Houston private equity firm beats target on first investment fund

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The Sallyport Partners Fund focuses on investments in founder- and family-owned businesses, corporate carve-outs and startups in various industries. Photo via Getty Images

Houston-based private equity firm Sallyport has raised $160 million for its first investment fund, exceeding the target amount by $10 million.

The Sallyport Partners Fund focuses primarily on investments in founder- and family-owned businesses, corporate carve-outs and startups in various industries.

The firm’s chairman, Doug Foshee, seeded the fund. He and managing partners Kyle Bethancourt and Ryan Howard started the firm in 2023.

“Sallyport Partners Fund was created to utilize the proven processes our team has developed over time to generate value for like-minded investors on a larger and more impactful scale,” Foshee says in a news release.

Investors in the Sallyport fund include entrepreneurs, business executives and influential Texas families. Aside from Foshee, names of the fund’s investors weren’t disclosed.

“We are deeply committed to working hand-in-hand with management teams to drive transformative growth and generate long-term value,” says Bethancourt. “Our operational capabilities are forged from decades of firsthand experience leading, investing in, and building thriving businesses from the ground up. We have a unique appreciation for the management team’s perspective because we’ve been in their shoes.”

Those shoes have covered some pretty impressive ground:

Foshee is former chairman, president, and CEO of Houston-based El Paso Corp., which owned and operated a 44,000-mile natural gas pipeline network. In 2012, El Paso merged with Houston-based pipeline company Kinder Morgan in a multibillion-dollar deal.
Before Sallyport, Bethancourt was a vice president in the credit division of Blackstone, an investment powerhouse with more than $1 trillion in assets under management. Earlier, he worked at D.E. Shaw & Co., a New York City-based hedge fund with more than $65 billion in assets under management.
Before Sallyport, Howard worked at Platform Partners, a Houston-based private equity firm. Earlier, he worked for the natural resources arm of investment banking giant Goldman Sachs.

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Tim Kopra spent over 244 days in space, and now he's using his tech background to invest in emerging energy companies. Courtesy of Tim Kopra

Former NASA astronaut is investing in the future of the oil and gas industry

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When Tim Kopra returned from space in 2009 after he served as flight engineer on NASA's Expedition 20, he was ready to transition into civilian life. The Army vet went to business school, received his MBA in 2013, and started thinking about his next steps here on earth.

That is, until he was called back by NASA to serve as flight engineer then commander of the ISS in Expedition 46/47. He landed in June of 2016 after spending a career total of 244 days in space.

The timing was right this time around for Kopra. A former classmate of his, Ernst Theodor Sack, had worked at a Riverstone Holdings for a decade and had realized the potential for funding smaller, more niche startups. Sack was ready to branch out on his own, and Kopra was looking for his next career opportunity too.

That's how the two partnered up to create Blue Bear Capital, an investment fund that invests in data-driven technology companies in the energy supply chain.

"You can think of it as Silicon Valley tech, IoT, analytics, machine learning, SaaS business models applied to oil and gas, wind, solar, and energy storage," Kopra says.

The energy industry has been known to be slow to adopt new technology, like analytics, machine learning, and the Internet of Things, Kopra says, but Blue Bear's goal is to find the startups creating cutting edge technology and help them gain a footing in the industry.

"In order to adopt new technology, our view is that it has to be able to demonstrate clear value proposition upfront — not something that promises to improve operations down the line. It needs to happen relatively quickly."

Blue Bear capital closed its fund in the fourth quarter of 2018 with a total of eight investments. Kopra spoke with InnovationMap on how he's merged his space career into a tech investment guru.

InnovationMap: What sort of experience do you bring in to your investment responsibilities from your Army and NASA days?

Tim Kopra: On face value, it may sound like an odd match, taking someone with a tech and operational background and putting them in venture, but quite frankly it feels very familiar to me because my career has really been focused on working on complex technology and operations with very small teams. It's not just a theoretical understanding of the technology, but understanding how to use the technology and how it works.

It's something that over time, when you work with different kinds of aircraft or experiments on the Space Station or the space suits we use on space walks or the robotics system we used, you really develop a strong sense of how we as humans are able to work with technology and improve the functions we have in our jobs. That's a valuable aspect I bring to the table.

