Is the venture capital model broken? Are lower middle-of-the-country startup valuations a benefit or a hindrance? And what will the impact of the coronavirus be on startup investing? Getty Images

Last week's Houston Tech Rodeo celebrated Houston's development as an innovation ecosystem. One major component of the Bayou City's innovation growth is the amount of venture capital activity happening in Houston.

At a panel on Monday, InnovationMap hosted a discussion between three local investors about whether or not the VC model is broke, if Houston is too far behind the coasts, and even the effect of coronavirus on investment.

If you missed the event, here are some overheards from the panel.

“We weren’t sure whether [Houston] would be the best place or the easiest place to raise money in, but it’s been incredibly welcoming."

— Leslie Goldman, general partner at The Artemis Fund. The female-founded, female-focused fund launched last year and has made two investments so far — with three more to announce in the next few weeks.

“We have a lot of experience and expertise, and a lot of money and deep pockets. But how do we make sure we are taking advantage of everything going on in Houston outside of just investing in other funds?”

— Samantha Lewis, director of Goose, explains that Goose's model is a network of high net worth investors who share deal flow and diligence duties. The organization invests $10 million annually.

“We have a much more operator and business fundamental mindset. When we look at companies at Goose, we ask, ‘what’s the path to profitability?” — not just what the growth rate is.”

— Lewis says, adding that Houston has a different psychology of success than coastal innovation ecosystems, and that's apparent in her investors at Goose.

“As an entrepreneur in Houston you have to understand one thing, and that one thing is that companies in the middle of the country generally get a discount to companies on the coast."

— Blair Garrou, managing director at Mercury Fund says on the discrepencies between valuations of Houston companies versus coastal companies. Garrou explains that, "companies in the middle of the country grow at lower rates than their coastal counterparts not because of their company but because of the amount of capital that you put to work." Coastal VCs want to go all in on the startups with technology that's going to disrupt and take over an entire market.

“I think the question now is can Houston get caught up in the somewhat irrational exuberance so that you as entrepreneurs don’t have to get diluted as much in your investment. My thought is probably not, if I’m being honest.”

Garrou says of this big-money, all-in approach to venture capital you see on the coasts.

“When you talk about all-female-founded companies, the average valuation is $12 million, and all-male-founded companies, $25.5 million is the average. That’s a female discount.”

— Goldman says, acknowledging that while Houston companies are discounted compared to the coasts, companies with all female founders are also discounted despite making up 17 percent of exits last year.

“VCs have raised larger, and larger funds. With more funds, they have to deploy more money. A lot of them are competing with each other and that drives up valuations.”

— Goldman says, adding that she's heard the VC model being referred to as "broken" on the coasts, and it all comes down to valuations and growing VC funds with too much money.

“Whether or not coronavirus becomes the epidemic that everyone things it will be, what’s happening is it’s correcting the market.”

— Garrou says, comparing the pandemic to the 2008 recession. "I think we have an opportunity. If you look at every single downturn in the market, the greatest companies have come from those downturns," he adds.

“So many people are interested in Houston because they do believe Houston has great deals at more reasonable valuations. It should be really good for founders — it’s just a matter of not comparing yourself to what the coastal companies are getting.”

— Garrou says, adding that what's missing is a sophisticated angel investment foundation. While organizations like the Houston Angel Network and Goose exist, Houston is too big for just what exists now.

“I think one of the important things to do as we are growing the ecosystem is remember that we are not going to be a copy and paste model. We need to do it in our own way.”

— Lewis says about Houston's innovation ecosystem. "What we need to think about and embrace is different models of deploying capital," she says citing Goose as an example. "We need to get creative about that."

GOOSE has invested in a logistics automation startup that has just emerged from stealth-mode operations. Photo courtesy of Outrider

Houston investor group backs growing logistics automation startup emerging from stealth

Money moves

A Golden, Colorado-based logistics technology startup has emerged from stealth-mode operation aft two years of development to collect its recent $53 million investment that a Houston investor group contributed to.

Houston-based GOOSE has announced its participation in Outrider's recent raise, which included both a seed and series A round. The startup has created an autonomous yard operations tool for logistics purposes. The company also received investment from the likes of NEA, 8VC, Koch Disruptive Technologies, Fraser McCombs Capital, Prologis, Inc., Schematic Ventures, Loup Ventures, and more, according to a news release.

The goal of distribution yards is to keep semi-trailers full of freight moving quickly in the space between the warehouse doors and public roads. However, many of the processes that make up yard operations are manual, inefficient, and hazardous.

The current situation in logistics hubs is not optimized, and yard operations are ineffective and even hazardous.

