How this startup leveraged friends and family investment for an oversubscribed round of funding

guest column

COVID-19 might have thrown a wrench in this health tech startup's fundraising plans, but it found a way to close an oversubscribed round anyways. Photo via Getty Images

When I wrote about fundraising early this year, I knew that I would be raising a round shortly, but had no idea I would be doing it in a changed COVID-19 world. I have experienced two unexpected recessions as an entrepreneur — in 2001 and 2008 — and each time causing huge struggles for entrepreneurs to raise funds. That is when I developed the mindset of acting like a desert rat, surviving with little help, learning to tap into the resources around you to survive and even thrive. Little did I know what was coming in March when the COVID-19 shutdown started.

Solenic Medical Inc. is a medical device company developing an innovative non-invasive treatment for infected metallic implants in the body. Using technology invented at the University of Texas Southwestern, Solenic will leverage the unique properties of alternating magnetic fields generated from external coils to eradicate biofilm on the surface of medical implants.

This non-invasive treatment addresses a major complication of various surgeries, such as knee and hip replacements, as well as in trauma related implants such as plates and rods. There are certainly challenges to fundraising for medical device companies, but each technology arena has its own challenges that I won't go into here.

The Solenic Medical team knew we needed to raise a round early this year, building upon the progress achieved since our founding investment in early 2019. The question was what type and size a round to raise.

We knew we were close to taking some valuable steps, but needed a just a little more time and funding to get there, at which point we figured we would be able to step up our valuation greatly. We decided on a modest $500,000 convertible note round, to help us accomplish at least a portion of the following items:

  • Recruit a reputable outside board member
  • Complete a planned large animal study stepping up from previous mice studies
  • Complete submission of a Breakthrough Device application to the FDA
  • Close our $1.3 million NIH grant and/or other non-dilutive funding
  • Fine tune simulation approaches to optimize the transducer design
  • File new intellectual property

We knew that some combination of these would occur in the succeeding months and would make it easier for Solenic to raise further funds.

The first domino was the on-boarding of an experienced technology executive from Virginia to join our board. The large animal study was delayed when the COVID-19 shutdown started, but our Breakthrough application and the grant application review started as the team went into virtual work mode. Progress was made on the simulations and drafting our next patent. The dominos were starting to fall in spite of the shutdown.

My philosophy was to treat the round as five different type of efforts, in pretty much five equal portions.

  • The first 20 percent in a round is always the hardest, even in closely held friends and family round. The first check regardless of size is always hard as often investors very interested in the round will wait for others to move first.
  • The second 20 percent is not much easier, still requiring a leap of faith by the investor.
  • The magic starts happening at 40 percent, where momentum picks up as you approach halfway and beyond.
  • At 60 percent you reach real momentum, where those investors who may have been waiting to move for a while now start moving.
  • At 80 percent you pick up investors who move quickly worried about missing out before the round closes.
  • With luck, you get enough momentum to oversubscribe the round and have to make the call to go beyond your target funds. For a quick hint on where I standard at that point, there's a saying that you never turn down money.

It was strange picking up the fundraising activity via zoom meetings, and it got off to a slow start as the initial circumstances of the new COVID-19 world settled in. Following my own advice from the January article, I started strategizing my communications, who might be the first check and first movers in first 20 percent, then the next 20 percent and so forth. For a friends and family round you start with your board as champions for the round, founders and management. No one is likely to be more committed and likely to get things started generally, much less in unusual financial times like a pandemic shutdown.

With an institutional co-founder like VIC Technology Venture Development and a passionate board we were able to jumpstart the round the round with $110,000 in commitments. This was quickly followed $100,000 from friends and family of board or management team members. Note that "quickly" in a pandemic was three months that in normal times might have taken only a month or so. Now that we had crossed that magic 40 percent hurdle, things started picking up speed, where members of the VIC Investor Network added individual investments totaling $140,000 to pass the next hurdle of 60 percent within another six weeks of individual presentations and discussions.

