so. Growth of home prices, they discovered, gets a boost after the lockup period ends and shareholders can sell their stock, supporting the hypothesis that changes in investor liquidity cause that spillover. Further evidence of this came when they found that home prices climb even more when a firm's stock price jumps after the IPO.

But IPOs are not all good news for communities. Findings also showed IPO activity increases the odds that middle- to lower-income residents may have to move to lower-income zip codes. In the years following Facebook's IPO, workers in the Bay area such as police officers, teachers and firefighters were priced out of the housing market and relegated to long commutes to work.

Facebook has taken notice. The Chan Zuckerberg Initiative, a charitable foundation Zuckerberg cofounded with his wife, Priscilla Chan, has donated $3.6 million toward the city's housing crisis.

As future companies go public, leaders could be well served to recognize Butler's team's findings. Yes, when their firm gains better access to financial markets, they're really are helping lift up the local economy — just not everyone who's living in it.

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This article originally ran on Rice Business Wisdom and is based on research from Alexander W. Butler, a professor of finance at Jones Graduate School of Business at Rice University.

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Greentown Labs names Lawson Gow as its new Houston leader

head of hou

Greentown Labs has named Lawson Gow as its Head of Houston.

Gow is the founder of The Cannon, a coworking space with seven locations in the Houston area, with additional partner spaces. He also recently served as managing partner at Houston-based investment and advisory firm Helium Capital. Gow is the son of David Gow, founder of Energy Capital's parent company, Gow Media.

According to Greentown, Gow will "enhance the founder experience, cultivate strategic partnerships, and accelerate climatetech solutions" in his new role.

“I couldn’t be more excited to join Greentown at this critical moment for the energy transition,” Gow said in a news release. “Greentown has a fantastic track record of supporting entrepreneurs in Houston, Boston, and beyond, and I am eager to keep advancing our mission in the energy transition capital of the world.”

Gow has also held analyst, strategy and advising roles since graduating from Rice University.

“We are thrilled to welcome Lawson to our leadership team,” Georgina Campbell Flatter, CEO of Greentown Labs, added in the release. “Lawson has spent his career building community and championing entrepreneurs, and we look forward to him deepening Greentown’s support of climate and energy startups as our Head of Houston.”

Gow is the latest addition to a series of new hires at Greentown Labs following a leadership shakeup.

Flatter was named as the organization's new CEO in February, replacing Kevin Dutt, Greentown’s interim CEO, who replaced Kevin Knobloch after he announced that he would step down in July 2024 after less than a year in the role.

Greentown also named Naheed Malik its new CFO in January.

Timmeko Moore Love was named the first Houston general manager and senior vice president of Greentown Labs. According to LinkedIn, she left the role in January.

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This article originally appeared on our sister site, EnergyCapitalHTX.com.

Houston foundation grants $27M to support Texas chemistry research

fresh funding

Houston-based The Welch Foundation has doled out $27 million in its latest round of grants for chemical research, equipment and postdoctoral fellowships.

According to a June announcement, $25.5 million was allocated for the foundation's longstanding research grants, which provide $100,000 per year in funding for three years to full-time, regular tenure or tenure-track faculty members in Texas. The foundation made 85 grants to faculty at 16 Texas institutions for 2025, including:

  • Michael I. Jacobs, assistant professor in the chemistry and biochemistry department at Texas State University, who is investigating the structure and thermodynamics of intrinsically disordered proteins, which could "reveal clues about how life began," according to the foundation.
  • Kendra K. Frederick, assistant professor in the biophysics department at The University of Texas Southwestern Medical Center, who is studying a protein linked to Parkinson’s disease.
  • Jennifer S. Brodbelt, professor in chemistry at The University of Texas at Austin, who is testing a theory called full replica symmetry breaking (fullRSB) on glass-like materials, which has implications for complex systems in physics, chemistry and biology.

