Urban Capital Network have launched a fund-of-funds to allow investors to tap into later-stage startups at a much lower barrier of entry. Images via urbancapitalnetwork.com

Early stage investing has always been a tried and true way for investors to get in on the ground floor of a tech company for a smaller financial commitment — but it's risky. Urban Capital Network has created an alternative.

UCN was founded to democratize investment opportunities and help investors of color find investment opportunities all while cutting their teeth as novice investors. Lenny Saizan, co-founder of UCN, says that its Horizon Fund II allows for UCN investors to get involved in venture-backed companies at a much lower price tag.

Saizan explains that UCN members are in that lower tier of accredited investors who don't necessarily have $250,000 or $1 million to invest in a fund — but they have $15,000 to $25,000 to invest.

"We allow more people to participate in venture funds or venture-backed opportunities," Saizan tells InnovationMap. "Instead of going into one deal at a very early stage, you’re getting in a later stage where the deal is more de-risked and you have a better chance of returns."

As members start to see returns on these premium investment opportunities, Saizan says, UCN encourages their investors to look at earlier stage within their own communities.

“We recognized that there was still an issue with minority founders getting funded as well,” Saizan says of UCN's mission as a whole. “We thought the best approach would be to create wealth and income within the communities that those founders would be reaching out to.”

Horizon Fund II will deploy capital in up to five funds — each with 15 to 30 portfolio companies. The first two investment opportunities have already been secured: Pegasus Tech Ventures's Pre-IPO Fund and Mercury Fund V, a Houston VC firm. In two years, UCN has seen five exits across its six funds. It's the group's second fund of funds — the first was an investment in Mercury Fund IV.

Eric Tait, co-founder at UCN, says they are looking for variety in the funds they invest in and are targeting top-tier, and highly rated VC firms all over the country that UCN's leadership has connections with.

“We’re relatively agnostic in terms of industry,” Tait says. “We do try to have a portfolio allocation that will create a return threshold that is varied.”

Typically, Tait explains, investing in a VC fund won't garner returns for seven to 10 years. However, UCN specifically targeted Pegasus's Pre-IPO Fund because ROI is expected between years two and four.

Tait says one of the things of focus for UCN this year is to grow the network's reach.

“A big goal for us is to tap into more institutional investors — like family offices, and things of that nature,” Tait says. “What we’ve realized is what we’ve been able to do for individual investors has been locked down, and we can do the same thing on a smaller scale for institutional dollars who are interested in these opportunities but don’t want to put in $1 million.”

Saizan says his team is also looking to give members a tech upgrade when it comes to accessing information and deals on UCN's platform. Additionally, he wants to focus on strengthening the group's network of VCs and how UCN interacts with them. He says firms reach out with interest all the time, and he wants to streamline that process using technology.

“We really want to formalize our network,” Saizan says. “We’re bringing diverse deal flow, diverse investors, diverse talent, and a diverse perspective. So, a lot of times VCs tap us when they are looking for an opportunity — or maybe they have an opportunity and want to know what we think.”

This week's Houston innovators to know includes Lenny Saizan of Urban Capital Network, Katie Eick of Rollin' Vets, and Tony Loyd of AECOM. Courtesy photos

3 Houston innovators to know this week

Who's who

Editor's note: This year has made for some pivotal moments for various Houston companies across industries. For some, the pandemic has meant reevaluating their business plans or increased a need for their product or service. For others, social unrest has called for systemic change. Technology emerges for these needs. This week's Houston innovators are addressing these needs with their innovative efforts.

Lenny Saizan, co-founder and managing partner

Lenny Saizan — along with three other Houston innovation leaders — founded Urban Capital Network to increase diversity and inclusion within the venture capital space. Photo via urbancapitalnetwork.com

While venture capital firms usually operate in a similar structure, Lenny Saizan and his co-founders wanted to set up Urban Capital Network differently in order to "democratize access to premium VC-backed investments," Saizan says. UCN invests into VCs that meet their diversity and inclusion requirements as a limited partner, but then also invests directly into startups as a sort of hybrid investor.

"We take a portion of our proceeds and invest in entrepreneurs of color, and we also donate to nonprofits that provide support resources for those entrepreneurs," Saizan says on this week's episode of the Houston Innovators Podcast. "We're completing the cycle. We find that it's easier to go to a VC and offer to give them money and also help them diversify their investor portfolio."

Saizan shares more about the group in the podcast episode and discusses what they've already accomplished in just a few months. Read more.

Katie Eick, founder of Rollin' Vets

Katie Eick always wanted to be able to offer mobile services. Photo courtesy of Rollin' Vets

Katie Eick founded her mobile vet company in 2016 after years of wanting to be able to provide the type and level of service she has now at Rollin' Vets. While convenience technologies like delivery apps buoyed her company's steady growth, the pandemic really established market need for her business model.

"We were continuously growing slowly — then COVID hit. It really cemented that … all the convenience services are in the forefront of people's minds." Eick tells InnovationMap. "COVID made it clear that this was a necessary service."

Now, she plans to adopt a franchising model and is planning an expansion into San Antonio and Dallas before going national. Read more.

