Through a partnership with New Hampshire investors, Softeq has expanded its venture studio out of state. Image via hrknsscowork.com

A Houston tech services company has announced fresh funding and a new location for its venture studio focused on growing startups.

Softeq Development Corp. announced an additional commitment of $5 million to the Softeq Venture Fund. With the investment, Softeq has a new partnership that will work toward creating a satellite venture studio in New Hampshire with local investors. Launch New Hampshire will leverage the Softeq Venture Studio platform to back qualified startups from within and outside New Hampshire, according to a news release from Softeq.

“It’s a great time to invest in startup companies, and we saw an opportunity to bridge the gap between the growing innovation community here in Houston and the untapped investment community in New Hampshire,” says Christopher A. Howard, founder and CEO of Softeq, in the release. “We’re excited about this partnership because it provides the Softeq Venture Studio with a source of high-quality startups while also fostering the innovation ecosystem in New Hampshire and New England.”

The Softeq Venture Studio announced its inaugural cohort last year, launching to act as an investor and accelerator program that provides mentors, resources, and workspaces for promising tech startups. This is the first expansion of the program and the latest investment into the Softeq Venture Fund, which has raised over $25 million of its $40 million goal.

Michael and Jamie Simchik, New Hampshire real estate developers, and Terry Anderton, an experienced technology entrepreneur, are the founders of Launch NH. The satellite cohort will work out of HRKNSScowork in Concord, New Hampshire.

“New Hampshire has been slow to adopt an innovation ecosystem, but with nearby Boston enjoying continued startup successes, we have the unique opportunity to leverage what is happening in Massachusetts, as well as in Vermont and Maine,” says Simchik, founder and CEO of HRKNSScowork. “By working with Softeq, we want to help build the innovation community statewide and drive broad-based startup activity in the region, similar to what Softeq has accomplished in its Houston headquarters.”

Anderton founded Wagz, which was recently acquired, an early participant in the Softeq accelerator program. Through his experience with Softeq, the company says he wanted to help bring the program other startups in the region.

The Softeq Venture Studio has made investments into 27 startups from across the globe since it launched in 2021. Over the next three years, per the release, Softeq intends to invest in 40 companies each year, including at least 12 via Launch NH.

Payal Patel has a new gig. Photo courtesy

Houston tech company hires innovator to lead startup accelerator

new gig

A Houston software company has announced a new leader of its venture studio that supports tech startups.

Softeq Development Corp. has named Payal Patel as director of the Softeq Venture Studio. The studio, which announced its inaugural cohort last fall, a startup accelerator that provides business mentoring and engineering development resources. Recently, Softeq announced the $40 million Softeq Venture Fund that will support the operations and invest in member companies.

“We’re thrilled to have Payal join the team at Softeq. Her in-depth knowledge of the Houston startup community combined with her management consulting background makes her uniquely qualified for her new role,” says Christopher A. Howard, Softeq founder and CEO.

Patel will oversee programming and operation for the studio, and she will help in in selecting startups for investment as principal of the fund.

“I’m excited to join the talented team at Softeq," she says. "Having been a part of the Houston tech and startup community for a few years, I see a niche our team can fill. We aim to do our part supporting founders by providing capital, advice, and helping level up the community."

Patel joins Softeq most recently from Plug and Play's Houston office, which focuses on energy and sustainability startups, where she served as director of the program. She began her career as a management consultant for restructuring firm Alvarez & Marsal before she transitioned to running the corporate business development function for Station Houston.

Softeq Venture Studio is currently accepting applications for its spring cohort, which will run April to June, and applications are available online. The deadline for applications is Saturday, March 19. Candidates who apply for the program receive $125,000 in cash and services in exchange for 6 percent equity in their eligible company.

This week's roundup of Houston innovators includes Anouk van Pol of INGU Solutions, Eric Tait of Urban Capital Network, and Chris Howard of Softeq. Courtesy photos

3 Houston innovators to know this week

Who's who

Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — from venture capital to energy — recently making headlines in Houston innovation.

Anouk van Pol, co-founder and COO of INGU Solutions

INGU Solutions has established its U.S. office in Houston — and is ready to tap into the city's energy industry with its revolutionary pipeline inspection-as-a-service model. Photo via LinkedIn

After generating some fresh funds from U.S. investors in 2019, Canadian pipeline services company INGU Solutions decided it was time to open a new office somewhere in the country. The startup led by a father-daughter team chose Houston and opened up an office just ahead of the first wave of the COVID-19 pandemic.

