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

guest column

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.

------

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.

From Your Site Articles
Revterra Corp. closed a $6 million series A round led by Equinor Ventures. Photo courtesy of Revterra

Houston EV charging tech company raises $6M series A

money moves

Houston-based tech company Revterra Corp. has picked up $6 million in a series A funding round to propel development of its battery for electric vehicle charging stations.

Norway’s Equinor Ventures led the round, with participation from Houston-based SCF Ventures. Previously, Revterra raised nearly $500,000 through a combination of angel investments and a National Science Foundation grant.

Revterra says its kinetic flywheel battery enables quick, simple, cost-effective installation of high-powered DC chargers for electric vehicles. The technology eases the burden placed on electrical grids, the company says.

“There is an urgent need to reduce carbon emissions globally,” physicist Ben Jawdat, founder and CEO of Revterra, says in a news release. “Our goal at Revterra is to deploy scalable energy storage solutions that facilitate the shift to renewables and EVs while hardening our electric grid. Our systems enable these ambitions while utilizing materials that are recyclable and based on a secure supply chain.”

Jawdat earned a doctoral degree from the University of Houston, and he completed postdoctoral studies at Rice University and the Air Force Research Laboratory.

Revterra says its battery lasts eight times longer than traditional chemical batteries for EV charging do, supplies four times the power output, and causes less of an environmental impact.

“Revterra’s differentiated energy storage systems will be key to enabling fast charging capabilities for EVs and improving the resiliency of the power grid,” says Hossam Elbadawy, managing director of SCF Ventures. “A successful energy transition needs effective energy storage, and innovative technologies like Revterra’s flywheel will provide an important part of the answer.”

In 2021, Revterra joined Greentown Labs in Houston. The five-year-old startup says it plans to expand its workforce over the next 12 months, filling positions in areas such as electrical, mechanical, and manufacturing engineering. Some of those employees will be involved in building Revterra’s first assembly facility, which will be located in Houston.

Revterra plans to roll out its first full-size, commercial-ready batteries in 2023. The batteries are being designed to let an EV driver recharge a car’s battery in 15 minutes or less without taxing the existing electrical grid.

Ben Jawdat is the founder and CEO of Revterra. Photo via LinkedIn

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

eavesdropping online

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."

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

Houston urban agricultural nonprofit gears up for opening of new farm in Second Ward

GROWING FOR GOOD

Small Places, a Houston-based urban agricultural nonprofit, is looking forward to putting down roots beyond the fresh vegetables they grow in the East End.

After securing a 40-year land agreement with Harris County, the organization, which provides produce to families facing food insecurity in the Second Ward, is expecting to open their new farm in February 2025. Small Places’ founders hope the 1.5 acres of land named Finca Tres Robles, located at 5715 Canal Street, will be the beginning of Houston’s urban farming movement.

Founded in 2014 by brothers Daniel, Mark, and Thomas Garcia-Prats, Small Places was born out of the latter brother’s desire to work on an organic farm in his hometown of Houston. After farming in Maine, Iowa, and Nicaragua, Thomas had hoped to manage an urban farm but was unable to find a place. He then roped his brothers, who had no agricultural background at the time, into creating one.

“I joke that my journey in agriculture started the day we started out there. We didn’t grow up gardening or farming or anything of the sort,” says Daniel, Small Places’ director of operations. “It was a big learning curve, but how we approached it to our benefit was through our diverse set of backgrounds.”

Small Places began their need-based produce distribution programs through a partnership with nearby pre-school, Ninfa Lorenzo Early Childhood Center, providing food insecure families with fresh produce and later cooking lessons in 2017. When COVID-19 hit Houston in 2020, Daniel says Small Places pivoted towards becoming a redistribution center for their farming contacts who needed to offload produce as restaurants shut down, selling their crops through the organization. Their neighborhood produce program was then born, providing free boxes of produce to nearly 200 families in the East End at the pandemic’s peak.

“We found ourselves in the middle of two communities who were in need, one being people in our community who were losing jobs and were in need of food as well as our farming connections who were losing restaurant accounts,” Daniel explains.

Small Places grows a variety of vegetables at their East End based farm, selling them at a weekly farm stand. (Photo courtesy Small Places)Small Places grows a variety of vegetables at their East End based farm, selling them at a weekly farm stand. (Photo courtesy Small Places)

Small Places currently assists 65 families living predominantly within two miles of their original location and they recently restarted their programming with Ninfa Lorenzo Early Childhood Center, and accepts Supplemental Nutrition Assistance Program benefits (SNAP) at their farm stand. Daniel says once Finca Tres Robles opens, Small Places plans to bring back cooking classes and educational seminars on healthy eating for which his brother Mark, a former teacher, created the original curriculum. The farm will also have a grocery store stocked with Finca Tres Robles' produce and eventually food staples from local vendors.

“Being social and preparing a meal can be fun, interesting, and delicious. Being able to pull all of that into a program was really important for us,” Daniel explains.

Farming successfully in the middle of Houston for their subsidized programs and produce market requires Small Places’ team to be strategic in their operations. Using his background in engineering and manufacturing, Daniel says they’ve closely monitored trends in which crops perform the best in Houston’s varied, humid climate over the past decade.