There's the operational component too. You can have great technology, but if it's not well matched to its job and implementation, it's not going to have the ability to solve the problems it was intended for. Third component is with small teams. I've worked with teams of two to 10 to 30 to several hundred — you recognize the need for people to work more effectively together.

I was on the last couple of astronaut selection committees. Our most recent one was going through 18,300 and select 12. Our job during the last portion of the selection is interviewing the last 50 or so. Those people competing for those spots are rock solid when it comes to their technical background and operational experience. The one thing we were asking ourselves as the interview committee was, "Who'd you want to go camping with?" It's the matter of the kind of people you can spend time with and be effective with. When we look at companies to invest in, we are looking for good small teams like that.

IM: How has Houston's tech ecosystem changed throughout your career?

TK: When we started in January of 2017, we saw one conference every few months that was involved in innovation and new technology and its application in oil and gas. Whereas now, it's pretty much every month that there's a major event about applying new technology in the industry.

IM: So, how has the city been for you as an investor?

TK: Obviously, Houston is the center for traditional energy and oil and gas. One thing that has been notable over our journey is the increased involvement in corporate venture funds. And, then the number of startups — it's a growing number and there's plenty of room for growth when it comes to energy startups. We've definitely seen an improvement in the types of technology provided and the number of startups emerging.

IM: Do you feel like the relationship you have with corporate VCs is competitive or collaborative?

TK: I think that the environment for venture capital in Houston in particular is very collaborative. When it comes to the corporate VCs, we're aligned because often times they are looking for companies farther along and then secondly, we're happy to co-invest with corporate teams. There are plenty of deals to go around, and we think working together we can definitely succeed.

IM: What types of companies are you looking for?

TK: We consider companies that are early revenue companies. We focus on data-driven technology companies, but they need to have recurring commercial revenue, so not just pilots.

IM: What's next for Blue Bear?

TK: We recently closed the fund, and what that means is we need to deploy the capital. We've invested in eight companies and had one exit, which we are excited about.

What we try to do is find the absolute best in class within a sector in which we invest.

IM: What keeps you up at night, as it pertains to your business?

TK: It's a very dynamic world. We have to keep track of macro trends and understand where the market is going. That has everything to do from the price of oil to government incentives to what large companies are investing in. I wouldn't say that it keeps us awake at night, but there's so many facets of the business that can impact what we do — positively and negatively. But we are constantly keeping track of what's going on in the world and what's going on in our sector.

The one thing we are most focused on right now is maintaining deal flow that we've been able to achieve. Going through the thousand or so companies we have over the past couple of years has been an extremely arduous task, but it's necessary for us to be able to understand the market.

We need to be as diligent as we have been over the past couple years. It's a really exciting space to work in, and we just need to maintain that level of excitement.

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Portions of this interview have been edited.

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Elon Musk's SpaceX is about to make its debut on Wall Street

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Elon Musk's rocket company SpaceX will make its debut on Wall Street Friday, June 12, and both institutional and retail investors are expected to gobble up the 555.6 million shares going up for sale at $135 apiece. Musk, already the world's richest man, could become its first trillionaire.

SpaceX is likely to become the biggest IPO ever, with proceeds of around $75 billion. SpaceX hopes to become the first company to send people to Mars. In fact, part of Musk’s future compensation depends on SpaceX eventually establishing a colony of at least 1 million people on the red planet.

Why SpaceX is going public now

In a video conference on Musk's social media platform X, he told JPMorgan CEO Jamie Dimon that people have suggested for the last 10 years that he take SpaceX public. He's doing it now because the company plans to put 100,000 next-generation Starlink satellites into orbit. Deploying AI data centers in space is a “massive new growth base and you need capital for that,” he said.

Going public provides access to the capital that SpaceX needs. But it also exposes it to more scrutiny from shareholders and more regulatory oversight. That includes filing quarterly financial reports, which critics say incentivizes short-term thinking over longer-term planning and creates unnecessary costs for a company. Securities regulators are currently soliciting public comment on a proposal to require public companies to file the financial reports only twice every year.

How the IPO impacts the company

Musk will hold the majority of a special class of shares, giving him control over decisions related to company strategy, finances and personnel. On the latter, because of his ownership of most of these Class B shares, the only person who can fire Musk as CEO is Musk.