“The idea was to be closer to our customers,” Anouk van Pol, COO, tells InnovationMap. “Houston is the oil and gas hub, and just being able to be in [our clients'] offices and be there in person it just helps. I hope at one point COVID passes and that we can make use out of it a bit more.

Despite the challenges of the pandemic, INGU, which uses data analytics and a small sensor to inspect pipes within the energy and water industries, grew 60 percent over the past two years. Click here to read more.

Eric Tait, co-founder at Urban Capital Network

Urban Capital Network have launched a fund-of-funds to allow investors to tap into later-stage startups at a much lower barrier of entry. Photo via urbancapitalnetwork.com

With its new fund of funds, Houston-based Urban Capital Network is allowing its members the chance to invest in venture funds at a much lower barrier of entry. The Horizon Fund II will deploy capital in up to five funds — each with 15 to 30 portfolio companies.

Eric Tait, co-founder at UCN, says they are looking for variety in the funds they invest in and are targeting top-tier, and highly rated VC firms all over the country that UCN's leadership has connections with.

“We’re relatively agnostic in terms of industry,” Tait says. “We do try to have a portfolio allocation that will create a return threshold that is varied.” Click here to read more.

Chris Howard, CEO and founder of Softeq

A Houston software company has announced its new venture fund. Photo courtesy of Softeq

Last week, Houston-based Softeq Development Corporation, a global full-stack development company, launched The Softeq Venture Fund, a $40 million venture fund to invest in seed and series A startup rounds. According to a news release, more than half the fund will be deployed to power the Softeq Venture Studio, Softeq's recently launched accelerator program.

“For generations, the state of Texas has been home to world-renowned tech companies who have greatly contributed to our regional success. As a local entrepreneur, advisor, and angel investor, it’s been my dream for many years to create a venture fund benefiting startups," says Christopher A. Howard, founder and CEO of Softeq, in the release. "I am proud to increase our support of the state’s early-stage tech community. Our investment fund is designed to attract tech visionaries from both inside and outside the state and grow innovative concepts in Houston." Click here to read more.

This week's roundup of Houston innovators includes Philipp Sitter of RepeatMD, Abbey Donnell of Work & Mother, and Chris Howard of Softeq. Courtesy photos

3 Houston innovators to know this week

who's who

Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — from health tech to software— recently making headlines in Houston innovation.


Philipp Sitter, founder of RepeatMD

RepeatMD offers its clients rewards-based software and is expanding with a new fintech tool. Photo via LinkedIn

Ever the entrepreneur, Philipp Sitter saw an opportunity to equip health service professionals with marketing tools. RepeatMD, founded in December 2020, specializes in white-label rewards apps for plastic surgeons, medical spas, dermatologists, and similar businesses. Now, it's expanding into the "buy now, pay later" fintech realm through a new deal with BTL Industries, a Marlborough, Massachusetts-based provider of body-sculpting equipment.

Through these services, Sitter sees his company being a one-stop-shop for this type of tech.

"We see us becoming ubiquitous in the industry, where anybody that's a dermatologist, a plastic surgeon, or a medical spa has [our app]," Sitter says. Click here to read more.

Abbey Donnell, founder and CEO of Work & Mother

Abbey Donnell, founder of Work & Mother

Abbey Donnell created a service before employers even knew they needed it. Courtesy of Work & Mother

Abbey Donnell knows she's doing something different. Her company, Work & Mother, builds out and runs lactation suites as an amenity to office buildings.

"We're in a strange niche of the industry. We don't really fall completely into a real estate bucket and we don't fall completely into a tech bucket," Donnell says. "It makes finding investors who really understand what we're doing a little bit trickier."

Despite these challenges, the company has grown and is even eyeing a national expansion. Click here to read more.

Chris Howard, CEO and founder of Softeq

A Houston software company has announced the five early-stage startups it will be supporting through its new venture studio. Photo courtesy of Softeq

A lasting tech ecosystem requires successful tech entrepreneurs to give back to the next generation of new businesses. Chris Howard knows that, and it's why his company, Softeq Development Corporation, announced its inaugural cohort for the Softeq Venture Studio. The program, which will be offered quarterly for four to six startups each cohort, is geared at helping its resident startups quickly develop their technology and build their businesses.

"Historically, most tech startups had a founder with development skills. However, we're now seeing more and more business people, doctors, and other professionals start companies, and they need a strong engineering partner to develop their products," says Christopher A. Howard, Softeq founder and CEO, in a news release.

"We take it several steps further with the Venture Studio providing technology business consulting, development services, and much-needed cash. We're a vested partner, so we also help secure follow-on funding for continued growth," he continues. Click here to read more.

