Houston innovator shares investment opportunities outside traditional VC model

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Angel investors, corporate venture, and more options for Houston startups outside of the traditional venture capital model.

In my last column about tapping into Houston's venture capital ecosystem, I identified the 31 venture capitalists in Houston. By most measures Houston is around 0.5 to 1 percent of US venture capital activity, and that low volume is reflected in the limited number of venture capitalists locally.

But outside of venture capital funds, founders often pull money from other places including angel investors, seed funds and corporate venture capital arms as well as cross-over investors. I got asked this morning by a founder at the Ion, where’s the rest of the list?

Houston has five active corporate venture capital funds, or CVCs, with at least one senior investment professional in Houston with and one with headquarters here (Chevron). A short list of the key investment professionals in the group includes:

There are maybe half a dozen other corporates In Houston that organize around a fund structure and governance of some type, and have been actively investing in venture capital rounds with professionals in Houston. Equinor, a long time corporate investor, Baker Hughes which relaunched a CVC effort in 2021, Mitsubishi has investment professionals in Houston, and Williams which launched a new CVC effort in 2022, as well as Occidental, BHP, and Waste Management which had active CVC efforts in the past that have gone a bit on ice, as did ConocoPhillips, P66 and Schlumberger. Two larger private equity funds Ara Partners and Quantum are active in venture capital deals, but in a more mixed model. This universe would probably add another 30 to 40 Houston based active investment professionals.

The city also has around 10 angel networks, pre-seed funds, pre-seed investors, and accelerators that write checks, typically in the $100K to $1 million range, but either without committed venture funds in an acceleration model, at varying degrees of active, scale, model, and type.

Layering them in no particular order the Houston universe expands by another dozen full time or mostly full time professionals, and a few dozen angels. I’ve included their main contacts below:

These are certainly not large numbers for a city our size, and commensurate with the size of the Houston startup market. But while the cupboard may be a bit bare, it’s not empty. As a founder chasing money, that’s about 75 to 100 names to go chase, with probably double that in active or semi-active angel investors investing through these pools.

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Neal Dikeman is a venture capitalist and seven-time startup co-founder investing out of Energy Transition Ventures.

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John "JR" Reale joins the Houston Innovators Podcast for a two-part series of interviews discussing Houston innovation, the Texas Medical Center, investment trends, and more. Photo via TMC.edu

Longtime Houston innovator talks investment trends and ecosystem evolution

houston innovators podcast episode 136

Over the years, John "JR" Reale may have transitioned to various roles within the Houston innovation ecosystem, but the people he was working with stayed the same.

"My focus is always on partnering with founders — I just get to do it with two amazing hats," Reale says on this week's episode of the Houston Innovators Podcast.

Those two hats are as executive in residence at Texas Medical Center Innovation and as managing director of Integr8d Capital, an early-stage fundless venture capital firm that invests with intentionality. Reale joined the podcast for a special two-part series. The first episode is out now and focuses on his career in innovation and investment. The second part, which comes out next week, covers health tech innovation and his work with Texas Medical Center.

Most people might know Reale as one of the co-founders of Station Houston, a hub for tech innovation and entrepreneurship that launched in 2015 and dissolved into a few entities like The Ion and Capital Factory in 2018. Reale says on the show that Station's success came at a crucial time for Houston.

"Our big insight was ultimately around two things. One, we had a great empathy about how lonely and challenging it is being a founder. It was about building an authentic community where folks wanted to be," Reale says on the show. "Later in 2016 and 2017, we had this idea of separating space for the services and the things that founders need — especially in a big city like Houston."

Reale says Station was focused on the founders and providing a centralized location for support — something that sprawling Houston didn't have before.

"Our mission was really simple," he says, "it was to serve entrepreneurs. We knew who we wanted to serve, and we knew it meant a lot of different things."

Around the time of Station, Mayor Sylvester Turner's office asked Reale to join a task force with Amanda Edwards and several other impactful parties. The mission there was to get everyone on the same page and not only see the city's potential for innovation, but work on developing it.

"We went through a journey as a task force," Reale says. "A lot of it was about learning together. One of the big insights were about meeting people where they were. You're bringing all different pockets of the community together, and it's not about dictating what people have to do."