The company credits Musk with being the “driving force” behind its growth, innovation and success. But what happens if Musk is no longer in the picture? SpaceX warns that the loss of Musk could disrupt its ability to execute its strategy as well as hurt its “reputation and relationships with customers, partners and other stakeholders.”

The company also warns that finding a replacement with the same skills and experience as Musk would be time-consuming, if not nearly impossible. As Wedbush Securities analyst Dan Ives wrote Wednesday, “At the end of the day Musk is SpaceX and SpaceX is Musk.”

What could make or break SpaceX

Currently in the test phase, the gigantic reusable Starship rocket is key to SpaceX realizing Musk's ambitions. Much of the commercial space business hinges on SpaceX developing Starship’s capability to be fully reusable and hearty enough for a quick turnaround between flights. If that doesn't happen, SpaceX warns that putting data centers and satellites in space will take longer and cost more money, meaning it risks customers bailing on the company.

Analysts say that by pioneering reusable rockets, SpaceX has established a clear lead on competitors such as Blue Origin, led by Amazon founder Jeff Bezos. The Starlink satellite business competes with, among others, AST SpaceMobile – which is relying on a SpaceX rocket to send its latest generation of satellites into orbit next week.

The prospectus filed last week says SpaceX’s biggest potential market is the sale of business-oriented artificial intelligence products designed to transform how people get work done. It’s an opportunity SpaceX predicts would be worth $22.7 trillion if it could somehow dominate rivals like Anthropic, OpenAI and Microsoft in a highly competitive industry. But the prospectus shows no clear path to profitability for the xAI business, which merged with SpaceX earlier this year.

Why Wall Street is paying attention

If the SpaceX IPO is as successful, the stock could quickly join the Nasdaq 100, a widely followed index that tracks the 100 largest non-financial companies in the composite. That's important because some popular funds, such as the $460 billion QQQ exchange-traded fund, mimic the index and will automatically buy whatever is listed in the index.

Nasdaq recently changed its rules to allow select companies to enter the Nasdaq 100 after just 15 trading days.

S&P Dow Jones Indices, on the other hand, is sticking to established and more traditional thresholds that will not allow SpaceX or other companies with gargantuan IPOs faster entry into its S&P 500 index. That means even high-profile companies will still need to wait for their stocks to trade a full 12 months before they can enter the index.

Companies want to be in the S&P 500 in particular because it's arguably the most important index on Wall Street, with trillions of dollars either mimicking it exactly or benchmarked against it. Vanguard's VOO fund that tracks the S&P 500 has roughly $950 billion invested in it, for example.

NASA unveils Artemis III astronauts at Johnson Space Center in Houston

To the moon

NASA on Tuesday, June 9, revealed the crew for its Artemis III mission, the next step in the space agency's plan to eventually land astronauts on the moon.

The announcement came two months after Artemis II's record-breaking trip around the moon that surpassed the distance record of Apollo 13.

NASA's Randy Bresnik, Frank Rubio, Andre Douglas and the European Space Agency's Luca Parmitano won't fly to the moon or land on the surface. Instead, they’ll orbit Earth while practicing docking their Orion capsule with two lunar landers.

“To the Artemis III crew, we wish you Godspeed on the journey ahead,” said NASA administrator Jared Isaacman.

Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin are racing to deliver the lunar landers. The two-week demo is targeted for 2027. Blue Origin suffered a recent setback when its massive rocket exploded during an engine-firing test on the launch pad in Florida, shaking nearby homes and illuminating the sky with an orange fireball.

NASA's Jeremy Parsons said the setback is a learning opportunity and that the space agency is confident Blue Origin's rocket will be ready in time.

NASA's Artemis program aims to return astronauts to the moon's surface for the first time since the 1970s. A recent revamp of the program announced by Isaacman aims to fast-track it similarly to the Apollo era, adding the upcoming spaceflight around Earth before eyeing a lunar landing in 2028.

“We are certainly humbled as a crew to be able to be your crew that executes this Artemis III mission in space,” said Bresnik, Artemis III commander.

Added Douglas, mission specialist: “My brain — it is going a mile a minute right now. But my heart, it is so warm. It is so full."

In May, NASA awarded hundreds of millions of dollars in contracts to four companies, including Blue Origin, to build landers, rovers and drones for a future moon base. Isaacman said the goal of the moon base is to lay the foundation for a Mars expedition.

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