This week's roundup of Houston innovators includes Chris Howard of Softeq, Stephanie Hertzog of Sodexo, and Moody Heard of Buildforce. Courtesy photos

3 Houston innovators to know this week

who's who

Editor's note: In the week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — oil and gas, tech development, and construction staffing — recently making headlines in Houston innovation.


Chris Howard, CEO of Softeq

On this week's episode of the Houston Innovators Podcast, Softeq Founder and CEO Chris Howard shares how he's focusing on supporting the Houston innovation ecosystem. Photo courtesy of Softeq

A sign of a blossoming innovation ecosystem is when experienced and successful founders turn their focus to supporting emerging startups. That's what Chris Howard, who founded his tech company over 20 years ago, is looking to do with a new innovation lab and more in the works.

"I want to give back as an entrepreneur and a Houstonian," Howard says on this week's episode of the Houston Innovators Podcast. "I really want to leverage Softeq's expertise in order to help these companies grow in the same way that we've been doing for a couple of decades now."

Howard shares more about the Softeq Innovation Lab and how COVID-19 has affected his business and technology in general on the episode. Click here to read more and stream the episode.

Stephanie Hertzog, CEO of Sodexo

Stephanie Hertzog is hoping the future workforce of her company and others within the energy industry better reflects the city's diverse populations. Photo courtesy of Sodexo

Ever since taking the helm at Houston-based Sodexo Energy Resources North America, CEO Stephanie Hertzog has been intentional with prioritizing diversifying the workforce of the company. In a Q&A with InnovationMap, she notes on how the energy industry has been known as pretty homogeneous, especially within the gender divide. But things are changing.

"And we need to all be focusing on getting more of not only diversity, but inclusion as well," she says. "It's not just about hiring a diverse group, it's about making those people feel included when they get here and having them want to stay and be a part of our industry." Read more.

Additionally this week, Hertzog expands on her call for the energy industry to diversify in a guest column for InnovationMap. Click here to read it.

Moody Heard, CEO of BuildForce

Houston-based Buildforce is developing a technology to better connect contractors and the trade professionals they employ. Photo courtesy of Buildforce

A Houston innovator is tapping into tech to disrupt a booming industry in Houston, Texas, and beyond .Buildforce is a construction staffing app that aims to more efficiently connect contractors to skilled workers in trades ranging from electrical, mechanical, and plumbing to flooring, concrete, painting, and more.

The company raised a $1.5 million pre-seed round led by Houston-based Mercury Fund and is led by CEO Moody Heard.

"Our key insight is that providing a superior service to construction employers starts with providing a superior experience for tradesmen and women," Heard says in a news release. "Talent is the greatest finite resource in construction in Texas. In order to deliver talent to our contractor partners, we've created a job placement experience that is simple, friendly, and transparent. That's something people in the construction trades aren't used to, and has helped us grow incredibly quickly over the past several months." Click here to read more.

On this week's episode of the Houston Innovators Podcast, Softeq Founder and CEO Chris Howard shares how he's focusing on supporting the Houston innovation ecosystem. Photo courtesy of Softeq

Longtime Houston tech entrepreneur prioritizes giving back to ecosystem​

HOUSTON INNOVATORS PODCAST EPISODE 77

When Chris Howard founded his technology consulting firm in 1997, there wasn't a tech scene in town. But as the company grew over the past 20-plus years, so did Houston's innovation ecosystem — and Howard had a front-row seat for it all.

Now, Softeq's CEO is making sure he's doing what he can to further support tech startups in Houston with the recently launched Softeq Innovation Lab.

"I want to give back as an entrepreneur and a Houstonian," Howard says on this week's episode of the Houston Innovators Podcast. "I really want to leverage Softeq's expertise in order to help these companies grow in the same way that we've been doing for a couple of decades now."

The lab exists to cultivate innovation in Houston and build upon the specialized software and hardware proficiency Howard and his Softeq team has — just as it has supported its clients over the past two decades. The full-stack, full cycle engineering services company not only executes programing projects for clients, but also helps them to realize what's possible. Working with both startups and larger corporations, Softeq works on over 100 projects a year.

"We see a full spectrum of what's possible that cuts across many different industries and technologies," Howard explains. "Even the big guys are in a bubble of their own world and don't necessarily know what's going on and what can be done today. We have that experience to help them."

It's an exciting time for the region in terms of tech and innovation, and Howard is ready to make sure Softeq is a part of the conversation.

"There's really a lot of tech in Texas, and we just need to be able to tell that story and connect the dots," he says on the show.

Specifically in Softeq's headquarters in Houston, the innovation lab is geared at supporting innovators from startups and corporations alike — and across industries.