When it comes to pointing to a turning point in Houston, Reale doesn't mince words.

"One of the most important moments for Houston was when we got kicked in the teeth with the Amazon HQ2 bid," he says. "Amazon came back with the shortlist of the 20 cities in North America — and Houston isn't on it. I remember being excited. It was arguably the most innovative company in the world saying 'no thank you.'"

Rather than feel defeated or disappointed, Reale says he was excited about the rejection. It was an opportunity to spur more work that needed to be done.

"That was the gut punch that folks needed to realize," he says. "Moments like that cause real reflection. Failure like that forces you to ask a different set of questions."

The pandemic has meant for another, though very different, turning point and opportunity — especially when it comes to investment.

"Over the last few years we've seen a positive impact of the pandemic — it's changed the barriers to capital coming into different geographies, and I think that's sustainable. We've created new norms and behaviors of where capital will go," he says.

There's still room to grow and opportunities to come to fruition — especially within the early-stage investment community, Reale says.

"I'd like to see more funds launch here with very intentional strategies — particularly seed and early-stage work. You usually find those to be more geographically close," he says. "That's an opportunity. And I'd like to see more awesome operators turned investors."

Reale shares more about Integr8d Capital and what he's working on now on the podcast episode, as well as in next week's episode. Listen to the first interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


Houston-based data management startup Graylog has fresh funds to fuel its growth. Photo via Graylog.org

Houston data management company closes $18M in fresh funding

money moves

A Houston company that's created a centralized log management solution has closed a new round in funding.

Graylog closed its $18 million growth equity round led by Richmond, Virginia-based Harbert Growth Partners, a new investor, and Minneapolis, Minnesota-based Piper Sandler Merchant Banking, the company announced today. The round also received contribution from existing investors Houston-based Mercury Fund and Integr8d Capital, as well as Germany-based HTGF.

"This investment will enable us to accelerate our global go-to-market strategies and enhancements to the award-winning solutions we deliver for IT, DevOps, and Security teams," says Andy Grolnick, CEO of Graylog, in a press release. "We're excited to have the support of new and existing investor partners to help us realize our potential."

Andy Grolnick is CEO of Graylog. Photo courtesy

Per the release, the funds will go toward growing the company's platform that allows its users the ability to capture, store, and enable real-time analysis of terabytes of machine data.

"Graylog is well-positioned to be a long-term winner in the rapidly growing market for log management and analysis solutions," says Brian Carney, general partner of Harbert Growth Partners, in the release. "With its focus on delivering a superior analyst experience coupled with a vibrant Open Source community, the company provides customers a compelling alternative to other log management solutions plagued with high complexity and high total cost of ownership (TCO). We are thrilled to partner with the Graylog team to leverage the significant opportunity that lies ahead for the company."

Over the past year, despite the challenging business climate, the company saw growth in business and even expanded its European operations, according to the release.

"As a long-standing customer, Graylog is strategic to our success. We are excited to see new investment that will enable the company to accelerate innovation and continue to deliver excellent log management and SIEM solutions," says Rob Reiner, CTO of PROS, in the release.

Venture Houston brought together key innovators and investors focused on Houston — here's what they said. Photo via Getty Images

Overheard: Here's what experts say on the future of startup investment in Houston

eavesdropping in houston

Last week, over 2,500 people registered to Venture Houston to talk about startups and venture capital in Houston for two full days.

The two-day conference, which was put on by HXVF, the Houston Angel Network, the Rice Alliance, and Houston Exponential, took place February 4th and 5th and brought together startups, investors, corporations, and anyone who cares to advance the Houston tech ecosystem.

Click here to see what companies won big in the event's startup pitch competition.

Throughout the various panels and keynote addresses, Houston innovation leaders sounded off on what the future of Houston looks like in terms of venture activity. Missed the discussion or just want a refresher on on the highlights? Here are some significant overheard moments from the virtual conference.

“The way I look at it, Houston has an opportunity to really emerge as one of the leading startup cities in the country.”

— Steve Case, chairman and CEO of Revolution Ventures and co-founder of AOL.