Momentum accelerated with friends and family and management team members stepping up to get us to 80 percent within few weeks. At the time of this article we are over-subscribed with more decisions to come. That is a great problem to have as things really picked up speed recently.

Though the final tally is to be determined the mix for this friends and family round looks to be pretty typical to past experiences

  • Board & Management – 27 percent
  • Family – 27 percent
  • Friends – 22 percent
  • Others – 25 percent

Because of the shutdown, this pandemic round has been unusual and at times frustrating, with some highly vocal and interested prospects going strangely silent as soon as the shutdown started, while others moved more slowly than originally expected. Regardless of how things transpired, it turned out largely familiar. As usual, the people you know the best and that know and trust you the most are the ones that are mostly likely come through for you. Building your network to increase the size of that pool is what you do far before a round starts.

Later rounds will be quite different, but the same 20 percent momentum stages will apply. It's a matter of building and nurturing a network of prospects in advance. Larger rounds involve an "institutional" friends and family network that you have known for a while. That work begins long before you start developing them as prospect for an open investment round. By the time this article is published, we expect to have the final funds of this round in the bank but have already started building relationships for the next round. It never stops, but in some ways that is the fun part of it to meet new people to share your startup's story.

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James Y. Lancaster is the Texas branch manager for Arkansas-based VIC Technology Venture Development and interim CEO for Solenic Medical. Lancaster, who lives in College Station, oversees business there, in Dallas, and in Houston.

This week's Houston innovators to know roundup includes Harvin Moore, James Lancaster, and Joshua Baer. Courtesy photos

3 Houston innovators to know this week

who's who

Today starts the Houston Tech Rodeo — a week full of innovation-focused events — and its sure to corral entrepreneurs and investors across the city spur discussions of innovation and technology.

This week's Houston innovators to know includes the man at the helm of the organization behind the Tech Rodeo, plus two investors that are making moves in Houston as well as statewide.

Harvin Moore, president of Houston Exponential

Courtesy of HX

Houston Exponential has helped to coordinate over 30 innovation-focused events for the inaugural Houston Tech Rodeo, which will take place March 2 to 6 — in coordination with the start of the Houston Livestock Show And Rodeo — and will feature panels about diversity, reverse pitch events with startups and accelerators, on-stage office hours, and more.

"Really one of the things that makes a tech ecosystem like Houston really work and purr is when people get together, and people are able to bump into each other and bounce ideas off each other. Businesses do well, ideas thrive, and things happen," Harvin Moore, president of HX, says on the Houston Innovators Podcast. "We basically saw this as an opportunity to let the startup development organizations in town schedule their events around a particular week that really look good on a calendar."

Click here to read more and stream the episode.

James Y. Lancaster, Texas branch manager for Arkansas-based VIC Technology Venture Development

Courtesy of VIC

James Lancaster, Texas branch manager for Arkansas-based VIC Technology Venture Development, knows most startups fail for one of three reasons — no market need, running out of money, and not having a strong team. In his most recent guest article for InnovationMap, Lancaster dives into this third reason with key things founders must think about to give their startup the best shot at success.

"Like market need, evaluating the management team is on virtually every venture capitalist's list of what they look for in their target investments and you need to get it right," Lancaster says.

Click here to read more.

Joshua Baer, founder and CEO of Capital Factory

Courtesy of Capital Factory

While not technically a Houstonian, this Austinite gets an honorary title for his work here. Austin-based accelerator and investment organization Capital Factory recently merged with Station Houston, and CEO and Founder Joshua Baer says it's just the beginning of his focus on Houston startups.

"In total right now, we have 40 companies ever that have joined our accelerator from Houston, which is still a pretty significant number," he tells InnovationMap. "This year, we expect more than 40 companies to join the accelerator from Houston."

Click here to read more.Click here to read more.

