Houston investor outlines how rare VCs are in Houston — and how to find them

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If you feel like it's hard to find venture capitalists in Houston, you wouldn't be wrong, according to this Houston investor. Photo via Getty Images

As a venture capitalist and former startup founder living in Houston, I get asked a lot about the best way to find and connect with a venture capitalist in Houston. My usual advice is to start with a list, and reach out to everyone on that list. But no one has a comprehensive list. In fact, VCs are such a quiet bunch that I’ve yet to meet someone who personally knows everyone on this proverbial list.

So, I got together with a couple of VC friends of mine, and we put together our own Houston venture capitalist list.

There are, by our count, 11 active venture capital funds headquartered in Houston of any size and type, and outside of corporate venture capital and angel investors, there are 30 total venture capitalists running funds.

Houston has always been quite thin on the VC fund front. I’ve jokingly introduced myself for a while as “one of the 13 venture capitalists in Houston.”

Let’s put this scale in some brutal perspective. With 7.2 million people in the Greater Houston Metro Area, the odds of finding a partner level active venture capitalist in Houston is about 1 in 240,000, if you take a most expanded definition of venture capitalist that might come down to 1 in 100,000. We’re the fifth largest metropolitan area in the country with a tremendous economic engine; there is a ton of capital in Houston, but it’s residing in things like institutional fixed income and equities, real estate, wealth management, corporate, private equity, family office, energy and infrastructure Basically, mostly everywhere but in venture capital funds for tech startups.

By comparison, there are almost as many Fortune 500 CEOs in Houston — 24, by our count — as venture capitalists and fewer venture capitalists than Fortune 1000 CEOs, of which there are 43. That means running into a VC in the checkout line at HEB is about as rare as running into the CEO of CenterPoint, ConocoPhillips, or Academy. In fact, as there are 115 cities in the Greater Houston area, you are three times more likely to be a mayor in Greater Houston Area than a partner at an investor at a VC firm, and more likely to be a college or university president. While we’re at it, you’re 400 times more likely to be a lawyer, 250 times more likely to be a CPA, and over 650 times more likely to be a medical doctor.

Our 30 venture capitalists in the Greater Houston Area are spread across 20 firms and all major venture sectors and stages. Venture capitalist is defined for this list as a full time managing director or partner-level investment professional actively running a venture capital fund with limited partners, currently investing in new venture capital deals from their fund from seed to growth stage, and residing in the Greater Houston Metro area.

To get to 31 we added in a couple of people running venture set asides for PE funds, and a number who work from Houston for funds with no office here. We excluded CVCs, as the decision making is more corporate than individual and rarely includes the committed fund and carried interest structure that defines venture capital, and excluded professionals at angel networks, accelerators, and seed funds that provide investment, but don’t manage conventional venture capital funds, as well as PE funds that do the occasional venture deal. We might be able to triple the number if we include venture capitalists at any professional level, and add in those professionals at PE and angel and seed funds, and corporate venture capital teams who are actively investing. But we’ll get to those other sources of funding in the next list.

The 11 venture capital funds headquartered in Houston are: Mercury, Energy Transition Ventures (my fund), Montrose Lane (formerly called Cottonwood), Texas Medical Center Venture Fund, Artemis, New Climate Ventures, Fitz Gate Ventures, Curate Capital, Knightsgate Ventures, Amplo Ventures,and First Bight Ventures.

Another half a dozen firms have a partner level venture capital investor here, but are headquartered elsewhere: Energy Innovation Capital, Decarbonization Partners, 1984 Ventures, Altitude Ventures, Ascension Ventures, Moneta Ventures, and MKB & Co. Two others, CSL Ventures and SCF Partners, are local private equity funds with a venture capital partner in Houston and a dedicated allocation from a PE fund.

Culling these for partner or managing director level currently in Houston, in alphabetical order by first name, LinkedIn profile and all.

We may have missed a couple of VCs hiding in plain sight, as venture capital is a pretty dynamic business.

VCs are just rare. And yes, perhaps more rare in Houston than in California. Something less than 1 in 100 VCs in the country live in Houston. Across the US there are somewhere around 1,000 to 2,000 active venture capital firms, and maybe another 1,000 to 2,000 active US based CVCs — so, plus or minus maybe at most 4,000 to 5,000 currently active partner level venture capitalists in the country excluding CVC professionals (active VCs and VC funds are really hard to count).

Perhaps in the most stunning statistic, the 7,386 elected state legislators in the US today outnumber the total number of American venture capitalists. Luckily for startup founders, the venture capitalists are more likely to return your phone call.

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Neal Dikeman is a venture capitalist and seven-time startup co-founder investing out of Energy Transition Ventures. He’s currently hosting the Venture Capital for First Time Founders Series at the Ion, where ETV is headquartered.

