Houston experts give advice for startups seeking financial aid from the CARES Act

from the profesisonals

Carolyn Rodz of Hello Alice and Aziz Gilani of Mercury Fund discuss their advice for startups looking for federal grants. Courtesy photos

The United States Congress recently passed the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, and it includes several initiatives that provide financial relief for startups and small businesses — but there are a few things these companies should know about the programs.

Houston Exponential hosted a virtual panel with Carolyn Rodz, CEO of Hello Alice, and Aziz Gilani, managing director of Mercury Fund. They broke down some of the concerns with some of the most popular programs.

The Payroll Tax Deferral stipulation allows you to push back paying your payroll tax, which is 6.2 percent of payroll, Gilani says in the livestream. Companies will be required to pay back half that tax in a year's time and the other half in two year's time.

Small businesses can also apply for emergency Economic Injury Disaster Loans, or EIDL loans, that won't require the first payment for a full year. The interest rate is 3.75 percent for for-profit businesses and 2.75 percent for nonprofits with up to a 30-year term. Businesses could even submit to receive a $10,000 grant on their application.

Then, there's the Paycheck Protection Program, or PPP.

"The PPP program is probably the most lucrative of the three programs for startups," says Gilani, "It's the one that has the largest financial impact."

To submit for PPP, business owners look at their last year's worth of payroll and utility expenses, then average out their monthly expenses, and multiply that by 2.5. Small businesses can submit for that amount or up to $10 million. If the loan is spent on their employees and utilities, it's turned into a grant and not required to be paid back. Gilani recommends checking with the SBA for the specific details, but notes that contract workers can't benefit from PPP and must submit individually for aid.

Regarding these programs, Rodz and Gilani shared some other advice as it pertains to Houston's small businesses and tech startups.

Apply ASAP

Banks are already overwhelmed with applications, and some have paused accepting new applications from some entities. Plus, you have no excuse, Rodz says, since the application is simple and can be completed in one sitting.

"Compared to what a normal government loan application looks like, it is light years better in terms of simplicity," says Rodz.

Go to your own bank

Banks are giving priority to existing customers, Rodz explains.

"Go talk to your banker, and really take the time," Rodz says. "They are prioritizing the clients they have relationships with."

There's a technical reason too, Gilani adds. It's easier for banks to submit for a pre-existing customer, and new customers require more paperwork.

Document everything

Currently, Gilani says, the way the program is working right now is it relies on good-faith self-certification of the business owner. The banks, based on approval, will just put the federal money into your bank account. However, there are people put in roles for this act that will come back to verify that everything was honest.

"Lying to the federal government about money they grant you is a felony that comes with jail time," Gilani says. "It's very important that — after all this craziness passes by and the government comes back to audit what happened — you have a lot of documentation in place in order to show that you were fulfilling your good-faith requirement of answering these questions honestly."

Gilani recommends keeping track of how you calculated your payroll, as well as being able to show the effect of the crisis is key. Then, after you receive the funds, you need to be able to show that you used the funds on your employees.

Consult a lawyer if you have questions on eligibility

There's been a lot of discussion on whether or not venture-backed startups qualify for PPP.

"One of the challenges of the program is that it is being administered by the Small Business Administration, which traditionally hasn't worked with venture-backed and angel-backed companies," Gilani says.

Usually, the SBA requires startups to indicate their employee count, which is not to exceed 500. However, if the company is venture-backed, the SBA requires the inclusion of all the employees of all the portfolio companies. Certain legislators have expressed that this wasn't the intention of the program and are working to provide solutions, Gilani explains, and he and Mercury Fund have been working with a legal team to find immediate work arounds.

"There have been lots of lawyers who have been working really hard on trying to solve this problem," Aziz "If anything, we've now created the lawyer stimulus act in the amount of billable hours we've had trying to figure out this problem."

Gilani also recommends getting your lawyer to sign a document confirming that, especially if you are a venture-backed company, that you intended to adhere to the rules of the program.

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UH lands $4M NIH grant to study early signs of autoimmune disease

NIH funding

The University of Houston recently received a $4 million National Institutes of Health grant to support a 10-year longitudinal study to identify the earliest biological markers of autoimmune disease.

Led by Chandra Mohan, the Hugh Roy and Lillie Cranz Cullen Endowed Professor of Biomedical Engineering, the study aims to examine what causes Systemic Autoimmune Rheumatic Diseases (SARDs) and to identify targets for future treatments. The study will be carried out in collaboration with Dr. Karen Costenbader at Harvard Medical School, Boston.

SARDs include conditions like rheumatoid arthritis, systemic lupus erythematosus, Sjögren’s syndrome and systemic sclerosis—all are considered chronic diseases currently without a cure. Autoimmune diseases affect over 30 million people globally, according to UH.

SARDs occur when the body’s immune system attacks healthy, non-threatening tissues and organs. According to UH, in these diseases, the body often attacks nuclear antigens, creating anti-nuclear autoantibodies, which can be early detection signs for SARDs in more than 50 percent of patients, Mohan says.

Researchers will study blood samples and environmental exposure over the 10 years to better understand anti-nuclear autoantibodies.

