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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Two Houston venture capitalists weigh in on the state of startup investing in an economic climate recovering from the COVID-19 crisis. Getty Images

Houston-based venture firm closes recent fund and reflects on COVID-19's effect on investing

must be the money

It's no secret that — in light of coronavirus-caused closures, market disruption, and historic unemployment — venture capitalist might be a little more hesitant to join in on a startup's investment round. Yet one Houston VC group has managed amidst the crisis — and even succeeded in closing its most recent fund.

Fitz Gate Ventures, which operates out of Houston but with the support of Princeton University, announced the closing of its Fund II on May 5. Focusing on seed and pre-seed rounds, co-founders and managing directors Mark Poag and Jim Cohen will be looking for startups across industries — usually with some revenue and customer base — to write around $500,000 checks to.

At a virtual panel event hosted by Houston Exponential, the investors say they have appreciated focusing on smaller deals in times like these — it's allowed them to work closely with their portfolio of 15 startups, two of which (Cheers and Spruce) have roots in Houston.

"We are definitely more hands-on with our founders," Cohen says on the panel, noting that it feels like they are having board meetings daily — virtually, of course.

Most of these meetings, Poag explains, are focusing on making sure the portfolio startups have enough runway with their cash reserves to make it at least through the end of the year without any new sales. Of course, that's meant cutting salaries and employees and finding other options to operate in a lean way.

Fitz Gate also has stayed in touch virtually with its Friends of Fitz group — a unique network of Princeton-related professionals (such as faculty, fellow VCs, domain experts, etc.) that give the investors and their portfolio companies a strategic advantage.

While the video conferences are useful to stay in touch with existing portfolio companies, Poag says he — as well as other VCs — might be wary of making new investments in this capacity.

"We haven't invested in any new companies since the COVID situation, but it will be interesting to see if we and other venture capital firms get comfortable with making investments without an in-person meeting," says Poag on the panel.

Generally, Cohen says he has observed a different investment environment since the beginning of March, and there's no clear indication when things will change.

"I think in the short-term, investing will be slower. Basically, people are still trying to figure out what's going on," Cohen says, noting how, in March, the tides seemed to change every 24 hours. "Now, things have started to slow down, but the ground is still shifting beneath our feet. I think most venture investors are proceeding cautiously."

Something else to keep an eye on, as the Fitz Gate founders have experienced, is that startups are making changes to their products in order to provide a more relevant offer to customers. One of the fund's portfolio companies is Houston-founded Spruce, which recently started offering disinfecting deals along with its concierge services to apartment dwellers.

"None of our companies have pivoted to change anything they are doing fundamentally to take advantage of the situation," says Cohen, citing some supply chain software startups and a charity-based startup that have also seen business success during the COVID-19 crisis.

However, approaching VCs for the first time is now a different story, amidst the crisis. While the Fitz Gate founders explain that they open and respond to every email inquiry from startups, that's not the case for most VCs who prefer a warm introduction — but maybe not even that considering the current economic climate.

"If you're approaching a venture investor today, you might get a bit of a weird look," Cohen says of startups looking to fundraise.

On the virtual panel, the duo shared some insight on their passion for venture funding, as well as some general advice for startups. One key takeaway from the investors was a reminder that most VCs are funding between 1 and 2 percent of deals that come across their table.

"Don't get discouraged," Cohen says. "Any venture fund you talk to, they're not geniuses. They are operating on very limited information about whatever it is you pitched them in a really short fashion."

While it is disheartening to hear a "no" from an investor, it doesn't mean the startup's idea or product isn't valid.

In wrapping up the call, Cohen remarks on the environment for Houston innovation. While he admits the ecosystem lacks access to funding, he observes that this will change in a matter of time.

"It's amazing how many startups in Houston — and the support infrastructure," Cohen says, noting startup development organizations like The Ion, The Cannon, and more. "So much going on in this ecosystem, so I think, in that sense, it's an incredibly vibrant place to be as a founder."

Apartment Butler has reemerged as Spruce with fresh funds to take the company to Denver and beyond. Photo via GetSpruce.com

Houston startup rebrands, closes $3 million investment round, and plans first out-of-state expansion

Spruced up

A Houston startup that coordinates hospitality services — such as cleaning, dog walking, etc. — has recently cleaned up itself, with a fresh rebranding and new funds to further develop the company.

Spruce (née Apartment Butler) has closed a venture capital round at $3 million. Princeton, New Jersey-based Fitz Gate Ventures led the round with three Texas investors: Houston-based Mercury Fund, the Houston Angel Network, and Austin-based Capital Factory, which recently announced its Houston outpost.

The fresh funds will allow for Spruce to expand its services out of Texas for the first time. Denver will be the first non-Texas market for the company, according to a news release. The funds will also go toward sales, marketing, and software development scaling.

"We could not be more appreciative of the support from these outstanding investors," says Ben Johnson, founder and CEO of Spruce, in the release. "Since our founding, we have grown aggressively as more and more apartment communities have seen the demand for hotel-inspired services increase dramatically. We look forward to continuing our strategic, rapid growth with this funding that will play a critical role in that expansion."