He makes a reference to the iconic line "Houston, we have a problem" — which now is defined by a time of opportunity. Case adds that his VC fund, Revolution, which has invested in Houston-based GoodFair, is looking for new investments in Houston.

“We were behind. We were slow to start, but in typical Houston fashion, now we are escalating with real momentum."

— Amy Chronis, Houston managing partner of Deloitte and 2021 Greater Houston Partnership board chair.

Chronis notes on the fact that VC activity in Houston is up 250 percent since 2016, and in that time the city has focused on diversifying its business. Now, the city touts its active corporate community, global diversity, and more.

"In Houston, companies and talent are looking at ways to change the world," she adds.

“I see there being a significant amount of seed capital taking off.”

— Stephanie Campbell, managing director of the Houston Angel Network and The Artemis Fund.

Campbell calls out new funds to Houston, like Golden Section Ventures and her own fund, Artemis. She adds that with over $700 million invested in Houston deals last year, the city is in a good place, and she is anticipating more angel activity.

"While this is really exciting progress, there's still a lot of work to be done in terms of seed and early-stage funding," she continues.

“I see there being billion-dollar venture funds here in Houston on the life science front over the next decade.”

— John "JR" Reale, managing director of Integr8d Capital.

Reale, who's also the executive in residence at TMC Innovation, says he's seen the growth and potential of the life science industry in Houston.

"You can see the intentionality of the infrastructure that's being built that's going to attract diverse founders and all talent," he says.

“What I really see is the trajectory for Houston has been changing over the last couple years.”

— Brad Burke, managing director for the Rice Alliance for Technology and Entrepreneurship.

Burke points to three things that have really moved the needle on Houston's progress as an innovative city. The first was the Texas Medical Center establishing its Innovation Institute a few years back, and the next is how Houston's top energy companies are making big moves to support the energy transition. Finally, he says, The Ion, which is set to open this year, is the third reflection point for progress.

“The Houston startup scene is a very special place. It’s a community I actively choose to be a part of, and it activates me every day.”

— Rakesh Agrawal, CEO and founder of SnapStream.

“We’ve got a really incredible story to tell.”

— Susan Davenport, senior vice president of economic development for the GHP.

Davenport adds that this is exactly what the GHP is doing — making Houston's story known. And she says they have talked to global business leaders and they describe the city as a modern, cosmopolitan, truly global city.

Here's who won big for Houston innovation. Photos courtesy

Houston Exponential names winners of inaugural innovation awards

And the winner is...

In a virtual awards program, Houston Exponential has revealed the winners of the inaugural Listies awards.

The Listies, brought to you by Houston Exponential in partnership with InnovationMap, named the winning companies and people across 12 awards on November 20 at 3 pm as a part of Impact Hub's annual The Houston Innovation Summit (THIS).

Nominations were open until Friday, November 6, and then a group of judges made up of members of the Houston innovation ecosystem reviewed the submissions to settle on the 38 finalists. Click here to see the finalists.

Here's who took home the big wins.

SDO Superstar: MassChallenge Texas

Photo courtesy of MassChallenge

A startup development organization can be an accelerator program, an incubator, or a coworking space — and organizations falling into all three of these sectors were nominated for this category. MassChallenge Texas, which has been running its non-equity, general accelerator program in Houston for two years, stood out to judges to take the win for the SDO Superstar category.

Individual Contributor: Slawek Omylski of SecurityGate

Photo via LinkedIn

The individual contributor award was meant to find and recognize a non-founder who was essential to the success of a Houston startup, and that's exactly how SecurityGate's team sees Slawek Omylski, director of engineering. Not only has he been essential from the start over three years ago when he joined as employee No. 4, but Omylski, when unexpectedly having to move back home to Italy, never missed a single meeting or tech deployment despite being an ocean away from the rest of his team. Known as "Suave" by his teammates, his nominators say Omylski is usually the first to arrive at the office and the last to leave.

Civic Innovation: Annapurna Solutions

Image viaannapurnasolutions.org

Everyone knows that the key to sustainability is reducing, reusing, and recycling, but the fact of the matter is no one has quite perfected recycling. Houston-based Annapurna Solutions is stepping in to help. The company provides innovative technology solutions to address waste and recycling challenges, helping to make cities smart and sustainable — like the company's ReciklApp.

