From friends and family rounds to how to navigate a seed round, here's what you need to know about raising money in Texas. Getty Images

In the vast majority of startups we've worked with across Texas, their "seed round" is not the first money in the door. That money is often called a "Friends & Family Round" and it's usually from people so close to the entrepreneurs that they are willing to take a gamble before there is really even much "there" to invest in. It also might include bootstrap funds put in by the entrepreneurs themselves.

After an F&F Round, Texas startups will pursue a "seed round," which generally includes some angel investors in the local and broader ecosystem. A problem we occasionally run into is that Texas entrepreneurs, including those in Houston, will get bad advice on what the right structures are for this kind of deal; either because they are reading a blog post from Silicon Valley (where things work VERY differently) or they're talking to someone marketing themselves as an "adviser" when their advice doesn't have much substantive deal experience backing it.

If your seed round is under $1 million, you will most likely structure it as a convertible note with a valuation cap and a 2 to 3 year maturity. Convertible notes are extremely slimmed down investment instruments that angel investors across Texas will be very familiar with. Usually, the "deal" in a convertible note round is that investors will get minimal up-front rights, in order to streamline early decision-making and keep legal costs down for negotiation, but they will get back-end protections like debt treatment if the company goes south. They will also almost always get a valuation cap and/or a discount on the price that future VCs pay, as recognition for the extra risk the seed investors are taking relative to later investors.

Once seed rounds get above $1 million, a more robust equity (stock) based investment structure starts to make more sense. There are two types of equity rounds, broadly speaking: seed equity and full VC-style equity. The latter involves a large set of heavily negotiated documents with robust investor protections, and is the structure most often utilized for a Series A (after seed). The former (seed equity) is a slimmed down version of full VC docs designed to give investors some rights, but keep negotiation costs (including legal fees) within a range that's reasonable for the smaller amount of money being raised. Investors vary as to whether they will accept simpler seed equity docs, or require you to give them full VC-style protections.

Given the diversity of investor expectations and contexts you're likely to run into in structuring a seed round, and the very high-stakes (and permanent) implications of the contracts you're going to sign, it's extremely important that advisers you work with have specialized experience in these kinds of deals.

In the case of lawyers specifically, it's also extremely important that they not have conflicts of interest with the investors you are raising money from. We too often see clever investors nudge entrepreneurs toward utilizing the investor's preferred law firm. Anyone with an ounce of honesty and experience can see why that's a problem.

Make sure you understand the high-level concepts and structures that are within the norms of your startup ecosystem, and then work with experienced, trustworthy advisors to translate everything into a deal that makes sense for your company's unique context.

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Jose Ancer is an emerging companies partner at Egan Nelson LLP. He also writes for Silicon Hills Lawyer, an internationally recognized startup/vc law blog focused on entrepreneurs located outside of Silicon Valley, including Texas.

You need a specialized lawyer for your startup — but that's easier said than done in Houston, according to this expert. Getty Images

Lawyers specializing in startups are hard to comeby in Houston — but here's what you need to know

Guest column

One of the worst, and most expensive, mistakes that we see startup founders make in the very early days of their company is not realizing that hiring lawyers is a lot like hiring doctors: when the stakes are high, you need a highly experienced specialist.

Law has numerous specialties and sub-specialties, and hiring legal counsel with the wrong specialty can mean paying to reinvent the wheel, or simply getting advice that is out of sync with the norms of your industry and the expectations of your seasoned investors.

This challenge can be particularly acute for founders of startups located in Houston. The legal market in any particular city tends to mirror the dominant industries of that city. Houston has some of the world's most prominent energy and healthcare lawyers, for reasons that should be obvious to anyone who knows anything about Houston's economy.

Startup lawyers, or more formally —corporate/securities lawyers who are sub-specialized in "emerging companies" — are a different story entirely. Given the nascent status of Houston's startup ecosystem, finding local lawyers who work with emerging technology companies and early-stage funding day in and day out, and know all the norms and nuances, is a challenge.

Very often we see founders get referred to a local lawyer who is a broad generalist that dabbles lightly in many practice areas. Their lack of depth in startup or venture capital work usually leads to clients paying for things that a more specialized lawyer, with a deeper set of precedent forms and institutional knowledge, could simply pull off the shelf. In other cases, founders get referred to very expensive senior corporate lawyers from firms designed for billion-dollar public company representation; totally overkill (and overpriced) for an early-stage startup.

What the smartest Houston founders discover, if they do their homework, is that leveraging the broader "Texas ecosystem" can help not just with sourcing talent for their employee roster or finding venture capital, but with sourcing specialized legal talent as well. In the case of Startup Lawyers, Austin's venture capital and startup ecosystem has produced numerous highly specialized lawyers whose depth of startup/vc experience easily compares with lawyers found in Silicon Valley, but who also regularly interact with investors in the Houston market; and therefore know their expectations. In the case of our firm, Egan Nelson (E/N), a significant number of our clients are located in Houston, Dallas, San Antonio, and other markets in the general regional area.

