Capital Factory's Houston HQ will be in The Ion. Photo courtesy of The Ion

A company that supports entrepreneurship and startups across the Lone Star State with mentorship and funding has announced its new homebase in Houston.

Capital Factory has revealed a new programming partnership with The Ion. Through the collaboration, Capital Factory will host programming, events, and resources within the innovation hub to grow, educate, and support Houston-based startups and entrepreneurs.

"Capital Factory's presence at The Ion will further expand the opportunities for startups and innovators in the Houston region, while strengthening an important pillar of the Texas Startup Manifesto," says Joshua Baer, founder and CEO of Capital Factory, in a news release.

Capital Factory was founded in Austin in 2009 and boosts on being the most active investor in Texas, deploying smaller investments to a multitude of early-stage startups. According to Crunchbase's data, the entity has invested in over 160 companies with 20 exits. Capital Factory officially entered the Houston market in 2019 and doubled down its presence last year when it merged with Station Houston.

Now, with its Houston headquarters moving into The Ion, the two innovation partners will take an inclusive approach to creating connections between innovators, mentors, investors, and markets, per the release.

"We are thrilled to have Capital Factory as a programming partner at The Ion" says Jan E. Odegard, executive director of The Ion, in the release. "The Ion seeks to work with key partners and established brands to help build a rich and inclusive set of startup services that can support all innovators and startups wherever they are in their entrepreneurial journey. Capital Factory brings a proven track record for providing entrepreneurs with services and investments that brings great value not only to The Ion ecosystem, but also to the entire Houston innovation ecosystem."

Capital Factory's first event at The Ion will be Open Coffee on November 16th followed by Open Coworking all day, Baer adds in his statement.

Houston-based DonateStock is $50,000 richer after claiming a recent pitch competition win. Photo via donatestock.com

Houston fintech startup snags Capital Factory's $50,000 pitch investment prize

winner, winner

Capital Factory, one of the most active startup investors with a presence across Texas, recently hosted a virtual pitch competition — and one Houston startup took home the big prize.

As a part of the Houston Tech Rodeo, Capital Factory hosted its $50K Houston Investment Challenge with five finalists — DonateStock, Elastique, Elemental Coatings, M&S Biotics, and ScalaMed. The panel of judges included Andy Cloyd, vice president of Revolution; Aleece Hobson, venture partner at HX Venture Fund; and Juliana Garaizar launch director of Greentown Labs.

DonateStock, a tech-enabled tool that automates the stock donation process, took home the big win. Steve Latham, founder and chairman of DonateStock, presented the company's pitch and explained how the tool has the potential to unlock $100 billion for nonprofits.

"A lot of people aren't aware about the benefits of donating stock," Latham explains. "If you're sitting on stock that you've owned or several years that's appreciated quite a bit. If you sell it, you pay capital gains tax — anywhere from 15 to 30 percent. If you donate it, you avoid the tax and you get a big write off, you can deduct the full market value of the donated stock."

He goes on to explain how only 2 percent of people donate stock — and its due to the archaic process that it takes. DonateStock's platform optimizes the education of donors, the connection of nonprofits to new donors, and the simplification of the process. What used to take hours now takes just 10 minutes, Latham says.

Nonprofits get a free page, free customer support, and there is no fee to be on the platform, and DonateStock makes a 2 percent transaction fee. The company already has 40 nonprofits on the platform, and over 70 in the queue to sign up. The goal, Latham says, is to have 900 organizations online by the end of the year. He's already seen a lot of interest in light of the pandemic.

"This is the time to solve this problem," Latham says. "If you have friends at nonprofits or charities, you know what the pandemic did to giving programs. They've all been devastated and they have gotta find new ways to diversify and grow their revenue."

DonateStock anticipates a seed round later this year. It's the third startup Latham has worked on with his co-founder.

"We see a path to building a billion-dollar company over the next five years while impacting millions of lives around the world," he says.

Each of the other finalists' consolation prize is a connection and a foot in the door at Capital Factory, says CEO Joshua Baer.

"Every time we do one of these, we meet a bunch of companies that we end up working with — and many of whom we end up investing in," he says at the virtual event. "We're going to be following up with all of the companies from today. Anyone who was a finalist and up on the stage is someone we are excited about and interested in working more closely with."

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7 can't miss Houston business and innovation events for July

where to be

Editor's note: While many Houstonians are flocking to vacation destinations, there are still plenty of opportunities to network and learn at tech and business events for those sticking close to home this month. From an inaugural biotech summit to the 12th edition of a local pitch showcase, here are the Houston business and innovation events you can't miss in July and how to register. Please note: this article might be updated to add more events.

July 10 - Out in Tech Mixer 

Out in Tech Houston provides an inclusive networking space for LGBTQ+ people and allies working in tech. Check out this relaxed, social-mixer event, hosted on the second Thursday of every month.

This event is Thursday, July 10, from 7 to 8:30 p.m. at Second Draught. Register here.

July 14 – Latinas in Tech Coworking Day 

Connect with fellow Latinas in the industry at Sesh Coworking. Network or work alongside peers, board members and community leaders in a shared office environment.

This event is Monday, July 14, from 9-11:30 a.m. at Sesh Coworking. Find more information here.

July 17 – UTMB Innovation VentureX Summit

Attend the inaugural UTMB Innovation VentureX Summit, where innovators, entrepreneurs, researchers and investors will dive into the future of biotech. Expect panel discussions, fireside chats, a technology showcase and networking opportunities.

This event is Thursday, July 17, from 7:30 a.m.-4 p.m. at The University of Texas Medical Branch at Galveston. Find more information here.