Welcome to Houston: Greentown Labs

Photo via greentownlabs.com

Greentown Labs is a startup development organization, but it's are also a startup itself, but when it opens its doors in Houston in the spring, the organization isn't starting from scratch. After years of working with over 200 climatech companies in the Boston area, Greentown's expansion into Houston means incubating Houston energy tech companies and furthering the conversation and activation within the energy transition.

Investor of the Year: Integr8d Capital

Photo via TMC.edu

John "J.R." Reale has been a well respected mentor, entrepreneur, and investor in Houston for years. His firm Integr8d Capital has invested in several Houston companies, including Liongard from seed stage to series A and series B. Reale is also the entrepreneur in residence for the TMC Innovation Institute.

Corporate Innovator: Houston Methodist

Courtesy of Methodist Hospital/Facebook

Houston Methodist and its Center for Innovation led by Roberta Schwartz is leading health tech innovation in Houston. In January, the hospital opened its Technology Hub, 3,500-square-foot space renovated from a former 18-room patient wing to showcase and test new digital health technologies like virtual reality, ambient listening, wearables, and more. Additionally, the hub helped with the training of dozens of doctors with the rise of telemedicine during COVID-19.

Outstanding Leadership: Grace Rodriguez

Photo courtesy of Grace Rodriguez

Grace Rodriguez's career spans industry and time, but her leadership has been consistent throughout. She currently serves Impact Hub Houston as CEO and executive director. Her nominator calls her an inspiration and someone who "shows up," clearly loving everything she does and is responsible. During COVID-19, she's gone above and beyond to provide resources and information to everyone who needs it, including launching a fund to help pay for meals for health care workers and first responders. The LIFE Fund raised over $20,000.

COVID Phoenix: Luminare

Image via luminaremed.com

Originally founded by Dr. Sarma Velamuri to treat and fight sepsis, Luminare took its sepsis platform and pivoted it to created a COVID self-assessment and testing tool. Their digital platform directed 5.5 million people to COVID-19 testing sites in just 21 days, according to its nomination. The tool was used by Harris County and several other entities.

DEI Champion: Maria Maso

Photo courtesy of Nijalon Dunn

Maria Maso is looking out for minorities when it comes to investment. As the founder and CEO of the Business Angel Minority Association (baMa) — an Angel Association aimed at bridging minority-founded startups with accesses to capital — Maria has been a champion for diversity. She also has helped to educate and activate 40 diverse investors through baMa's Diversity Investor Academy, according to her nomination.

Mentor of the Year: Landi Spearman

Photo via LinkedIn

Landi Spearman's approach to mentorship, according to her nominee, is to mentor the full person — from professional to personal life — through Organized SHIFT, which focuses on helping highly productive leaders, individuals and organizations in their quest to sustain positive growth internally and externally. She also supports entrepreneurs though The Ion, Station Houston, General Assembly, the National Urban League, Power to Fly, Black Women in Science and Engineering, the Greater Houston Partnership, the Greater Houston Black Chamber, Pink Petro, and more.

People's Choice and Soonicorn: Liongard

Photos via LinkedIn

People's Choice was based off how many nominations the startups received, and Liongard was a clear winner. The company, which also won in the Soonicorn category, has experienced major growth and, as the nominations read, that's to both Joe Alapat and Vincent Tran, co-founders, credit. The company has raised $12 million to date — the most recent round, a $10 million Series A — closed this year.

Houston Exponential has announced the 38 finalists for the inaugural Listies Awards. Photo via Getty Images

Exclusive: HX names finalists for inaugural Houston innovation awards

the listies go to...

Ever wonder what Houston startups and innovators are the best of the best? Here's your chance to figure it out. The inaugural Listies awards program has named its finalists.

The Listies, brought to you by Houston Exponential in partnership with InnovationMap, will name the winning companies and people across 12 awards on November 20 at 3 pm at a virtual event as a part of Impact Hub's annual The Houston Innovation Summit (THIS). Click here to register for the free event.