Teamwork can make the dream work, but lack of a solid team can be a startup's downfall. Pexels

Here's what Houston startups need to keep in mind when building their teams

Guest column

The top two reasons for startup failure are no market need and running out of money, respectively. But the third reason for failure is not having the right team in place. Like market need, evaluating the management team is on virtually every venture capitalist's list of what they look for in their target investments and you need to get it right.

It is well known that new technologies have a limited window of opportunity to succeed and there are rarely second chances, whether choosing the right strategy, market, customers, partners, or raising rounds of financing. If a particular window is missed a chance to pivot may be available, but that typically requires a good, experienced and nimble team that is right for the overall opportunity.

Luck and timing are factors largely out of your control in a startup, but good-to-great teams are capable of dealing with fast changing conditions or lessons learned along the way.

There's not one "right team"

It is easy to say you need the right team, but the same team is not the right team for every startup. Any team needs some basic skills, and of course have the ability to deliver a solution to meet its customer's needs.

In addition to a diverse technical team, a startup needs different skill sets, including various business, professional and soft skills. It is obvious that software is different than medical devices, but within "software" there are a wide variety of skills needed from user interface to security and everything in between. Within medical devices, the variety ranges beyond technology from working with the FDA to medical reimbursement.

Similarities between standard business processes like customer billing, collections and capital asset management often do not vary much across some otherwise pretty diverse businesses. On top of that, the needs of the team change over time as startups progress from concept, to prototype development to launch and through growth phases.

Having experience with many different startups, I have had some recurring team members with whom I worked with again in my next venture. I have also experienced significant turnover of individuals and growth within individuals that where ready for a new challenge to keep them motivated. The right team varies from venture to venture.

Know your industry

One lesson is to have a few cornerstone roles in the organization. First learned in my consulting days, a talented team member might serve in a kind of cornerstone role where you know that job is "solved" and you will not have to worry about it. You then complement and build around him, adding more experience in a complementary role if the first individual has raw talent and enthusiasm. You would add young talent with plenty of room for growth around an experienced individual that has the ability to mentor those around them. No one way exists to create a good team, other than the best practice of mixing experience, talent and diversity in creative ways based on who based on availability.

However, patterns should be identified and assessed to complement customers when deep engagement is a key part of your model or with partners, distributors, channels, or other strategic parts of your extended business model. Some customers will accept less experienced staff; others will not. Some markets can be targeted successfully by inexperienced sales or customer service representatives, while others require field experience or at a minimum extensive targeted training.

Finding support

Beyond patterns, consider some other best practices that are appropriate for various markets; for example, the risk incurred by having an inexperienced FDA process lead in an FDA regulated product. Having little real experience with FDIC, SEC or similar relevant federal or state agencies creates a lot of risk in FinTech companies. In any startup, some areas can be easily contracted out while others need to be core internal strengths, even if developed over time.

That last word is key, the "time" component of startups. Early stages of a startup have parallels to my consulting days. It is a project that is managed like any other project, balancing the big three assets: resources, money and time. Any project is a balancing act of acquiring and managing those three assets, at least when you take out administrative details like payroll and the like. The next stage is more operational in nature, whether stabilizing operations or managing for growth, but it is common for a startup to have two or more CEOs between founding and exit as needs change.

Since VIC primarily is focused on university technology startups, the inventor is often a university researcher with decades of experience in the field of the invention. We follow a best practice of bringing in one of our senior team members as CEO, an experienced business savvy entrepreneur who complements the inventor well in those early technology de-risking phases.

We support those key team members with a shared service team to handle finance, accounting, legal, websites and more, outsourcing specific areas of expertise like intellectual property in a given technical area. We then fill out gaps with select hires. Over time, we work ourselves out of a job when the technology has progressed to a point that different skills are needed, such as handing off to a growth-stage CEO.

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James Y. Lancaster is the Texas branch manager for Arkansas-based VIC Technology Venture Development. Lancaster, who lives in College Station, oversees business there, in Dallas, and in Houston.