“Collectively, these studies will help identify the genetic, environmental and cellular factors that are operative at the two steps of SARD development, namely the emergence of anti-nuclear autoantibodies and disease onset,” Mohan said in a news release. “ More importantly, these studies will highlight functional molecular pathways and mechanisms that may be operative at each step."

Mohan predicts that looking at SARDs’ shared characteristics, rather than each disease individually, could help identify more treatment methods.

“Individual SARDs have been examined in silos without an attempt to discern shared underlying features at the molecular level,” he added in the release. “Current understanding of the initial (and likely shared) origins of SARDs is only rudimentary but urgently needed to develop means for prevention and treatment.”

Earlier this year, UH also received an $11 million NIH grant to conduct a first-of-its-kind study of early language development in children ages 18 to 24 months. Read more here.

New Texas Stock Exchange officially begins trading in Dallas

Welcome to Y'all Street

Two-step aside, New York Stock Exchange and Nasdaq. The Dallas-based Texas Stock Exchange, nicknamed Y’all Street, just kicked off live trading with five stocks — and lots of Lone Star ambition.

“The Texas Stock Exchange aims to revitalize competition for [stock] issuers, establish the premier venue for listings, and create a world-class trading platform for all market participants,” the exchange says in a fact sheet.

The exchange — whose Texas-influenced nickname is a nod to New York City’s Wall Street — has collected at least $275 million in investments. The roughly 90 financial backers of TXSE include Bank of America, BlackRock, Charles Schwab, Citadel Securities, Dell Family Office, Fortress, Goldman Sachs, and JPMorgan Chase.

Representatives of TXSE couldn’t be reached for comment. On its website, the exchange calls itself “the most well-capitalized equities exchange to ever be approved” by the U.S. Securities and Exchange Commission (SEC).

Not to be outdone, NYSE has launched Dallas-based NYSE Texas and Nasdaq has expanded its presence in Dallas.

Y’all Street adds to Dallas-Fort Worth’s rising status as a major hub for financial services, with The Wall Street Journal naming North Texas the country’s second biggest financial hub after New York City.

“A homegrown national exchange means more jobs, more investment, and more growth opportunities for businesses and communities across the Lone Star State,” Gabriela von zur Muehlen, senior vice president and chief policy officer at the Texas Association of Business, told The Texas Tribune.

Bulent Temel, an associate professor of practice in economics at the University of Texas at San Antonio, told Texas Standard that TXSE “is going to boost the credibility of the Texas economy.”

Texas’ estimated gross domestic product (GDP), a yardstick for the size of an economy, climbed to a record-setting $2.9 trillion in 2025, making it the state with the second highest GDP after California. DFW’s estimated GDP in 2023 stood at $744.6 billion, eclipsing the GDP of many countries.

“The center of gravity for American capitalism is now headquartered in the Boom Belt,” Abbott proclaimed in April, referring to an 11-state region (including Texas) in the South and Southeast that’s seeing tremendous economic and population growth. “The Texas Stock Exchange is the natural extension of that capitalism. It ensures that capital markets will reflect the quadrant that is driving American growth.”

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This article originally appeared on CultureMap.com.

Orion vehicle manager reflects on Artemis II, looks to 2028 moon mission

Q&A

Humanity is finally headed back to the moon after more than half a century. This year's launch of the Artemis II mission in the Orion spacecraft put four crew members in lunar orbit and tested the new ship developed by Lockheed Martin.

Everything went smoothly, safely returning astronauts home, but there is always room to improve. InnovationMap chatted via email with Orion vehicle manager Branelle Rodriguez, shortly after a talk at The Ion, for insight on how Orion might perform in the future as the next lunar landing approaches in early 2028.

InnovationMap: How satisfied are you with the way Orion operated on this past mission?

Branelle Rodriguez: Orion performed exceptionally well during Artemis II, successfully demonstrating critical spacecraft capabilities, including life support systems, displays and controls, and executing manual piloting operations. Artemis II brought humans back to the moon, achieving key exploration and scientific imagery, while validating systems essential for future Artemis missions.

IM: What is the most important thing you learned about improving Orion for the next mission?

BR: The Artemis II mission provided invaluable insights into crew operations and spacecraft performance in a deep-space environment. With every mission, NASA applies lessons learned to continuously improve Orion’s operations, validate design and ensure mission readiness. Artemis II offered our first opportunity to evaluate several new systems and gain a deeper understanding of what it is like for astronauts to live and work inside the spacecraft. The operational, technical and human factors data collected are being integrated across the program to refine future missions, reduce risk and enhance overall mission success.

IM: How has Orion helped the mission to explore space?

BR: Orion is one of NASA’s foundational elements for human deep space exploration—not only supporting the mission but serving as a core component of it. It is currently the only spacecraft capable of carrying crew on deep space missions and returning them safely to Earth from the high speeds required from the vicinity of the moon. No other spacecraft has the technology to endure the extremes that come with human deep-space travel, such as advanced environmental and life support, navigation, communications, radiation shielding, and the world’s largest ablative heat shield to protect the astronauts during reentry into Earth’s atmosphere. Orion has already taken astronauts to explore space farther than ever before—252,756 miles from Earth— and will carry crews to the moon on future missions to explore the lunar South Pole region. The astronauts’ observations, samples, and data collected on these future missions will expand our understanding of our solar system and home planet.

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This conversation has been edited for brevity and clarity.

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