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The energy industry is finally prioritizing new technology and greener energy — both in light of and in spite of a global pandemic. Photo via Getty Images

Overheard: Here’s what these energy VCs think of the pandemic’s effect on the energy transition

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In a lot of ways, venture capital firms are tasked with predicting the future. They put money into tech and business services that are going to disrupt the status quo, and energy VCs are tasked with taking bets on the energy transition.

At a virtual event as a part of the 18th annual Rice Alliance Energy Tech Venture Forum, which is taking place online this week, a group of panelists moderated by Sandy Guitar, managing partner at the HX Venture Fund, discussed how the pandemic has affected the energy transition. The group of experts talked about the future of work, decarbonization, and more.

If you missed the event, here are a few key moments from the discussion.

“The role of digitization is going to be huge. The pandemic really exacerbated just how far oil and gas had been behind in that.”

— Sean Ebert, partner at Altira. Ebert explains that when times are good for energy companies, it's hard to get the attention of executives to introduce new technologies. Now, corporations are having to invest in tech that allows their employees to be mobile and remote.

“There’s never been a better time to invest in energy technology. … We are at a point where we can get the type of returns [we look for.]”

— George Coyle, managing partner at Energy Innovation Capital. Coyle adds that he's seen the pandemic effect major growth opportunities in energy startups in his portfolio.

“What we have is a sense of urgency that didn’t exist 15 years ago. Public companies virtually all have a sustainability report and need to show some sort of progress."

— Cory Steffek, managing director at Ara Partners. He adds, "I really think the opportunity in the near term is de-risking software or hardware technologies and showing people that you can construct assets where they can deploy substantial amounts of capital profitably. If you have that, from a returns standpoint, you have something that should generate significant yield."

“The part we have been focused on is how can you make the conventional more efficient, so energy-on-energy conversion is even better.”

— Hossam Elbadawy, managing director at SCF Ventures and technology partner at SCF Partners. He's referring to the question of whether to prioritize new low-carbon innovations or to make conventional methods more sustainable. His observation is that the solution is going to be a hybrid of both.

“When we think about the future of work, we think about what are the capabilities going to be required in the future to be able to improve operations in the field today?”

— Ricardo Angel, managing director and CEO of PIVA. Angel adds that, "a lot of activities might be replaced by AI," and he and his firm are thinking about how they can go about "developing the skills for the people who will be working with those tools."

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Houston space org to launch experiments aboard first mission into polar orbit

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Houston's Translational Research Institute for Space Health, or TRISH, will send its latest experiments into space aboard the Fram2 mission, the first all-civilian human spaceflight mission to launch over the Earth’s polar regions.

Fram2, operated by SpaceX, is targeting to launch Monday, March 31, at NASA’s Kennedy Space Center in Florida. The crew of four is expected to spend several days in polar orbit aboard the SpaceX Dragon spacecraft in low Earth orbit. TRISH’s research projects are among 22 experiments that the crew will conduct onboard.

The crew's findings will add to TRISH's Enhancing eXploration Platforms and ANalog Definition, or EXPAND, program and will be used to help enhance human health and performance during spaceflight missions, including missions to the moon and Mars, according to a release from TRISH.

“The valuable space health data that will be captured during Fram2 will advance our understanding of how humans respond and adapt to the stressors of space,” Jimmy Wu, TRISH deputy director and chief engineer and assistant professor in Baylor’s Center for Space Medicine, said in the release. “Thanks to the continued interest in furthering space health by commercial space crews, each human health research project sent into orbit brings us closer to improving crew member well-being aboard future spaceflight missions.”

The six TRISH projects on Fram2 include:

  • Cognitive and Physiologic Responses in Commercial Space Crew on Short-Duration Missions, led by Dr. Mathias Basner at the University of Pennsylvania Perelman School of Medicine. The crew will wear a Garmin smartwatch and a BioIntelliSense BioButton® medical grade device to track cognitive performance, including memory, spatial orientation, and attention before, during, and after the mission.
  • Otolith and Posture Evaluation II, led by Mark Shelhamer at Johns Hopkins University. The experiment will look at how astronauts’ eyes sense and respond to motion before and after spaceflight to better understand motion sickness in space.
  • REM and CAD Radiation Monitoring for Private Astronaut Spaceflight, led by Stuart George at NASA Johnson Space Center. This experiment will test space radiation exposure over the Earth’s north and south poles and how this impacts crew members.
  • Space Omics + BioBank, led by Richard Gibbs and Harsha Doddapaneni at Baylor College of Medicine. The experiment will use Baylor’s Human Genome Sequencing Center's Genomic Evaluation of Space Travel and Research program to gain insights from pre-flight and post-flight samples from astronauts.
  • Standardized research questionnaires, led by TRISH. The test asks a set of standardized research questionnaires for the crew to collect data on their sleep, personality, health history, team dynamics and immune-related symptoms.
  • Sensorimotor adaptation, led by TRISH. The project collects data before and after flight to understand sensorimotor abilities, change and recovery time to inform future missions to the moon.