Nominations were open until Friday, November 6, and then a group of judges made up of members of the Houston innovation ecosystem reviewed the submissions to settle on the finalists. Below, in alphabetical order, the 38 finalists are listed for each category.

DEI champion

  • Heath Butler
  • Maria Maso
  • Grace Rodriguez

Individual contributor

  • Michael Matthews
  • Slawek Omylski
  • Brad True

Mentor of the year

  • Keith Kreuer
  • Wade Pinder
  • Landi Spearman

Outstanding leadership

  • Stephanie Campbell
  • Grace Rodriguez
  • Roberta Schwartz

Corporate innovation

  • Chevron Technology Ventures
  • Houston Methodist
  • Shell Ventures

Investor of the year

  • CSL Capital Management
  • Golden Section VC (GSTVC)
  • Integr8d Capital

SDO superstar

  • MassChallenge Houston
  • Rice Alliance
  • TMCx

Welcome to Houston

  • Greentown Labs
  • TestCard
  • Win-Win

Civic engagement

  • Annapurna
  • Luminare
  • McMac Cx

COVID pivot/phoenix

  • Luminare
  • re:3D
  • sEATz

People choice

  • INK
  • Liongard
  • Luminare
  • re:3D
  • Topl

Soonicorn

  • GoExpedi
  • Liongard
  • Medical Informatics Corp.
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Rice University launches hub in India to drive education, tech innovation abroad

global mission

Rice University is launching Rice Global India, which is a strategic initiative to expand India’s rapidly growing education and technology sectors.

“India is a country of tremendous opportunity, one where we see the potential to make a meaningful impact through collaboration in research, innovation and education,” Rice President Reginald DesRoches says in a news release. “Our presence in India is a critical step in expanding our global reach, and we are excited to engage more with India’s academic leaders and industries to address some of the most pressing challenges of our time.”

The new hub will be in the country’s third-largest city and the center of the country’s high-tech industry, Bengaluru, India, and will include collaborations with top-tier research and academic institutions.

Rice continues its collaborations with institutions like the Indian Institute of Technology (IIT) Kanpur and the Indian Institute of Science (IISc) Bengaluru. The partnerships are expected to advance research initiatives, student and faculty exchanges and collaborations in artificial intelligence, biotechnology and sustainable energy.

India was a prime spot for the location due to the energy, climate change, artificial intelligence and biotechnology studies that align with Rice’s research that is outlined in its strategic plan Momentous: Personalized Scale for Global Impact.

“India’s position as one of the world’s fastest-growing education and technology markets makes it a crucial partner for Rice’s global vision,” vice president for global at Rice Caroline Levander adds. “The U.S.-India relationship, underscored by initiatives like the U.S.-India Initiative on Critical and Emerging Technology, provides fertile ground for educational, technological and research exchanges.”

On November 18, the university hosted a ribbon-cutting ceremony in Bengaluru, India to help launch the project.

“This expansion reflects our commitment to fostering a more interconnected world where education and research transcend borders,” DesRoches says.

UH-backed project secures $3.6M to transform CO2 into sustainable fuel with cutting-edge tech

funds granted

A University of Houston-associated project was selected to receive $3.6 million from the U.S. Department of Energy’s Advanced Research Projects Agency-Energy that aims to transform sustainable fuel production.

Nonprofit research institute SRI is leading the project “Printed Microreactor for Renewable Energy Enabled Fuel Production” or PRIME-Fuel, which will try to develop a modular microreactor technology that converts carbon dioxide into methanol using renewable energy sources with UH contributing research.

“Renewables-to-liquids fuel production has the potential to boost the utility of renewable energy all while helping to lay the groundwork for the Biden-Harris Administration’s goals of creating a clean energy economy,” U.S. Secretary of Energy Jennifer M. Granholm says in an ARPA-E news release.

The project is part of ARPA-E’s $41 million Grid-free Renewable Energy Enabling New Ways to Economical Liquids and Long-term Storage program (or GREENWELLS, for short) that also includes 14 projects to develop technologies that use renewable energy sources to produce sustainable liquid fuels and chemicals, which can be transported and stored similarly to gasoline or oil, according to a news release.