Tony Loyd, vice president at AECOM

Just like Hurricane Harvey, COVID-19 is causing Houstonians to rethink how they operate — and that tech and innovation inversion is opening the door to new opportunities. Courtesy Photo

COVID-19 is affecting the evolution of technology — it's as simple as that, according to Tony Loyd. And it's not the first time — nor the last — that consumer needs affect tech innovation.

"Could COVID-19 be triggering an inversion paradigm? An inversion paradigm puts needs first rather than product first," writes Loyd in a guest column for InnovationMap. "We have experienced many historic technology inversions. Remember when our televisions were air-wave dependent and telephones were tethered to the wall? Because the need evolved for a phone that was mobile, today our TV's are wired, and our telephones are untethered." Read more.

Lenny Saizan — along with three other Houston innovation leaders — founded Urban Capital Network to increase diversity and inclusion within the venture capital space. Photo via urbancapitalnetwork.com

This investor is democratizing access to venture capital deals in Houston while promoting inclusion

HOUSTON INNOVATORS PODCAST EPISODE 47

The Urban Capital Network, which launched in Houston earlier this year, gets the best of both worlds. Not only is the group working with venture capital firms as a limited partner, but, operating as a hybrid investor, UCN also is funding startups directly — using both avenues to promote diversity and inclusion.

"We can be described as a hybrid between an angel investment group and a small VC firm," says Lenny Saizan, co-founder and managing partner of Urban Capital Network. "Our mission is to democratize access to premium VC-backed investments."

By forming relationships with VC funds — specifically ones that value UCN's diversity and inclusion platform — the group's network of investors can form syndicates, or group investments, to work with these funds on deals they otherwise couldn't afford to invest into. The VCs benefit in that they have access to new limited partners.

Saizan says UCN has raised $3 million in six months, and all that's been invested.

"We take a portion of our proceeds and invest in entrepreneurs of color, and we also donate to nonprofits that provide support resources for those entrepreneurs," Saizan says on this week's episode of the Houston Innovators Podcast. "We're completing the cycle. We find that it's easier to go to a VC and offer to give them money and also help them diversify their investor portfolio."

Saizan has three business partners, who each provides their own expertise to UCN: Heath Butler, network partner at Houston-based Mercury Fund; Felix Chevalier, founder of The Chevalier Law Firm; and Dr. Eric S. Tait president of Vernonville Asset Management.

Saizan discusses some of the challenges and opportunities the pandemic has provided UCN and where he and his co-founders are planning to take the investment group in the episode of the podcast. You can listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.

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Houston robotics co. closes series B after year of growth

money moves

Houston- and Boston-based Square Robot Inc. closed a series B round of funding last month.

The advanced submersible robotics company raised $13 million, according to Tracxn.com, and says it will put the funds toward international expansion.

"This Series B round, our largest to date, enables us to accelerate our growth plans and meet the surging global demand for our services,” David Lamont, CEO, said in a statement.

The company aims to establish a permanent presence in Europe and the Middle East and grow its delivery services to reach four more countries and one new continent in Q1 2025.

Additionally, Square Robot plans to release a new robot early next year. The robot is expected to be able to operate in extreme temperatures up to 60 C. The company will also introduce its first AI-enabled tools to improve data collection.

Square Robot launched its Houston office in 2019. Its autonomous, submersible robots are used for storage tank inspections and eliminate the need for humans to enter dangerous and toxic environments.

The company was one of the first group of finalists for the Houston Innovation Awards' Scaleup of the Year, which honors a Bayou City company that's seen impressive growth in 2024. Click here to read more about the company's growth.

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This article originally ran on EnergyCapital.

Show me the money: Top Houston innovation grant and gift news of 2024

year in review

Editor's note: As the year comes to a close, InnovationMap is looking back at the year's top stories in Houston innovation. Money means a lot to startups and other innovative entities, and while startups are usually scouting venture capital investors, grants and donations are key too. These are the most-read news articles about grants and gifts — be sure to click through to read the full story.

Rice researchers secure $35M federal grant to advance medical device technology

Rice’s Biotech Launch Pad will lead the effort to commercialize the device. Photo courtesy Rice University

Rice University has secured part of a nearly $35 million federal grant aimed at commercializing a bioelectric implant for treatment of type 2 diabetes and obesity.

The federal Advanced Research Projects Agency for Health awarded the $34.9 million grant to Rice and several other universities.

Rice’s Biotech Launch Pad will lead the effort to commercialize the self-contained, implantable Rx On-site Generation Using Electronics (ROGUE) device. ROGUE houses cells that are engineered to produce type 2 diabetes and obesity therapies in response to patients’ needs. Continue reading.

Houston health care institutions receive $22M to attract top recruits

The grants, which are between $2 million to $6 million each, are earmarked for recruitment of prominent researchers. Photo via Getty Images

Houston’s Baylor College of Medicine has received a total of $12 million in grants from the Cancer Prevention & Research Institute of Texas to attract two prominent researchers.