TRISH, which is part of BCM’s Center for Space Medicine with partners Caltech and MIT, has launched experiments on numerous space missions to date, including Blue Origin's New Shepard rocket last November and Axiom Space's Ax-3 mission to the International Space Station last January.

Houston lab develops AI tool to improve neurodevelopmental diagnoses

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One of the hardest parts of any medical condition is waiting for answers. Speeding up an accurate diagnosis can be a doctor’s greatest mercy to a family. A team at Baylor College of Medicine has created technology that may do exactly that.

Led by Dr. Ryan S. Dhindsa, assistant professor of pathology and immunology at Baylor and principal investigator at the Jan and Dan Duncan Neurological Research Institute at Texas Children’s Hospital, the scientists have developed an artificial intelligence-based approach that will help doctors to identify genes tied to neurodevelopmental disorders. Their research was recently published the American Journal of Human Genetics.

According to its website, Dhindsa Lab uses “human genomics, human stem cell models, and computational biology to advance precision medicine.” The diagnoses that stem from the new computational tool could include specific types of autism spectrum disorder, epilepsy and developmental delay, disorders that often don’t come with a genetic diagnosis.

“Although researchers have made major strides identifying different genes associated with neurodevelopmental disorders, many patients with these conditions still do not receive a genetic diagnosis, indicating that there are many more genes waiting to be discovered,” Dhindsa said in a news release.

Typically, scientists must sequence the genes of many people with a diagnosis, as well as people not affected by the disorder, to find new genes associated with a particular disease or disorder. That takes time, money, and a little bit of luck. AI minimizes the need for all three, explains Dhindsa: “We used AI to find patterns among genes already linked to neurodevelopmental diseases and predict additional genes that might also be involved in these disorders.”

The models, made using patterns expressed at the single-cell level, are augmented with north of 300 additional biological features, including data on how intolerant genes are to mutations, whether they interact with other known disease-associated genes, and their functional roles in different biological pathways.

Dhindsa says that these models have exceptionally high predictive value.

“Top-ranked genes were up to two-fold or six-fold, depending on the mode of inheritance, more enriched for high-confidence neurodevelopmental disorder risk genes compared to genic intolerance metrics alone,” he said in the release. “Additionally, some top-ranking genes were 45 to 500 times more likely to be supported by the literature than lower-ranking genes.”

That means that the models may actually validate genes that haven’t yet been proven to be involved in neurodevelopmental conditions. Gene discovery done with the help of AI could possibly become the new normal for families seeking answers beyond umbrella terms like “autism spectrum disorder.”

“We hope that our models will accelerate gene discovery and patient diagnoses, and future studies will assess this possibility,” Dhindsa added.

Texas robotics co. begins new search for missing Malaysia Airlines flight 370

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Malaysia’s government has given final approval for a Texas-based marine robotics company to renew the search for Malaysia Airlines Flight 370, which is believed to have crashed in the southern Indian Ocean more than a decade ago.

Cabinet ministers agreed to terms and conditions for a “no-find, no-fee” contract with Texas-based Ocean Infinity to resume the seabed search operation at a new 5,800-square-mile site in the ocean, Transport Minister Anthony Loke said in a statement Wednesday. Ocean Infinity will be paid $70 million only if wreckage is discovered.

The Boeing 777 plane vanished from radar shortly after taking off on March 8, 2014, carrying 239 people, mostly Chinese nationals, on a flight from Malaysia’s capital, Kuala Lumpur, to Beijing. Satellite data showed the plane turned from its flight path and headed south to the far-southern Indian Ocean, where it is believed to have crashed.

An expensive multinational search failed to turn up any clues to its location, although debris washed ashore on the east African coast and Indian Ocean islands. A private search in 2018 by Ocean Infinity also found nothing.

The final approval for a new search came three months after Malaysia gave the nod in principle to plans for a fresh search.

Ocean Infinity CEO Oliver Punkett earlier this year reportedly said the company had improved its technology since 2018. He has said the firm is working with many experts to analyze data and had narrowed the search area to the most likely site.

Loke said his ministry will ink a contract with Ocean Infinity soon but didn’t provide details on the terms. The firm has reportedly sent a search vessel to the site and indicated that January-April is the best period for the search.

“The government is committed to continuing the search operation and providing closure for the families of the passengers of flight MH370,” he said in a statement.

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