3 Houston innovators to know this week

who's who

This week's roundup of Houston innovators includes Stephanie Campbell of HAN and The Artemis Fund, Larry Lawson of Proxima Clinical Research, and Vanessa Wyche of the Johnson Space Center. Courtesy photos

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

Stephanie Campbell, managing director of the Houston Angel Network and general partner at The Artemis Fund

Local investment leader talks trends in Houston venture capital activity

Stephanie Campbell joins the Houston Innovators Podcast last week to share some trends in early-stage investing. Photo courtesy of HAN

There were so many question marks at the beginning of the pandemic, especially for startup funding. Stephanie Campbell, who manages the most active angel network as well as a venture capital fund, says no one was sure how anything was going to pan out. Now, looking back on last year, VC did ok, she says on the Houston Innovators Podcast, and the Houston Angel Network saw membership growth.

"I think that given the markets with quite a bit of liquidity, people were looking for new and interesting ways to invest and make a return," Campbell says on the podcast. "In 2020, we actually grew by 30 percent and are up to 130 members of the Houston Angel Network and are continuing to grow through 2021."

Campbell shares more of her observations on the show and what she's focused on next. Click here to read more and stream the episode.

Larry Lawson, co-founder of Proxima Clinical Research

Larry Lawson joined InnovationMap for a Q&A about his startup's recent exit, his role on the boards of five med device companies, his investment activity, and more. Photo courtesy of Larry Lawson

When Larry Lawson started his career in the medical device industry, it was hard to get funding. The health tech founder and investor says if it wasn't oil or real estate, banks couldn't understand well enough to make a loan. So, he bootstrapped, raised from friends and family, and found venture capital support for his business endeavors over the years. Now, he's celebrating a $1.4 billion exit of his last business, Preventice Solutions, a deal that closed earlier this year.

The ecosystem in Houston has changed, he says, and he's seen it evolve as the Texas Medical Center grew and the Rice Business Plan Competition brought impressive student innovators from all around the globe.

"The health science community here in Houston is now known all over the world," he tells InnovationMap. "It's gonna just continue to grow and develop, and I hope to be a part of continue to be a part of it." Click here to read more.

Vanessa Wyche, director of Johnson Space Center

Vanessa Wyche is the first Black woman to lead a NASA center. Photo courtesy of NASA

For the first time, NASA has a Black woman at the helm of a space center. Vanessa Wyche has been named director of Johnson Space Center in Houston after serving as acting director since May 3.

"Vanessa is a tenacious leader who has broken down barriers throughout her career," Pam Melroy, deputy administrator of NASA, says in a news release. "Vanessa's more than three decades at NASA and program experience in almost all of the human spaceflight programs at Johnson is an incredible asset to the agency. In the years to come, I'm confident that Houston will continue to lead the way in human spaceflight."

As director of Johnson Space Center, Wyche now leads more than 10,000 NASA employees and contractors. Click here to read more.

The SEC expanded its definition of accredited investors, so now is the time for potential venture capitalists and angels to step up. Pexels

Here's what the new SEC accredited investor definition means for potential Houston VCs

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This month. the Security and Exchange Commission, or SEC, modified the definition of "accredited investor," with the effect of dramatically increasing the number of people eligible to participate in non-publicly traded investments.

The SEC definition of accredited investor establishes requirements for who may invest in private deals, startups, and private funds. These rules are meant to protect individuals from investing in assets that are high risk and have little publicly accessible information.

Historically, accredited investor status was limited to those that met certain wealth or income thresholds — specifically, a net worth of $1 million excluding primary residence, or $200,000 in annual income for an individual or $300,000 combined annual income for married couples. The SEC's thinking was that higher net worth individuals or higher earners likely have the sophistication to evaluate the risks and the ability to financially withstand potentially losing money they invested in a private investment.

However, with fewer companies going public and an increased interest in participating in private deals, startups, and funds many have suggested the accredited investor rule appeared more and more antiquated.

The SEC's new definition adds individuals with certain professional certifications (Series 7, Series 65, or Series 82 license) and "knowledgeable employees" at private funds, regardless of an individual's level of wealth or income.

Now, individuals with heavy involvement in and responsibility for investment activities and those with financial certifications are assumed to have the financial sophistication and ability to assess the risks of private investments. The SEC also added the clients and employees of family offices, which are investment arms of high net worth families. In addition, the SEC also expanded the married couples' income calculation to include "spousal equivalent" to capture non-married couples.