This week's innovators to know are focused on bringing startup programming and venture capital to Houston. Courtesy photos

3 Houston innovators to know this week

who's who

This past week has been full of exciting innovation news in Houston — from big fundraising round closings to a new unicorn coming out of the Bayou City.

Houston innovators to know this week include a new program director for Houston's newest startup accelerator, a venture capital fund leader, and more.

Eléonore Cluzel, program director of gBETA Houston program as director

Courtesy of gBETA Houston

Houston's newest accelerator program, gBETA, named its new local leader. Eléonore Cluzel will lead the gBETA Houston program as director, and will be the point person for the program in the region for the two annual cohorts. Previously, Cluzel worked for Business France mentoring French startups and small businesses. In her new position, she says she's excited to support founders across all industries and foster innovation.

"We're adding another resource for local founders to grow their startups and to raise money, and not have to move to Silicon Valley to do it," she says. "We will also serve as a connector, introducing founders to mentors and investors within the community and across gener8tor broader network." Click here to read more.

Sandy Wallis, managing director of the HX Venture Fund

Courtesy of Sandy Wallis

After 20 years in the venture capital world, Sandy Guitar Wallis has seen the evolution of investing — on both coasts and here in Houston as well. Now, as managing director of the HX Venture Fund, Wallis leads the fund of funds that's investing in VCs around the country in order to bring investment to Houston.

"We have raised a fund of funds with the HX Venture Fund, and we're deploying that capital across probably 10 venture capital funds over time," Wallis explains on the most recent episode of the Houston Innovators Podcast. "Each one of those funds, will invest in 15 to 20 underlying private companies. So, at the end of the day, HX Venture Fund 1 will have exposure to 10 VC funds, as an example, and — by virtue of those investments — maybe 300 private companies." Click here to read more.

James Y. Lancaster, Texas branch manager for Arkansas-based VIC Technology Venture Development

Photo courtesy of VIC

Startups fail — and there are a number of reasons why that is. James Y. Lancaster, who serves as Texas branch manager for Arkansas-based VIC Technology Venture Development, writes in a guest column for InnovationMap about the second most common reason for startup failure: funding.

"A key part of the startup CEO's job is to understand how much total cash remains on hand and whether it is enough to carry the startup towards a milestone that can lead to successful financing as well as a positive cash flow," Lancaster writes. "Just as important is how to allocate their time and efforts to the fundraising process along the way." Click here to read more.

The second most common reason for startup failure is running out of funds. A Texas expert has tips for avoiding that downfall. Getty Images

Failing to fundraise can be the downfall of Houston startups — here's what you need to know

Guest column

Startups are pulling outsized financing rounds and debt acquisitions at an unprecedented rate despite the high 80 percent failure rate of startups overall. Among the three primary reasons why startups tend to fail, running out of cash falls in the number two spot on the list at 29 percent — following no market need.

But startups need to recognize that their time and a strategic fundraising effort are tied together as critical resources to allocate properly to drive their fundraising efforts.

Despite a multitude of ideas and approaches in the pursuit of the very elusive product-market fit and monetization, the majority of startups fail to raise funds or run out of cash after initial fundraising success. For the startup to be successful, it is imperative that funds, finances, and related resources are allocated productively and precisely.

A key part of the startup CEO's job is to understand how much total cash remains on hand and whether it is enough to carry the startup towards a milestone that can lead to successful financing as well as a positive cash flow. Just as important is how to allocate their time and efforts to the fundraising process along the way.

A constant battle

For starters, valuations of a startup do not change linearly over time. Simply because it was twelve months since raising a series A round does not mean that it will be easier to raise more money or be ready for a step-up in valuation. To reach an increase in valuation, a company must achieve certain key milestones that are relevant to showing progress to market and in most investors eye's progress towards monetization.

It is important to understand what potential investors think is worthy of a step up, but generally valuation is pretty flat in between inflection points where key milestones are reached that earn a big increase.