Last month, Apartment Butler rebranded into Spruce to better represent the company and its market disrupting features, according to a news release.

"Since our inception just a few short years ago, we have experienced an incredible rate of growth, demonstrating the demand residents have for hotel-inspired services in their apartment homes," says Johnson in the June 25 release. "We believe the new Spruce brand name better connects with consumers and reflects the full range of services we have to offer."

Spruce's services include daily chores, housekeeping, pet care (dog walking, pet sitting, etc.), and laundry and dry cleaning. Spruce has a B-to-B-to-C model in which it works with apartment communities to broker partnership deals to reach their residents.

Late last summer, Johnson closed a $2 million seed round for his company and expanded the company to Austin, hinting at the out-of-state growth being in the near future for the startup.



Apartment dwellers that live in a Spruce-partner community can access services through an app or desktop interface.Photo via GetSpruce.com

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Houston chemist lands $2M NIH grant for cancer treatment research

future of cellular health

A Rice University chemist has landed a $2 million grant from the National Institute of Health for his work that aims to reprogram the genetic code and explore the role certain cells play in causing diseases like cancer and neurological disorders.

The funds were awarded to Han Xiao, the Norman Hackerman-Welch Young Investigator, associate professor of chemistry, from the NIH's Maximizing Investigators’ Research Award (MIRA) program, which supports medically focused laboratories.

Xiao will use the five-year grant to develop noncanonical amino acids (ncAAs) with diverse properties to help build proteins, according to a statement from Rice. He and his team will then use the ncAAs to explore the vivo sensors for enzymes involved in posttranslational modifications (PTMs), which play a role in the development of cancers and neurological disorders. Additionally, the team will look to develop a way to detect these enzymes in living organisms in real-time rather than in a lab.

“This innovative approach could revolutionize how we understand and control cellular functions,” Xiao said in the statement.

According to Rice, these developments could have major implications for the way diseases are treated, specifically for epigenetic inhibitors that are used to treat cancer.

Xiao helped lead the charge to launch Rice's new Synthesis X Center this spring. The center, which was born out of informal meetings between Xio's lab and others from the Baylor College of Medicine’s Dan L Duncan Comprehensive Cancer Center at the Baylor College of Medicine, aims to improve cancer outcomes by turning fundamental research into clinical applications.

They will build upon annual retreats, in which investigators can share unpublished findings, and also plan to host a national conference, the first slated for this fall titled "Synthetic Innovations Towards a Cure for Cancer.”

Houston neighbor ranks as one of America's most livable small cities

mo city

Some Houston suburbs stick out from the rest thanks to their affluent residents, and now Missouri City is getting time in the spotlight, thanks to its new ranking as the No. 77 most livable small city in the country.

The tiny but mighty Houston neighbor, located less than 20 miles southwest of Houston, was among six Texas cities that earned a top-100 ranking in SmartAsset's 2024 " Most Livable Small Cities" report. It compared 281 U.S. cities with populations between 65,000 and 100,000 residents across eight metrics, such as a resident's housing costs as a percentage of household income, the city's average commute times, and the proportions of entertainment, food service, and healthcare establishments.

According to the U.S. Census Bureau, Missouri City has an estimated population of over 76,000 residents, whose median household income comes out to $97,211. SmartAsset calculated that a Missouri City household's annual housing costs only take up 19.4 percent of that household's income. Additionally, the study found only six percent of the town's population live below the poverty level.

Here's how Missouri City performed in two other metrics in the study:

  • 1.4 percent – The proportion of arts, entertainment, and recreation businesses as a percentage of all businesses
  • 29.9 minutes – Worker's average commute time

But income and housing aren't the only things that make Missouri City one of the most livable small cities in Texas. Residents benefit from its proximity from central Houston, but the town mainly prides itself on its spacious park system, playgrounds, and other recreational activities.

Missouri City, Texas

Missouri City residents have plenty of parkland to enjoy. www.missouricitytx.gov

The Missouri City Parks and Recreation Departmen meticulously maintains 21 parks spanning just over 515 acres of land, an additional 500 acres of undeveloped parkland, and 14.4 miles of trails throughout the town, according to the city's website."Small cities may offer cost benefits for residents looking to stretch their income while enjoying a comfortable – and more spacious – lifestyle," the report's author wrote. "While livability is a subjective concept that may take on different definitions for different people, some elements of a community can come close to being universally beneficial."

Missouri City is also home to Fort Bend Town Square, a massive mixed-use development at the intersection of TX 6 and the Fort Bend Parkway. It offers apartments, shopping, and restaurants, including a rumored location of Trill Burgers.

Other Houston-area cities that earned a spot in the report include

Spring (No. 227) and Baytown (No. 254).The five remaining Texas cities that were among the top 100 most livable small cities in the U.S. include Flower Mound (No. 29), Leander (No. 60), Mansfield (No. 69), Pflugerville (No. 78), and Cedar Park (No. 85).