They also follow Thomas’s philosophy of allowing nature to work for them, planting crops at times when specific pests are minimal or integrating natural predators into their environment. And lots of composting. Daniel says they accept compostable materials from community members, before burying the raw organic matter in the earth in between their plant beds, allowing it to mature, then later using it to nourish their crops. Daniel says he and his co-founders hope to see more community-focused, sustainable operations like theirs spring up across Houston.

“Small Places is about hopefully more than one farm and really trying to turn urban agriculture and a farm like ours from a novel thing into something that’s just a part of communities and the fabric of Houston for generations to come,” Daniel says.

Houston female-focused health tech accelerator names top companies at annual event

you go girls

A Houston organization that accelerates and supports female founders leading innovative health tech startups has concluded its 2024 program with the announcement of this year's top companies.

Ignite Health, an accelerator founded in 2017 by longtime Houston health care professional Ayse McCracken, named its 2024 winners at its annual Fire Pitch Competition in Houston last month. The companies pitched health tech solutions across lung health, renal therapy, breastfeeding tech, and more.

"This year’s competition was a culmination of passion, innovation, and hard work from the top startups in our 2024 Accelerator Program," reads a LinkedIn post from Ignite. "These trailblazing founders earned their spot on the stage by demonstrating exceptional leadership and the potential to revolutionize the healthcare industry with their solutions and devices."

First place winner was Sarah Lee, CEO and co-founder of Relavo, a New York-based company that's making home dialysis more effective, safer, and more affordable. Lee accepted awards from Johnson & Johnson and Wilson Sonsini Goodrich & Rosati.

Therese Canares, CEO and founder of CurieDx, took second place and won its awards from SWPDC - Southwest National Pediatric Device Innovation Consortium and Wilson Sonsini. CurieDx, based in Baltimore, Maryland, is creating remote diagnostic tools using smartphone technology.

In third place is Andrea Ippolito, CEO and founder of SimpliFed, a company focused on democratizing access to baby feeding and breastfeeding services through virtual care that's covered by insurance. The startup won awards from Texas Children's Hospital and Wilson Sonsini Goodrich & Rosati.

Three other finalists won other awards, including:

  • Kadambari Beelwar, CEO and co-founder, Henderson, Nevada-based Truss Health, which created an AI-powered sensor fusion platform that's designed to detect early signs of infection, won an award presented by Memorial Hermann Health System and Golden Seeds
  • Mimi Gendreau Kigawa, CEO and co-founder of New York-based Zeph Technologies, an AI-lung care company with technology for clinicians to deliver pulmonary care to patients with chronic respiratory disease, won an award presented by CU Innovations and Houston Methodist
  • Ashley Yesayan, CEO and co-founder, New York-based OneVillage, a software platform meant to support patients and family members through trying health events, won an award presented by CU Innovations

The companies were evaluated by the 2024 judges, which included: Allison Rhines, head of JLABS Houston; Andrew Truscott, global health technology lead at Accenture; Angela Shippy, senior physician executive at Amazon Web Services; Kimberly Muller, executive director of CU Innovations at University of Colorado Anschutz Medical Campus; Myra Davis, chief innovation and information officer at Texas Children's Hospital; and Winjie Tang Miao, senior executive vice president and COO of Texas Health Resources.

Houston expert: Balancing flexibility, accountability, and performance in a hybrid world

guest column

Amazon, Salesforce, and Nike are just a few companies making headlines in 2024 for requiring employees to return to the office.

At the same time, technology is evolving, automation and efficiency gains are taking center stage, and employees continue to seek greater flexibility. This has fueled the debate around the future of where work gets done in 2025 and beyond.

Proponents of a remote or hybrid work model believe it leads to increased employee productivity, higher job satisfaction, and access to a larger talent pool. Detractors have a different viewpoint – suggesting employee isolation is greater, cyber security concerns are more complex to manage, and it’s hard to accurately evaluate employee performance.

So, what’s the answer?

The future of work lies in harnessing the power of the employer/employee relationship. This involves establishing clear guidelines for what working “looks like” inside and outside the company, measuring performance tied to company goals, and holding leaders and employees accountable for how these interactions occur.

A remote work policy helps establish clear guidelines. For example, should business cameras be on for all meetings? What is considered an acceptable business casual dress code? Can pets be on screen? Addressing the issues around a remote workspace, how to interact during a meeting, and what to wear helps to define company expectations and how you would like your business to be represented.

Formal performance management tools and processes have been in place for decades. While an annual event is important, encouraging managers and employees to have regular and structured performance conversations and share transparent feedback (regardless of where they work) helps you celebrate what’s exceptionally good, acknowledge what’s on track, and quickly course correct when needed.

Accountability in the remote work environment goes both ways, and leaders must model the behaviors they expect from employees. When the rule is cameras on, that means everyone, regardless of their title. When you’ve established working hours, be available to take the call or respond to the Teams chat within a reasonable timeframe. And when you need to be away from work, set expectations for when and how to reach you.

So, where is the best place to start when updating or establishing guidelines? First, review your key business objectives and work out what’s required to support the successful achievement of those goals. Design your remote and/or hybrid model around those objectives and place employees at the forefront of that design.

If you think about it, it’s no different than being in the office. You expect your employees and managers to show up, be fully present, and hold themselves accountable. That should be the expectation no matter where you “sit.”

------

Michelle Mikesell is the chief people officer at Houston-based G&A Partners.

View All Listings