Active vs. passive investment pursuits

Given that it often takes six to nine months and two-thirds of a CEO's time during a major round of fundraising, optimally you should align progress points into major milestones where efforts can be concentrated for fundraising success approaching the inflection points. That does not mean that the CEO can ignore fundraising in between those major milestones, but should think about waves of active and passive fundraising activities.

Active fundraising is obvious, which is the typical efforts to craft a pitch, meet with investors, nurture investor prospects into lead and following investor types. Most of the effort should be put into the early investors that will lead the round as the first checks are always the hardest.

From my experience rounds develop their own momentum when reaching about 40 percent of their target and even more when reaching 60 percent as long as the prospective investor pool is large enough. However, the CEO cannot ignore the company's progress while the raise is actively underway, as they will typically meet with prospective investors multiple times who will want to hear about progress each time.

Passive fundraising is less obvious, which happens in the gaps in between active fundraising where one round closes and before the next round starts. The primary passive activity is general investor networking, where the CEO should be out expanding their network, meeting new prospects and trying to identify the mostly likely early investors or best fit for the company.

I'm not suggesting this is really a passive activity, as it takes a lot of work. But this should be an ongoing between rounds. This passive effort gives the CEO a chance to put most of their emphasis on the progress of the company to the next milestones, but avoids a cold start to the next fundraising round.

Regardless, there are two best practices in this passive mode. First, use networking techniques to identify good prospective investors for your company and two to work on getting referrals to investors well before an actual fundraising round is open. Getting a referral is obviously to your advantage, because it takes you out of cold-calling mode that has a low success rate.

Meeting an investor while you are not fundraising takes the pressure off both the CEO and investor and gives them a chance to get to know each other personally. Again, many will not be your round leaders or champions to other investors, but this lower pressure effort gives investors a chance to listen and reach out to potential experts in their networks to validate the problem and your solution.

With the relationship established and your solution validation received, moving to an active discussion about investment comes more naturally as well as targeting of the best lead investor candidates leading to due diligence, negotiation and closing the funds.

Within a technology development firm like my firm, VIC, we have the benefit of "always-on" VIC Investor Network that we are constantly working to refresh and expand. Because of our large portfolio, seventeen companies at the time of writing this, there is a good chance that almost any life science investor can find something that suits their interest, experience, or passions.

Each member of the firm can allocate their time between active and passive efforts for the companies they are most closely involved with while still providing a wide portfolio of other companies that might be of interest to a prospective investor. Even with a portfolio of companies, the same concepts of active and passive efforts apply.

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James Y. Lancaster is the Texas branch manager for Arkansas-based VIC Technology Venture Development. Lancaster, who lives in College Station, oversees business there, in Dallas, and in Houston.

This week's top innovation stories include a new coworking space announce its plan to pop up in East Downtown. Courtesy of Common Desk

5 most popular innovation stories in Houston this week

What's trending

Editor's note: Halloweek was a scary one for Houston baseball, but the innovation world fared just fine. A Texas coworking company announced plans for a Houston location, innovators to know, The Cannon Houston's grand opening, and more top news from this week.

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Houston ranks among world’s top 30 emerging startup ecosystems

Startup Status

Long known as the Energy Capital of the World, Houston also ranks among the world’s top 30 emerging startup ecosystems, according to a new report.

The report from Startup Genome, a research and advisory organization, doesn’t assign a specific numeric ranking to Houston’s startup ecosystem. Rather, it puts Houston in the ranking range of 21 to 30 for emerging ecosystems. Startup Genome weighed factors such as early-stage funding, performance and talent to identify the top emerging ecosystems.

Houston also gained notice for being one of the world’s 20 emerging ecosystems with at least four unicorn startups in the past 10 years. Houston and nine other ecosystems each had four unicorns.