It remains to be seen whether these additions to the definition of accredited investors will add a significant number of new angel investors, as many of the individuals with such certifications already meet the previous net worth or income requirements. The startup ecosystem, however, has welcomed the move away from wealth and income criteria, as a good first step toward opening the private offering markets to more qualified individuals.

If you now find yourself meeting any of these qualifications of accredited investor, what now? The Houston Angel Network is a great resource to help you navigate these new waters, by providing a framework and network to learn how to evaluate investment opportunities. A common rule of thumb is that nine out of ten startups fail and will return zero dollars to investors. It is prudent to invest in several startups or through a fund with experienced and capable managers to get the needed diversification to expect a return on your investment in this asset class.

Angel networks throughout the country exist to educate accredited investors and provide a network of sophisticated and experienced individuals across industries to support due diligence. By working together and learning from experienced investors, newly accredited investors can avoid common investment mistakes and can develop skills to evaluate non-public investment opportunities.

The upshot of the expansion of accredited investors is that the SEC still expects such investors to be sophisticated and well educated about investment opportunities with high risks and rewards. Investors new to non-public markets should consider joining a network like the Houston Angel Network, where they can see hundreds of startups a year and learn from experienced investors.

Additionally, new accredited investors can engage in the local startup community by volunteering their services as a mentor at a local startup development organization like the Ion, Rice Alliance, Capital Factory, Mass Challenge, Plug and Play and many more. If you are considering investing in startups or a fund, please reach out to us at the Houston Angel Network for more ways to get involved and learn.

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Stephanie Campbell is managing director of Houston Angel Network and co-founder of The Artemis Fund.

Over the past few years, the Houston Angel Network has doubled its members and continues to grow despite COVID-19's economic effects. Photo via Getty Images

Houston Angel Network sees membership growth amid pandemic

investing in investors

While the COVID-19 pandemic caused some investors to hit pause on some deals, the Houston Angel Network, which has doubled its membership over the past couple years, has maintained its deal flow and investment, while taking every opportunity to connect members virtually.

"Nothing's really changed — in terms of our activity — other than the fact that we can't meet in person," says Stephanie Campbell, managing director of HAN. "We quickly pivoted to virtual."

Campbell — who also is also a founding partner at Houston-based, female-focused venture capital group, The Artemis Fund — says she still saw the interest and need on each side of venture deals.

"What I realized was, especially working at a venture fund, the deal flow isn't going away. Companies still need capital — and investors are still interested in looking at deals," Campbell tells InnovationMap.

HAN, which was founded as a nonprofit in 2001, continues to be touted as among the most active angel network in the country. The organization has five industry groups that it focuses its deals on — energy, life sciences, technology, consumer products, and aerospace.

At each monthly meeting, members hear three pitches. However, Campbell is vetting many more companies far more deals and passing them along the network as she goes. All in all, HAN investors do around 100 deals a year with an average investment of $100,000.

Since Campbell joined in 2018, membership has doubled from 60 members to 120. Campbell says it's her goal to get to 150 members by the end of the year.

Stephanie Campbell has led HAN as managing director since 2018.

"Despite COVID, we've continued to grow," Campbell says, adding that she's heard investors express that they have more time now to dive in. "People are very much still interested in learning about deploying their capital into early-stage venture. They're looking for a network of like-minded individuals."

Campbell explains that, with the switch to virtual pitches and events, HAN is congregating more than ever. In the spring, Campbell introduced a thought leadership series, called Venture Vs. The Virus, that brought investment leaders together to discuss how the pandemic was affecting venture capital.

HAN is also using this time to better tap into technology to connect members with startups. On the back end, Campbell says, she's looking to enhance digital engagement with members and also improve data reporting within the organization.

From increasing networking and educational events and growing membership, HAN is prioritizing growing its place in the Houston innovation ecosystem. Campbell says she sees the pandemic is causing investors and tech talent on the coasts to re-evaluate where their living, and that's going to benefit Texas. Houston is going to see an influx of tech talent coming to town, and that's going to translate to more startups being founded locally.

"We want to make sure that we are a big part of this transition toward a more diverse and resilient economy," Campbell says. "Now's the time to lean in on Houston."

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Following Silicon Valley Bank collapse, banking diversification is key for Houston founders

SVB shake up

Last week, Houston founder Emily Cisek was in between meetings with customers and potential investors in Austin while she was in town for SXSW. She was aware of the uncertainty with Silicon Valley Bank, but the significance of what was happening didn't hit her until she got into an Uber on Friday only to find that her payment was declined.