Vemuri Balakotaiah and Praveen Bollini, faculty members of the William A. Brookshire Department of Chemical and Biomolecular Engineering, are co-investigators on the project. Rahul Pandey, is a UH alum, and the senior scientist with SRI and principal investigator on the project.

Teams working on the project will develop systems that use electricity, carbon dioxide and water at renewable energy sites to produce renewable liquid renewable fuels that offer a clean alternative for sectors like transportation. Using cheaper electricity from sources like wind and solar can lower production costs, and create affordable and cleaner long-term energy storage solutions.

Researchers Rahul Pandey, senior scientist with SRI and principal investigator (left), and Praveen Bollini, a University of Houston chemical engineering faculty, are key contributors to the microreactor project. Photo via uh.edu

“As a proud UH graduate, I have always been aware of the strength of the chemical and biomolecular engineering program at UH and kept myself updated on its cutting-edge research,” Pandey says in a news release. “This project had very specific requirements, including expertise in modeling transients in microreactors and the development of high-performance catalysts. The department excelled in both areas. When I reached out to Dr. Bollini and Dr. Bala, they were eager to collaborate, and everything naturally progressed from there.”

The PRIME-Fuel project will use cutting-edge mathematical modeling and SRI’s proprietary Co-Extrusion printing technology to design and manufacture the microreactor with the ability to continue producing methanol even when the renewable energy supply dips as low as 5 percent capacity. Researchers will develop a microreactor prototype capable of producing 30 MJe/day of methanol while meeting energy efficiency and process yield targets over a three-year span. When scaled up to a 100 megawatts electricity capacity plant, it can be capable of producing 225 tons of methanol per day at a lower cost. The researchers predict five years as a “reasonable” timeline of when this can hit the market.

“What we are building here is a prototype or proof of concept for a platform technology, which has diverse applications in the entire energy and chemicals industry,” Pandey continues. “Right now, we are aiming to produce methanol, but this technology can actually be applied to a much broader set of energy carriers and chemicals.”

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This article originally ran on EnergyCapital.

Houston innovator drives collaboration, access to investment with female-focused group

HOUSTON INNOVATORS PODCAST EPISODE 262

After working in technology in her home country of Pakistan, Samina Farid, who was raised in the United States, found her way to Houston in the '70s where business was booming.

She was recruited to work at Houston Natural Gas — a company that would later merge and create Enron — where she rose through the ranks and oversaw systems development for the company before taking on a role running the pipelines.

"When you're in technology, you're always looking for inefficiencies, and you always see areas where you can improve," Farid says on the Houston Innovators Podcast, explaining that she moved on from Enron in the mid-'80s, which was an exciting time for the industry.

"We had these silos of data across the industry, and I felt like we needed to be communicating better, having a good source of data, and making sure we weren't continuing to have the problems we were having," she says. "That was really the seed that got me started in the idea of building a company."

She co-founded Merrick Systems, a software solutions business for managing oil and gas production, with her nephew, and thus began her own entrepreneurial journey. She came to another crossroads in her career after selling that business in 2014 and surviving her own battle with breast cancer.

"I got involved in investing because the guys used to talk about it — there was always men around me," Farid says. "I was curious."

In 2019, she joined an organization called Golden Seeds. Founded in 2005 in New York, the network of angel investors funding female-founded enterprises has grown to around 280 members across eight chapters. Suzan Deison, CEO of the Houston Women's Chamber, was integral in bringing the organization to Houston, and now Farid leads it as head of the Houston Chapter of Golden Seeds.

For Farid, the opportunity for Houston is the national network of investors — both to connect local female founders to potential capital from coast to coast and to give Houston investors deal flow from across the country.

"It was so hard for me to get funding for my own company," Farid says. "Having access to capital was only on the coasts. Software and startups was too risky."

Now, with Golden Seeds, the opportunity is there — and Farid says its an extremely collaborative investor network, working with local organizations like the Houston Angel Network and TiE Houston.

"With angel investing, when we put our money in, we want these companies to succeed," she says."We want more people to see these companies and to invest in them. We're not competing. We want to work with others to help these companies succeed."

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