According to StartupBlink, a startup research platform, Houston’s startup ecosystem grew 24 percent in 2025, with over 1,300 startups and total startup funding exceeding $808 million. StartupBlink places Houston at No. 46 among the world’s top 100 startup ecosystems.

In a recent post on LinkedIn, David Horsup, executive in residence at the Rice Alliance Clean Energy Accelerator, wrote that Houston “has all the ingredients to be wildly successful if it stays true to its differentiated pillars that drive the economy — energy, medical, and aerospace.”

Mumbai topped Startup Genome’s list of emerging ecosystems, followed by Istanbul, Madrid, Salt Lake City-Provo and Barcelona. After Salt Lake City-Provo, the top U.S. ecosystems were Phoenix, Detroit, Minneapolis and Las Vegas.

Silicon Valley led Startup Genome’s ranking of the world’s top established ecosystems, followed by New York City, London, Tel Aviv and Boston. Austin landed at No. 18 in this category and Dallas at No. 27.

“For much of the past decade, this report has chronicled the welcome dispersion of opportunity beyond the traditional hubs,” Startup Genome writes. “That trend has not died — but it has been complicated. Capital and scale are consolidating once more, particularly in the United States, and the gap between leading and emerging ecosystems is widening.”

KBR names C-suite duo to lead $5.3B government services spinoff

new leaders

In advance of the spinoff of its Mission Technology Solutions unit, Houston-based KBR has made two C-suite hires for the new business.

Michael LaRouche is coming aboard as president and CEO of the spinoff, currently called SpinCo, on Sept. 26. Nicholas Veasey is joining as executive vice president and chief financial officer on July 1.

“Michael and Nick bring a highly complementary combination of operational leadership, financial expertise, and mission-driven experience, and together they will accelerate our impact for stakeholders,” Stuart Bradie, chairman, president and CEO of publicly traded KBR, said in a news release.

LaRouche currently is CEO of Serco North America, a Herndon, Virginia-based government services contractor. Veasey most recently was CFO of MAG Aerospace, a Fairfax, Virginia-based defense contractor.

SpinCo, a government services contractor, will launch with more than $5.3 billion in annual revenue and 20,000 employees. KBR’s total headcount is around 36,000. Branding for SpinCo, including a formal name, will be revealed in July.

“SpinCo is positioned as a top-tier provider of differentiated technology solutions, anchored by deep mission expertise, global scale, and a relentless commitment to delivering for our customers,” LaRouche says.

After the spinoff, the slimmed-down KBR will focus on its Sustainable Technology Solutions business, a provider of energy and industrial technology that generated $2.5 billion in revenue in 2025. Bradie will remain chairman, president and CEO of the business.

Both SpinCo and the new KBR will be public companies. The spinoff is scheduled to be completed in January.

Experts: Houston's VC ecosystem has set the foundation — now we need scale

guest column

Fervo Energy went public earlier this summer. The Houston geothermal company priced its IPO at $27 per share, raised $1.89 billion, and opened the next morning at a market capitalization north of $10 billion. By most measures, it is the largest venture-backed cleantech IPO in history and an unambiguous win for Houston. It’s also a useful moment to look at where Houston's venture ecosystem stands and where it can go. The highlight: Houston's venture ecosystem has real foundations and, with increased company formation activity, can grow into the scale our city's ambitions deserve.

A Houston energy story in the national recovery

The recent uptick in Houston venture activity follows national trends. U.S. venture deal count contracted roughly 22 percent from its 2021 peak through 2024 before rebounding to about 16,700 rounds in 2025. Houston's 23 percent increase in VC funding from 2023 to 2024 is part of a national recovery of comparable magnitude over the same time window.

The energy sector is where Houston exhibits unique trends—and where the story turns clearly positive. (Houston's strong health and space sectors deserve their own separate consideration.) By deal count, energy-related rounds have accounted for 15 to 20 percent of Houston activity, roughly consistent over the past few years.