The two grants, which are $6 million each, are earmarked for recruitment of Thomas Milner and Radek Skoda. The Cancer Prevention & Research Institute of Texas (CPRIT) announced the grants May 14.

Milner, an expert in photomedicine for surgery and diagnostics, is a professor of surgery and biomedical engineering at the Beckman Laser Institute & Medical Clinic at the University of California, Irvine and the university’s Chao Family Comprehensive Cancer Center. Continue reading.

New report ranks Houston top market for life sciences

Houston lands in the No. 7 spot for growth in the granting of degrees in biological and biomedical sciences. Photo by Natalie Harms/InnovationMap

Thanks in large part to producing hundreds of college-trained professionals, Houston’s life sciences industry ranks among the top U.S. markets for talent in 2024.

In a report published by commercial real estate services company CBRE, Houston lands in the No. 7 spot for growth in the granting of degrees in biological and biomedical sciences. From 2017 to 2022, Houston notched a growth rate of 32.4 percent in this category.

In 2022, the University of Houston led the higher education pack in the region, graduating 746 people with a bachelor’s degree or above in biological or biomedical sciences, according to the report. Continue reading.

Texas organization grants $68.5M to Houston institutions for recruitment, research

Several Houston organizations have received millions from the Cancer Prevention and Research Institute of Texas. Photo via tmc.edu

Three prominent institutions in Houston will be able to snag a trio of high-profile cancer researchers thanks to $12 million in new funding from the Cancer Prevention and Research Institute of Texas.

The biggest recruitment award — $6 million — went to the University of Texas MD Anderson Center to lure researcher Xiling Shen away from the Terasaki Institute for Biomedical Innovation in Los Angeles.

Shen is chief scientific officer at the nonprofit Terasaki Institute. His lab there studies precision medicine, including treatments for cancer, from a “systems biology perspective.” Continue reading.

Houston health care institution secures $100M for expansion, shares renderings

Baylor College of Medicine's Lillie and Roy Cullen Tower is set to open in 2026. Rendering courtesy of SLAM Architecture

Baylor College of Medicine has collected $100 million toward its $150 million fundraising goal for the college’s planned Lillie and Roy Cullen Tower.

The $100 million in gifts include:

  • A total of $30 million from The Cullen Foundation, The Cullen Trust for Health Care, and The Cullen Trust for Higher Education.
  • $12 million from the DeBakey Medical Foundation
  • $10 million from the Huffington Foundation
  • More than $45 million from members of Baylor’s Board of Trustees and other community donors, including the M.D. Anderson Foundation, the Albert and Margaret Alkek Foundation, and The Elkins Foundation.

“The Cullen Trust for Health Care is very honored to support this building along with The Cullen Foundation and The Cullen Trust for Higher Education,” Cullen Geiselman Muse, chair of The Cullen Trust for Health Care, says in a news release. “We cannot wait to see what new beginnings will come from inside the Lillie and Roy Cullen Tower.” Continue reading.

TMC launches cancer-focused partnership with Japan

global collaboration

Houston's Texas Medical Center announced the launch of its new TMC Japan BioBridge and Japan-Accelerator Cancer Therapeutics and Medical Devices, or JACT, this month.

The strategic partnership between Japan-based Mitsui Fudosan Co. Ltd. and the National Cancer Center will focus on advancing cancer treatments and providing a pathway for Japanese innovators to expand in the U.S. market. A delegation from TMC recently visited Tokyo, and William F. McKeon, president and CEO of TMC, signed the TMC Japan BioBridge Memorandum of Understanding with Takeshi Ozane, general manager of Mitsui Fudosan, and Hitoshi Nakagama, president of the National Cancer Center of Japan.

“The launch of TMC Japan BioBridge is a vital step forward in connecting two global leaders in healthcare innovation,” McKeon says in a statement. “Japan’s leadership has demonstrated an impressive commitment to advance medical cures and life sciences technologies and through this partnership, we are opening necessary doors for Japanese researchers and innovators to access the US market and collaborate with our TMC ecosystem. Together, we aim to accelerate critical breakthroughs to make a difference for patients all around the world.”

The new JACT will offer cancer-treatment companies a structured process to prepare for a U.S. expansion and will allow for meetings with pharmaceutical companies, hospital systems and investors and provide insights on U.S. regulatory approvals. It'll focus on three key areas, according to the statement:

  1. Milestone development and financial planning
  2. Clinical and regulatory expertise
  3. Strategic partnerships and market insights

“This TMC Japan BioBridge and JACT Program will enable us to promote the advancement of start-up companies aiming to commercialize innovative medical technologies originating in Japan into the U.S." Nakagama says in a statement. "We also hope this collaboration will not be limited to our (Japan Agency for Medical Research and Development)-supported project, but will lead to further cooperation between TMC, NCC, and other Japanese institutions in various fields.”

This is the sixth international strategic partnership for the TMC. It launched its first BioBridge, which focus on partnerships to support international healthcare companies preparing for U.S. expansion, with the Health Informatics Society of Australia in 2016. It also has BioBridge partnerships with the Netherlands, Ireland, Denmark and the United Kingdom.