"Houston really is ripe for innovation. The first wave of disruption was in Silicon Valley, but the second wave is happening in industries that are really central to Houston's economy — such as energy, health care, and financial services," Howard says.

One thing Howard hopes to be able to expand into next is financial support of startups.

"I would like to see us add a venture arm as well, where we're actually helping companies get funding both from us as well as other LPs in Houston," he says.

Howard shares more about the Softeq Innovation Lab and how COVID-19 has affected his business and technology in general on the episode. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Houston hospital joins the metaverse with new platform

now online

Houston Methodist has launched a platform that is taking medical and scientific experts and students into the metaverse.

The MITIEverse, a new app focused on health care education and training, provides hands-on practice, remote assistance from experienced clinicians, and more. The app — named for the Houston Methodist Institute for Technology, Innovation and Education, aka MITIE — was created in partnership with FundamentalVR and takes users into virtual showcase rooms, surgical simulations, and lectures from Houston Methodist faculty, as well as collaborators from across the world.

“This new app brings the hands-on education and training MITIE is known for to a new virtual audience. It could be a first step toward building out a medical metaverse,” says Stuart Corr, inventor of the MITIEverse and director of innovation systems engineering at Houston Methodist, in a news release.

Image courtesy of Houston Methodist

The hospital system's DeBakey Heart and Vascular Center has created a virtual showcase room on the app, and users can view Houston Methodist faculty performing real surgeries and then interact with 3D human models.

"We view the MITIEverse as a paradigm-shifting platform that will offer new experiences in how we educate, train, and interact with the health community,” says Alan Lumsden, M.D., medical director of Houston Methodist DeBakey Heart and Vascular Center, in the release.

“It essentially democratizes access to health care educators and innovators by breaking down physical barriers. There’s no need to travel thousands of miles to attend a conference when you can patch into the MITIEverse," he continues.

Image courtesy of Houston Methodist

Houston doctors get approval for low-cost COVID vaccine abroad

green light

A Houston-born COVID-19 vaccine has gotten the go-ahead to be produced and distributed in Indonesia.

PT Bio Farma, which oversees government-owned pharmaceutical manufacturers in Indonesia, says it’s prepared to make 20 million doses of the IndoVac COVID-19 vaccine this year and 100 million doses a year by 2024. This comes after the vaccine received authorization from the Indonesian Food and Drug Authority for emergency use in adults.

With more than 275 million residents, Indonesia is the world’s fourth most populous country.

IndoVac was created by the Texas Children’s Hospital Center for Vaccine Development and Baylor College of Medicine. Drs. Peter Hotez and Maria Elena Bottazzi lead the vaccine project. Bio Farma is licensing IndoVac from BCM Ventures, the commercial group at the Baylor College of Medicine.

“Access to vaccines in the developing world is critical to the eradication of this virus,” Hotez, co-director of the Texas Children’s Hospital Center for Vaccine Development and dean of the National School of Tropical Medicine at Baylor College of Medicine, says in a news release.

Aside from distributing the vaccine in Indonesia, Bio Farma plans to introduce it to various international markets.

“The need for a safe, effective, low-cost vaccine for middle- to low-income countries is central to the world’s fight against the COVID-19 pandemic,” says Bottazzi, co-director of the Texas Children’s Hospital Center for Vaccine Development and associate dean of the National School of Tropical Medicine at Baylor.

“Without widespread inoculation of populations in the developing world, which must include safe, effective booster doses, additional [COVID-19] variants will develop, hindering the progress achieved by currently available vaccines in the United States and other Western countries.”

Bio Farma says it has completed Phase 1 and Phase 2 clinical trials for IndoVac and is wrapping up a Phase 3 trial.

IndoVac is a version of the patent-free, low-cost Corbevax vaccine, developed in Houston and dubbed “The World’s COVID-19 Vaccine.” The vaccine formula can be licensed by a vaccine producer in any low- or middle-income country, which then can take ownership of it, produce it, name it, and work with government officials to distribute it, Hotez told The Texas Tribune in February.

Among donors that have pitched in money for development of the vaccine are the Houston-based MD Anderson and John S. Dunn foundations, the San Antonio-based Kleberg Foundation, and Austin-based Tito’s Vodka.

“During 2022, we hope to partner with the World Health Organization and other United Nations agencies to vaccinate the world. We believe that global vaccine equity is finally at hand and that it is the only thing that can bring the COVID pandemic to an end,” Hotez and Bottazzi wrote in a December 2021 article for Scientific American.