Historically, businesspeople have assumed that if they really want top-tier, highly specialized counsel, they had to find that counsel at large, multi-national law firms. That is no longer the case. The broader Texas ecosystem has produced a thriving group of specialized, high-end "boutique" law firms that are recruiting top-tier lawyers away from the traditional mega-firms, and leveraging technology to deliver "leaner" legal counsel; saving hundreds of dollars per hour for entrepreneurs.

It is not uncommon for us to see Houston startups utilizing an emerging companies corporate lawyer in Austin, a regulatory specialist lawyer in Houston, and a tax lawyer in Dallas; all from different firms. This is the future for how emerging companies will source their legal talent, without the constraints of geography or old-fashioned "all in one" law firm structures.

This trend really isn't that new. VCs from Austin and other Texas cities (and the coasts) have regularly been visiting Houston to fund companies, and Houston companies have regularly leveraged contacts in other markets to source specialized resources for their companies. The same dynamics have extended to finding legal counsel. "Localism," and an over-preoccupation with hiring everyone in the same city, isn't really just last year, it's more like last century. There is nothing about legal services for startups that requires any of your lawyers to be within your same city. Videoconferencing works great.

The growth of the Texas ecosystem, and the emergence of specialized boutique law firms, mean that Houston entrepreneurs have far more options to choose from for sourcing specialized legal counsel. Leverage those options to avoid engaging lawyers who are insufficiently experienced, or overkill, for the needs of your company. For more resources on finding and assessing the right lawyers for your Houston startup, see Startup Lawyers, Explained.

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Jose Ancer is an Emerging Companies Partner at Egan Nelson LLP. He also writes for Silicon Hills Lawyer, an internationally recognized startup/vc law blog focused on entrepreneurs located outside of Silicon Valley, including Texas.

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Rice University MBA programs rank among top 5 in prestigious annual report

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Rice University’s Jones Graduate School of Business MBA programs have been ranked among the top five in the country again in The Princeton Review’s 2025 Best Business Schools rankings.

The university's MBA program in finance earned a No. 3 ranking, climbing up two spots from its 2024 ranking. Finance MBA programs at the University of Virginia's Darden Graduate School of Business and New York University's Leonard N. Stern School of Business were the only ones to outrank Rice, claiming No. 2 and No. 1 spots, respectively.

Rice's online MBA program was ranked No. 5, compared to No. 4 last year. Indiana University's Bloomington Kelley School of Business' online program claimed the top spot.

“These rankings reflect the commitment of our faculty and staff, the drive and talent of our students and the strong support of our alumni and partners,” Peter Rodriguez, dean of Rice Business, said in a news release. “They are exceptional honors but also reminders — not just of our top-tier programs and world-class faculty and students but of our broader impact on the future of business education.”

Rice also ranked at No. 6 for “greatest resources for minority students."

The Princeton Review’s 2025 business school rankings are based on data from surveys of administrators at 244 business schools as well as surveys of 22,800 students enrolled in the schools’ MBA programs during the previous three academic years.

"The schools that made our lists for 2025 share four characteristics that inform our criteria for designating them as 'best': excellent academics, robust experiential learning components, outstanding career services, and positive feedback about them from enrolled students we surveyed," Rob Franek, The Princeton Review's editor-in-chief, said in a press release. "No b-school is best overall or best for all students, but to all students considering earning an MBA, we highly recommend these b-schools and salute them for their impressive programs."

Rice's finance program has ranked in the top 10 for eight consecutive years, and its online MBA has ranked in the top five for four years.

Rice and the University of Houston also claimed top marks on the Princeton Review's entrepreneurship rankings. Rice ranks as No. 1 on the Top 50 Entrepreneurship: Grad list, and the University of Houston ranked No. 1 on Top 50 Entrepreneurship: Ugrad. Read more here.

Houston named ‘star’ metro for artificial intelligence in new report

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A new report declares Houston one of the country’s 28 “star” hubs for artificial intelligence.

The Houston metro area appears at No. 16 in the Brookings Institution’s ranking of metros that are AI “stars.” The metro areas earned star status based on data from three AI buckets: talent, innovation and adoption. Only two places, the San Francisco Bay Area and Silicon Valley, made Brookings’ “superstar” list.

According to Brookings, the Houston area had 11,369 job postings in 2024 that sought candidates with AI skills, 210 AI startups (based on Crunchbase data from 2014 to 2024), and 113 venture capital deals for AI startups (based on PitchBook data from 2023 to 2024).

A number of developments are boosting Houston’s AI profile, such as:

Brookings also named Texas’s three other major metros as AI stars:

  • No. 11 Austin
  • No. 13 Dallas-Fort Worth
  • No. 40 San Antonio

Brookings said star metros like Houston “are bridging the gap” between the two superstar regions and the rest of the country. In 2025, the 28 star metros made up 46 percent of the country’s metro-area employment but 54 percent of AI job postings. Across the 28 metros, the number of AI job postings soared 139 percent between 2018 and 2025, according to Brookings.

Around the country, dozens of metros fell into three other categories on Brookings’ AI list: “emerging centers” (14 metros), “focused movers” (29 metros) and “nascent adopters” (79 metros).