July 17 – Open Project Night 

Collaborate on solutions for some of Houston’s most pressing issues at this month’s Open Project Night at Impact Hub Houston. Hear from guest speakers and listen to open mic pitches. July’s theme is Decent Work & Economic Growth.

This event is Thursday, July 17, from 5:30-7:30 p.m at Impact Hub Houston. Register here.

July 24 – NASA Tech Talks

Every fourth Thursday of the month, NASA experts, including longtime engineer Montgomery Goforth, present on technology development challenges NASA’s Johnson Space Center and the larger aerospace community are facing and how they can be leveraged by Houston’s innovation community. Stick around after for drinks and networking at Second Draught.

This event is Thursday, July 24, from 6-7 p.m. at the Ion. Register here.

July 30 – Ion Bike Club

Join Bike Houston at the Ion for a 45-minute guided cruise through the Ion District and Midtown. Afterward, enjoy a complimentary beer and network with like-minded riders at Second Draught.

This event is Wednesday, July 30, from 5:30-7:30 p.m. at the Ion. Register here.

July 31 – Bayou Startup Showcase

Hear pitches from startups and small businesses from Rice University’s OwlSpark and the University of Houston’s RED Labs accelerators at the 12th annual Bayou Startup Showcase. Read more about this year’s teams here.

This event is Thursday, July 31, from 3:30-7 p.m. at the Ion. Register here.

Houston researchers: Here's what it takes to spot a great new idea

houston voices

Having a “promotion focus” really does create a mental lens through which new ideas are more visible.

Key findings:

  • New ideas can be crucially important to businesses, driving innovation and preventing stagnation.
  • Recognizing those ideas, though, isn’t always easy.
  • Nurturing what is known as “promotion focus” can help managers spot fresh ideas.

Whenever the late surgeon Michael DeBakey opened a human chest, he drew on a lifetime of resources: the conviction that heart surgery could and should be vastly improved, the skill to venture beyond medicine’s known horizons and the vision to recognize new ideas in everyone around him, no matter how little formal training they had.

Appreciating new ideas is the heartbeat of business as well as medicine. But innovation is surprisingly hard to recognize. In a pioneering 2017 article, Rice Business Professor Jing Zhou and her colleagues published their findings on the first-ever study of the traits and environments that allow leaders to recognize new ideas.

Recent decades have produced a surge of research looking at how and when employees generate fresh ideas. But almost nothing has been written on another crucial part of workplace creativity: a leader’s ability to appreciate new thinking when she sees it.

Novelty, after all, is what drives company differentiation and competitiveness. Work that springs from new concepts sparks more investigation than work based on worn, already established thought. Companies invest millions to recruit and pay star creatives.

Yet not every leader can spot a fresh idea, and not every workplace brings out that kind of discernment. In four separate studies, Zhou and her coauthors examined exactly what it takes to see a glittering new idea wherever it appears. Their work sets the stage for an entirely new field of future research.

First, though, the team had to define their key terms. “Novelty recognition” is the ability to spot a new idea when someone else presents it. “Promotion focus,” previous research has shown, is a comfort level with new experiences that evokes feelings of adventure and excitement. “Prevention focus” is the opposite trait: the tendency to associate new ideas with danger, and respond to them with caution.

But does having “promotion focus” as opposed to “prevention focus” color the ability to see novelty? To find out, Zhou’s team came up with an ingenious test, artificially inducing these two perspectives through a series of exercises. First, they told 92 undergraduate participants that they would be asked to perform a set of unrelated tasks. Then the subjects guided a fictional mouse through two pencil and paper maze exercises.

While one exercise showed a piece of cheese awaiting the mouse at the end of the maze (the promise of a reward), the other maze depicted a menacing owl nearby (motivation to flee).

Once the participants had traced their way through the mazes with pencils, they were asked to rate the novelty of 33 pictures — nine drawings of space aliens and 24 unrelated images. The students who were prepped to feel an adventurous promotion focus by seeking a reward were much better at spotting the new or different details among these images than the students who’d been cued to have a prevention focus by fleeing a threat.

The conclusion: a promotion focus really does create a mental lens through which new ideas are more visible.

Zhou’s team followed this study with three additional studies, including one that surveyed 44 human resource managers from a variety of companies. For this study, independent coders rated the mission statements of each firm, assessing their cultures as “innovative” or “not innovative.” The HR managers then evaluated a set of written practices — three that had been in use for years, and three new ones that relied on recent technology. The managers from the innovative companies were much better at rating the new HR practices for novelty and creativity. To recognize novelty, in other words, both interior and external environments make a difference.

The implications of the research are groundbreaking. The first ever done on this subject, it opens up a completely new research field with profound questions. Can promotion focus be created? How much of this trait is genetic, and how much based on natural temperament, culture, environment and life experience? Should promotion focus be cultivated in education? If so, what would be the impact? After all, there are important uses for prevention focus, such as corporate security and compliance. Meanwhile, how can workplaces be organized to bring out the best in both kinds of focus?

Leaders eager to put Zhou’s findings to use right away, meanwhile, might look to the real-world model of Michael DeBakey. Practice viewing new ideas as adventures, seek workplaces that actively push innovation and, above all, cultivate the view that every coworker, high or low, is a potential source of glittering new ideas.

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This article originally appeared on Rice Business Wisdom.

Jing Zhou is the Mary Gibbs Jones Professor of Management and Psychology in Organizational Behavior at the Jones Graduate School of Business of Rice University. Zhou, J., Wang, X., Song, J., & Wu, J. (2017). "Is it new? Personal and contextual influences on perceptions of novelty and creativity." Journal of Applied Psychology, 102(2): 180-202.