The top 10 most livable small cities in the U.S. are:

  • No. 1 – Troy, Michigan
  • No. 2 – Rochester Hills, Michigan
  • No. 3 – Eau Claire, Wisconsin
  • No. 4 – Franklin, Tennessee
  • No. 5 – Redmond, Washington
  • No. 6 – Appleton, Wisconsin
  • No. 7 – Apex, North Carolina
  • No. 8 – Plymouth, Minnesota
  • No. 9 – Livonia, Michigan
  • No. 10 – Oshkosh, Wisconsin

The report examined data from the U.S. Census Bureau's 2022 1-year American Community Survey and the 2021 County Business Patterns Survey to determine its rankings.The report and its methodology can be found on

smartasset.com

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This article originally ran on CultureMap.

Cart.com's $130M payday, Houston sees VC uptick and more top stories

top stories

Editor's note:Let's roundup the most-read Houston innovation news from the week. Trending Houston tech and startup articles from InnovationMap and its daily newsletter included big startup financing and VC funding, a feature on a Houston startup working on data solutions in the wake of Hurricane Beryl, and more.

Houston e-commerce unicorn secures $130M in financing

Cart.com announced a $25 million series C extension round and $105 million in debt refinancing from investment manager BlackRock. Photo courtesy of Cart.com

Houston-based Cart.com, which operates a multichannel commerce platform, has secured $105 million in debt refinancing from investment manager BlackRock.

The debt refinancing follows a recent $25 million series C extension round, bringing Cart.com’s series C total to $85 million. The scaleup’s valuation now stands at $1.2 billion, making it one of the few $1 billion-plus “unicorns” in the Houston area.

Cart.com says the new term loan facility from BlackRock consolidates its venture debt into one package “at competitive terms.” Those terms weren’t disclosed. Continue reading.

Report: Amid difficult market, Houston sees uptick in VC funding

In the first six months of this year, Houston-area startups attracted $760.55 million in VC funding, which is up 17.7 percent from the same time last year. Photo via Getty Images

Houston-area startups saw a healthy increase in venture capital funding during the first half of 2024 compared with the same period last year, new data shows.

In the first six months of this year, Houston-area startups attracted $760.55 million in VC funding, according to the latest PitchBook-NVCA Venture Monitor. That’s up 17.7 percent from the $645.99 million collected in the first six months of 2023. Continue reading.

Houston cardiac health startup raises $43 million series B to grow AI-backed platform

Octagos Health has announced a $43 million series B raise that will bring their technology to many more hearts. Image via octagoshealth.com

A Houston-based tech company that has a product line of software solutions for cardiac health has raised funding.

Octagos Health, the parent company of Atlas AI — a software platform for cardiac devices like pacemakers, defibrillators, ambulatory monitors and consumer wearables — has announced a $43 million series B raise that will bring their technology to many more hearts.

Morgan Stanley Investment Capital led the investment, which also included funds from Mucker Capital and other continuing strategic investors. The goal of the raise is to supply funds to accelerate Atlas AI’s growth across the United States and to expand into other areas of care, including ambulatory monitors, consumer wearables, and sleep. Continue reading.

Houston startup taps into tech to provide key data in the wake of Hurricane Beryl

Resilitix AI is contributing to relief efforts of Hurricane Beryl. Photo by Brandon Bell/Getty Images

A disaster AI startup based in Houston is using tech to aid in the relief effort of Hurricane Beryl and beyond.

Resilitix AI is an AI-based digital twin for “disaster situational awareness” that has partnered with local organizations to assist in the wake of Hurricane Beryl, a Category 1 storm that hit Houston Sunday, July 7, resulting in power outages for over 2 million Houstonians and other structural and environmental damage. The storm is estimated to have had a $3.3 billion impact.

“Our mission statement is that we want to disrupt disaster impact with intelligence — intelligence of knowing what is going on and emergency teams will have the information so it can provide and identify the areas in need since the information they currently have has significant lag, and the effort they need to go to get that information is significant,” Ali Mostafavi, Resilitix's founder, tells InnovationMap. Continue reading.

Energy giant announces deal retail company to bring EV tech to Houston malls

Two malls in town — The Galleria and Katy Mills Mall — soon see bp's EV charging Gigahubs. Photo via Wikipedia

Two Houston-area malls will be getting bp's electric vehicle charging technology thanks to a new global collaboration.

The global energy company will be bringing its global EV charging business, bp pulse, to 75 shopping facilities across the country thanks to a partnership with Simon Malls. Two malls in town — The Galleria and Katy Mills Mall — soon see bp's EV charging Gigahubs. The company will install and operate the chargers at the two area sites.

The deal aims to deliver over 900 ultra-fast charging bays that will support most make and model of EVs with the first locations opening to the public in early 2026. Other Texas locations include Grapevine Mills in Grapevine, and Austin’s Barton Creek Square. Continue reading.

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