Houston research: How best to deliver unexpected news as a company

houston voices

According to Forbes, the volume of mergers and acquisitions in 2021 was the highest on record, and 2022 has already seen a number of major consolidation attempts. Microsoft’s acquisition of video game company Activision Blizzard was the biggest gaming industry deal in history, according to Reuters. JetBlue recently won the bid over Frontier Airlines to merge with Spirit Airlines. And, perhaps most notably, Elon Musk recently backed out of an attempt to acquire Twitter.

It can be hard to predict how markets will react to such high-profile deals (and, in Elon Musk and Twitter’s case, whether or not the deal will even pan out). But Rice Business Professor Haiyang Li and Professor Emeritus Robert Hoskisson, along with Jing Jin of the University of International Business and Economics in Beijing, have found that companies can take advantage of these deals to buffer the effects of other news.

The researchers looked at 7,575 mergers and acquisitions from 2001 to 2015, with a roughly half-and-half split between positive and negative stock market reactions. They found that when there’s a negative reaction to a deal, companies have two strategies for dealing with it. If it’s a small negative reaction, companies will release positive news announcements in an attempt to soften the blow. But when the reaction is really bad, companies actually tend to announce more negative news afterward. Specifically, companies released 18% less positive news and 52% more negative news after a bad market reaction.

This may seem counterintuitive, but there’s a method to the madness, and it all has to do with managing expectations. If people are lukewarm on a company due to a merger or acquisition, it’s possible to sway public opinion with unrelated good news. When the backlash is severe, though, a little bit of good PR won’t be enough to change people’s minds. In this case, companies release more bad news because it’s one of their best chances to do so without making waves in the future. If people already think poorly of a company due to a recent deal, more bad news isn’t great, but it doesn’t come as a surprise, either. Therefore, it’s easier to ignore.

It might make more sense to just keep quiet if the market reaction to a deal is bad, and this study found that most companies do. However, this only applies when releasing more news would make a mildly bad situation worse. If things are already bad enough that the company can’t recover with good news, it can still make the best out of a bad situation by offloading more bad news when the damage will be minimal. Companies are legally obligated to disclose business-related news or information with shareholders and with the public. If it’s bad news, they like to share it when the public is already upset about a deal, instead of releasing the negative news when there are no other distractions. In this case the additional negative news is likely to get more play in the media when disclosed by itself.

But what happens when people get excited about a merger or acquisition? In these cases, it also depends on how strong the sentiment is. If the public’s reaction is only minimally positive, companies may opt to release more good news in hopes of making the reaction stronger. When the market is already enthusiastic about the deal, though, companies won’t release more positive news. The researchers found that after an especially positive market reaction to a deal, companies indeed released 12% less positive news but 56% more negative news. Also, one could argue that the contrasting negative news makes the good news on the acquisition look even better. This may be important especially if the acquisition is a significant strategic move.

There are several reasons why a company wouldn’t continue to release positive news after a good press day and strong market reaction. First of all, they want to make sure that a rise in market price is attributed to the deal alone, and not any irrelevant news. A positive reaction to a deal also gives companies another opportunity to disclose bad news at a time when it will get less attention. If the bad news does get attention, the chances are better that stakeholders will go easy on them — a little bit of bad press is forgivable when the good news outshines it.

Companies may choose to release no news after a positive reaction to a merger or acquisition, the same way they might opt to stay quiet after backlash. They’re less likely to release positive news when stakeholders are already happy, preferring to save that news for the next time they need it, either to offset a negative reaction or strengthen a weak positive reaction.

Mergers and acquisitions can produce unpredictable market reactions, so it’s important for companies to be prepared for a variety of outcomes. In fact, Jin, Li and Hoskisson found that the steps taken by companies before deals were announced didn’t have much effect on the public’s reaction. They found that it’s more important for companies to make the best out of that reaction, whatever it turns out to be.

The researchers also found that, regardless of whether the market reaction was positive or negative, as long as the reaction was strong, companies could use the opportunity to hide smaller pieces of bad news in the shadow of a headline-making deal. Overall, the magnitude of the reaction mattered more than the type of reaction. People tend to have stronger reactions to unexpected news, though, so companies prefer to release negative news when market expectations are already low.

These findings are relevant beyond merger announcements, of course; they also point to strategies that could be useful in everyday communications. A key takeaway is that negative information is less upsetting when people already expect bad things — or when it comes after much bigger, and much better, news. Bad news is always hard to deliver, but this research gives us a few ways to soften the blow.

------

This article originally ran on Rice Business Wisdom and was based on research from Jing Jin, Haiyang Li and Robert Hoskisson.