“Being positive in nature as I am, and with the close relationship that I have with SVB and how they’ve truly been a partner, I just thought, ‘OK, they’re going to figure it out. I trust in them,'” Cisek says.

Like many startup founders, Cisek, the CEO of The Postage, a Houston-based tech platform that enables digital legacy planning tools, is a Silicon Valley Bank customer. Within a few hours, she rallied her board and team to figure out what they needed to do, including making plans for payroll. She juggled all this while attending her meetings and SXSW events — which, coincidentally, were mostly related to the banking and fintech industries.

Sandy Guitar had a similar weekend of uncertainty. As managing director of HX Venture Fund, a fund of funds that deploys capital to venture capital firms around the country and connects them to the Houston innovation ecosystem, her first concern was to evaluate the effect on HXVF's network. In this case, that meant the fund's limited partners, its portfolio of venture firms, and, by extension, the firms' portfolios of startup companies.

“We ultimately had no financial impact on venture fund 1 or 2 or on any of our portfolio funds or our underlying companies,” Guitar tells InnovationMap. “But that is thanks to the Sunday night decision to ensure all deposits.”

On Sunday afternoon, the Federal Deposit Insurance Corp. took control of SVB and announced that all accounts would be fully insured, not just up to the $250,000 cap. Customers like Cisek had access to their accounts on Monday.

“In the shorter term, the great news is SVB entity seems to be largely up and functioning in a business as usual manner,” Guitar says. “And they have a new leadership team, but their existing systems and predominantly the existing employee base is working well. And what we're hearing is that business as usual is taking place.”

Time to diversify

In light of the ordeal, Guitar says Houston founders and funders can take away a key lesson learned: The importance of bank diversification.

“We didn't think we needed one last week, but this week we know we need a resilience plan," she says, explaining that bank diversification is going to be added to "the operational due diligence playbook."

"We need to encourage our portfolio funds to maintain at least two banking relationships and make sure they're diversifying their cash exposure," she says.

A valued entity

Guitar says SVB is an integral part of the innovation ecosystem, and she believes it will continue on to be, but factoring in the importance of resilience and diversification.

"Silicon Valley Bank and the function that they have historically provided is is vital to the venture ecosystem," she says. "We do have confidence that either SVB, as it is currently structured or in a new structure to come, will continue to provide this kind of function for founders."

Cisek, who hasn't moved any of her company's money out of SVB, has similar sentiments about the importance of the bank for startups. She says she's grateful to the local Houston and Austin teams for opening doors, making connections, and taking chances for her that other banks don't do.

"I credit them to really being partners with startups — down to the relationships they connect you with," she says. "Some of my best friends who are founders came from introductions from SVB. I've seen them take risks that other banks won't do."

With plans to raise funding this yea, Cisek says she's already started her research on how to diversify her banking situation and is looking into programs that will help her do that.

Staying aware

Guitar's last piece of advice is to remain confident in the system, while staying tuned into what's happening across the spectrum.

“This situation that is central to the venture ecosystem is an evolving one," she says. "We all need to keep calm and confident in business as usual in the short term while keeping an eye to the medium term so that we know what happens next with this important bank and with other associated banks in the in our industry."

Meet the Texas security experts building a framework for safer schools

For the Kids

For a large portion of his career, Mike Matranga worked as a Secret Service agent protecting the President and First Family all over the world.

He then moved to the Department of the Interior, specializing in domestic terrorism, when the 2018 shooting at Marjory Stoneman Douglas High School occurred. Only three months later, another school shooting happened in Santa Fe, Texas.

That's when Matranga received a phone call from a Texas superintendent, asking him to take his decades of security experience and training and develop a proactive school safety program — something that didn't yet exist. That comprehensive, holistic plan would go on to be ranked No. 1 in Texas and No. 5 in the nation.M6

Mike Matranga, M6 GlobalM6 Global's Mike Matranga.Photo courtesy of M6 Global

This led Matranga to found M6 Global, which today specializes not only in school safety plans but also programs for industrial and corporate settings and even major sporting events.

The team is comprised of current and former federal agents and security specialists, a psychiatrist, a leading emotional intelligence doctor, a former White House doctor, and emergency management experts. Together, they have more than 100 years combined experience in school safety, law enforcement, and national and global security.

And that's what's made Matranga's initiatives so successful: the people.

“Of all the measures and initiatives we implemented, the absolute most important thing we have are people who have the ability to make real change — which no camera system will provide," he says. "Simply teaching people how to identify pre-attack behavior, self-harm behavior, and a person in crisis will always be what is most important. Secondly, having the resources and courage to intervene once those things are identified will keep individuals off the path to violence. We must never discredit the human element.”