Additional funding will be allocated to the Welch Postdoctoral Fellows of the Life Sciences Research Foundation. The program provides three-year fellowships to recent PhD graduates to support clinical research careers in Texas. Two fellows from Rice University and Baylor University will receive $100,000 annually for three years.

The Welch Foundation also issued $975,000 through its equipment grant program to 13 institutions to help them develop "richer laboratory experience(s)." The universities matched funds of $352,346.

Since 1954, the Welch Foundation has contributed over $1.1 billion for Texas-nurtured advancements in chemistry through research grants, endowed chairs and other chemistry-related ventures. Last year, the foundation granted more than $40.5 million in academic research grants, equipment grants and fellowships.

“Through funding basic chemical research, we are actively investing in the future of humankind,” Adam Kuspa, president of The Welch Foundation, said the news release. “We are proud to support so many talented researchers across Texas and continue to be inspired by the important work they complete every day.”

New Houston biotech co. developing capsules for hard-to-treat tumors

biotech breakthroughs

Houston company Sentinel BioTherapeutics has made promising headway in cancer immunotherapy for patients who don’t respond positively to more traditional treatments. New biotech venture creation studio RBL LLC (pronounced “rebel”) recently debuted the company at the 2025 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago.

Rima Chakrabarti is a neurologist by training. Though she says she’s “passionate about treating the brain,” her greatest fervor currently lies in leading Sentinel as its CEO. Sentinel is RBL’s first clinical venture, and Chakrabarti also serves as cofounder and managing partner of the venture studio.

The team sees an opportunity to use cytokine interleukin-2 (IL-2) capsules to fight many solid tumors for which immunotherapy hasn't been effective in the past. “We plan to develop a pipeline of drugs that way,” Chakrabarti says.

This may all sound brand-new, but Sentinel’s research goes back years to the work of Omid Veiseh, director of the Rice Biotechnology Launch Pad (RBLP). Through another, now-defunct company called Avenge Bio, Veiseh and Paul Wotton — also with RBLP and now RBL’s CEO and chairman of Sentinel — invested close to $45 million in capital toward their promising discovery.

From preclinical data on studies in mice, Avenge was able to manufacture its platform focused on ovarian cancer treatments and test it on 14 human patients. “That's essentially opened the door to understanding the clinical efficacy of this drug as well as it's brought this to the attention of the FDA, such that now we're able to continue that conversation,” says Chakrabarti. She emphasizes the point that Avenge’s demise was not due to the science, but to the company's unsuccessful outsourcing to a Massachusetts management team.

“They hadn't analyzed a lot of the data that we got access to upon the acquisition,” explains Chakrabarti. “When we analyzed the data, we saw this dose-dependent immune activation, very specific upregulation of checkpoints on T cells. We came to understand how effective this agent could be as an immune priming agent in a way that Avenge Bio hadn't been developing this drug.”

Chakrabarti says that Sentinel’s phase II trials are coming soon. They’ll continue their previous work with ovarian cancer, but Chakrabarti says that she also believes that the IL-2 capsules will be effective in the treatment of endometrial cancer. There’s also potential for people with other cancers located in the peritoneal cavity, such as colorectal cancer, gastrointestinal cancer and even primary peritoneal carcinomatosis.

“We're delivering these capsules into the peritoneal cavity and seeing both the safety as well as the immune activation,” Chakrabarti says. “We're seeing that up-regulation of the checkpoint that I mentioned. We're seeing a strong safety signal. This drug was very well-tolerated by patients where IL-2 has always had a challenge in being a well-tolerated drug.”

When phase II will take place is up to the success of Sentinel’s fundraising push. What we do know is that it will be led by Amir Jazaeri at MD Anderson Cancer Center. Part of the goal this summer is also to create an automated cell manufacturing process and prove that Sentinel can store its product long-term.

“This isn’t just another cell therapy,” Chakrabarti says.

"Sentinel's cytokine factory platform is the breakthrough technology that we believe has the potential to define the next era of cancer treatment," adds Wotton.