"Logistics yards offer a confined, private-property environment and a set of discrete, repetitive tasks that make the ideal use case for autonomous technology," says Andrew Smith, founder and CEO of Outrider, in the release. "But today's yards are also complex, often chaotic settings, with lots of work that's performed manually. This is why an overarching systems approach – with an autonomous truck at its center – is key to automating every major operation in the yard."

Outrider's technology can automate repetitive and manual tasks, like moving trailers around, hitching and unhitching them, connecting and disconnecting trailer brake lines, and monitoring trailer locations, per the release.

"Outrider represents the type of company we at GOOSE want to fund," says Samantha Lewis, director of GOOSE, in a news release. "It is innovative, disruptive, and led by an all-star CEO that has a proven track record in recruiting top talent and top tier investors. GOOSE has been with Andrew from the beginning of his entrepreneurial pursuits and, still, he continues to impress us everyday."

Outrider, which has 75 employees — including 50 engineers focused on the automation technology — has launched pilots with Georgia-Pacific and four Fortune 200 companies. Smith says his relationship with GOOSE has had a positive effect on his career and his startup.

"The experience of GOOSE membership is unmatched. GOOSE, it's founder Jack Gill, and initial members, Art Ciocca and Rod Canion, played major roles in my entrepreneurial career by funding my first successful clean startup and then becoming seed investors in Outrider," says Smith in the release. "I am fortunate to have the team at GOOSE by our side again as we officially emerge from stealth and continue to scale the business."

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Rice University MBA programs rank among top 5 in prestigious annual report

top of class

Rice University’s Jones Graduate School of Business MBA programs have been ranked among the top five in the country again in The Princeton Review’s 2025 Best Business Schools rankings.

The university's MBA program in finance earned a No. 3 ranking, climbing up two spots from its 2024 ranking. Finance MBA programs at the University of Virginia's Darden Graduate School of Business and New York University's Leonard N. Stern School of Business were the only ones to outrank Rice, claiming No. 2 and No. 1 spots, respectively.

Rice's online MBA program was ranked No. 5, compared to No. 4 last year. Indiana University's Bloomington Kelley School of Business' online program claimed the top spot.

“These rankings reflect the commitment of our faculty and staff, the drive and talent of our students and the strong support of our alumni and partners,” Peter Rodriguez, dean of Rice Business, said in a news release. “They are exceptional honors but also reminders — not just of our top-tier programs and world-class faculty and students but of our broader impact on the future of business education.”

Rice also ranked at No. 6 for “greatest resources for minority students."

The Princeton Review’s 2025 business school rankings are based on data from surveys of administrators at 244 business schools as well as surveys of 22,800 students enrolled in the schools’ MBA programs during the previous three academic years.

"The schools that made our lists for 2025 share four characteristics that inform our criteria for designating them as 'best': excellent academics, robust experiential learning components, outstanding career services, and positive feedback about them from enrolled students we surveyed," Rob Franek, The Princeton Review's editor-in-chief, said in a press release. "No b-school is best overall or best for all students, but to all students considering earning an MBA, we highly recommend these b-schools and salute them for their impressive programs."

Rice's finance program has ranked in the top 10 for eight consecutive years, and its online MBA has ranked in the top five for four years.

Rice and the University of Houston also claimed top marks on the Princeton Review's entrepreneurship rankings. Rice ranks as No. 1 on the Top 50 Entrepreneurship: Grad list, and the University of Houston ranked No. 1 on Top 50 Entrepreneurship: Ugrad. Read more here.

Houston named ‘star’ metro for artificial intelligence in new report

eyes on AI

A new report declares Houston one of the country’s 28 “star” hubs for artificial intelligence.

The Houston metro area appears at No. 16 in the Brookings Institution’s ranking of metros that are AI “stars.” The metro areas earned star status based on data from three AI buckets: talent, innovation and adoption. Only two places, the San Francisco Bay Area and Silicon Valley, made Brookings’ “superstar” list.

According to Brookings, the Houston area had 11,369 job postings in 2024 that sought candidates with AI skills, 210 AI startups (based on Crunchbase data from 2014 to 2024), and 113 venture capital deals for AI startups (based on PitchBook data from 2023 to 2024).

A number of developments are boosting Houston’s AI profile, such as:

Brookings also named Texas’s three other major metros as AI stars:

  • No. 11 Austin
  • No. 13 Dallas-Fort Worth
  • No. 40 San Antonio

Brookings said star metros like Houston “are bridging the gap” between the two superstar regions and the rest of the country. In 2025, the 28 star metros made up 46 percent of the country’s metro-area employment but 54 percent of AI job postings. Across the 28 metros, the number of AI job postings soared 139 percent between 2018 and 2025, according to Brookings.

Around the country, dozens of metros fell into three other categories on Brookings’ AI list: “emerging centers” (14 metros), “focused movers” (29 metros) and “nascent adopters” (79 metros).