M6 Global also partners with ASAP Security Services in Houston to provide the most up-to-date technology and products, with everything from facial recognition software to cameras to threat detection software. It makes their services fully turn-key, and as Matranga says, "two brains are better than one."

Mike Matranga and President Joe Biden, M6 GlobalMike Matranga (left) with President Joe Biden.Photo courtesy of M6 Global

"At some point we have to realize that the law enforcement response that we adopted in the '80s is not working," he adds. "And it’s not just police — it’s the patterns and behaviors of people that will tell you there is a problem, so we need to shift from a reactive to a proactive mindset. We need to have actionable resources in place and a society that's better informed to recognize the signs before someone becomes a person in crisis."

To learn more about M6 Global and explore its services, visit here.

5 most popular innovation stories in Houston this week

what's trending

Editor's note:Another week has come and gone, and it's time to round up the top headlines from the past few days. Trending Houston tech and startup news on InnovationMap included Houston mayoral candidates weighing in on the tech ecosystem, a Houston startup raising funding, and more.

3 Houston innovators to know this week

This week's roundup of Houston innovators includes Joanna Nathan of Prana Thoracic, Alfredo Arvide of Cloche, and Susan Davenport of the Greater Houston Partnership. Photos courtesy

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 mobile ordering — recently making headlines in Houston innovation. Read more.

8 energy tech startups recognized at Houston's CERAWeek pitch competition

Here's what startups took home wins at CERAWeek. Photo by Natalie Harms/InnovationMap

Over 200 startups participated in CERAWeek this year, and 18 of those companies pitched at a Greater Houston Partnership event.

The Houston Energy Transition Initiative, an initiative to promote Houston's work within the energy transition, hosted its second annual HETI Energy Ventures Competition at CERAWeek Innovation Agora. The competition was divided into four categories. The first batch of startups consisted of five companies from the Texas Entrepreneurship Exchange for Energy, or TEX-E, a collaboration with Greentown Labs, MIT’s Martin Trust Center for Entrepreneurship, and universities across Texas.Read more.

U.K. carbon capture startup sets up new HQ in Houston

Carbon Clean is moving into the Ion for its United States headquarters. Photo courtesy of the Ion

A startup that produces carbon capture technology has set up its U.S. headquarters in Houston. Establishment of the HQ marks the company’s formal North American expansion.

Carbon Clean, based in the United Kingdom, says it will double the size of its U.S. workforce to meet greater demand for its CycloneCC technology. The company expects the U.S. to become its biggest market.

The startup’s technology has captured nearly two million tons of carbon dioxide at almost 50 sites around the world. Carbon Clean says CycloneCC can reduce the cost of carbon capture by as much as 50 percent with a footprint that’s 50 percent smaller than traditional carbon capture units. Read more.

This new partnership will triple Houston's electric vehicle rental fleet

A new initiative from the city of Houston and Hertz aims to boost Houston's electric vehicle rental fleet. Photo via Mayor Sylvester Turner/Facebook

A new partnership between The Hertz Corp. and the City of Houston will bring 2,100 rental electric vehicles to Houston, according to an announcement from the organizations earlier this week.

Dubbed Hertz Electrifies Houston, the program aims to boost Houston's EV rental fleet, as well add to the city's charging infrastructure and EV education and training opportunities.

The new vehicles will come from automakers Tesla, Polestar, and GM and can be rented to leisure and business customers, as well as rideshare drivers. Read more.

Experts address Houston's energy transition role — from research to commercialization

At a recent SXSW panel, four Houston energy experts discussed the importance of research, commercialization, and more in Houston to drive the energy transition. Photo via Getty Images

Every part of the energy industry is going to have a role in the energy transition — from the universities where the research and development is happening to the startups and the incumbent industry leaders, as a recent SXSW panel discussed.

“We are well known in Houston for being the energy capital of the world," Jane Stricker, executive director of the Houston Energy Transition Initiative, says as moderator of the panel. "The industry typically comes together with stakeholders to think about the solutions and how to solve this dual challenge of continuing to provide more energy to the world but doing it in a way that significantly reduces emissions at the same time.”

The panel, entitled "Ground Zero: Creating Pathways from Research to Scale Deployment," was put on by HETI, an organization under the Greater Houston Partnership, and took place Sunday, March 12, in Austin at SXSW. Read more.

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