By capital, energy's share surged from about 14 percent in 2023 to over 60 percent in 2025, driven by a small number of large Houston-headquartered rounds, primarily in geothermal and related technologies. Fervo is the obvious anchor, but Sage Geosystems, Quaise Energy, Zeta Energy, Vaulted Deep, Applied Carbon and Mariana Minerals have all closed meaningful rounds. Houston is concentrated and accelerating as an energy capital market, an invaluable position to build upon.

From foundation to scale

The institutional pieces are in place. Greentown Labs, Activate, the Ion and others have built sector-specialized infrastructure most cities would struggle to assemble. Fervo itself is an alum of both Activate and Greentown Labs. Mercury Fund closed its $160 million Fund V, its largest ever. Houston Angel Network, GOOSE Capital, Fathom Fund, and broader pre-seed and seed capital coverage are here. The Houston $10 million-plus Series A list now includes 40 rounds since 2021, which break roughly into two eras. While 2021 to 2022 was biotech-heavy, with companies like Sporos Bioventures, RadioMedix, Cellenkos and Coya Therapeutics, 2024 to 2025 has tilted clearly toward energy, climate, and critical minerals, with Vaulted Deep, Applied Carbon, Mariana Minerals, Sage Geosystems and Ignis H2 Energy among them.

What’s less developed is the volume of seed-stage companies flowing into that capital. Imagine a dozen more Fervos coming out of that infrastructure over the next decade, each generating jobs, recycled founder capital, and the next wave of operators and angel investors. That is the kind of opportunity Houston has within reach if we build the company-formation pipeline to feed it. To be relevant on the national stage as a venture market, and to drive an economy the size of Houston's into the 2030s, the city needs to be doing closer to 20 Series A rounds per month rather than per year. That throughput implies roughly 1,000 seed rounds per year, feeding the funnel at a 20 percent to 30 percent graduation rate. Reaching such throughput depends on how many new founders Houston produces and how quickly our innovation ecosystem can help them achieve lift-off.

Houston in context

The comparative picture brings the scaling challenge into focus. Between 2021 and 2024, Houston-area startups closed between 126 and 153 disclosed venture rounds per year, against a national count between 9,854 and 14,125. That places Houston at a little over 1 percent of the U.S. deal count. For comparison, Austin ran about three times Houston's deal count each year.

At the Series A level, Houston closed between 12 and 24 rounds in any given year. The median Houston Series A across the period was about $10.7 million, compared with $15.4 million in San Francisco. Houston founders are raising fewer and smaller Series A rounds than founders in peer metros, which points directly to where Houston has the most room to grow.

The unicorn picture tells the same story. From 2021 through 2025, the U.S. produced 590 venture-backed unicorns. Four were Houston-based: Solugen and Axiom Space in 2021, Cart.com in 2023, and Fervo Energy in 2024. Adding HighRadius from 2020 brings Houston's all-time total to five. Austin added 19 over the same five-year window. The path from here is to make Houston's entries on lists like these less the exception and more the rule.

Where this leads

Houston has a real opportunity to become the deepest, most credible energy and climate capital market in the country, with the company formation, talent and operator density to support it. The data shows the foundation is already in place. Fervo, Solugen and the growing roster of energy-adjacent Series A graduates are proof. Fervo's IPO is the first of what should be many. Houston has not had a venture-backed cleantech liquidity event of this scale before, and the city now has one to reference, recruit against and build on. With increased company formation at the seed and pre-seed stages, a Fervo-scale outcome need not be a generational event in Houston, but instead, it can become part of a chain reaction powering the city's economy.

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Stephanie T. Schmidt, PhD, is the founder of a stealth startup, a Venture Fellow at Energy Transition Ventures, and an Executive MBA candidate at Rice University's Jones Graduate School of Business. Lawson Gow is the Chief Operating Officer of Greentown Labs. The full Houston VC landscape report is available at Energy Transition Ventures and CleanTech.Org.

Sources: Crunchbase, PitchBook-NVCA, Carta
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