Houston investor outlines how rare VCs are in Houston — and how to find them

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If you feel like it's hard to find venture capitalists in Houston, you wouldn't be wrong, according to this Houston investor. Photo via Getty Images

As a venture capitalist and former startup founder living in Houston, I get asked a lot about the best way to find and connect with a venture capitalist in Houston. My usual advice is to start with a list, and reach out to everyone on that list. But no one has a comprehensive list. In fact, VCs are such a quiet bunch that I’ve yet to meet someone who personally knows everyone on this proverbial list.

So, I got together with a couple of VC friends of mine, and we put together our own Houston venture capitalist list.

There are, by our count, 11 active venture capital funds headquartered in Houston of any size and type, and outside of corporate venture capital and angel investors, there are 30 total venture capitalists running funds.

Houston has always been quite thin on the VC fund front. I’ve jokingly introduced myself for a while as “one of the 13 venture capitalists in Houston.”

Let’s put this scale in some brutal perspective. With 7.2 million people in the Greater Houston Metro Area, the odds of finding a partner level active venture capitalist in Houston is about 1 in 240,000, if you take a most expanded definition of venture capitalist that might come down to 1 in 100,000. We’re the fifth largest metropolitan area in the country with a tremendous economic engine; there is a ton of capital in Houston, but it’s residing in things like institutional fixed income and equities, real estate, wealth management, corporate, private equity, family office, energy and infrastructure Basically, mostly everywhere but in venture capital funds for tech startups.

By comparison, there are almost as many Fortune 500 CEOs in Houston — 24, by our count — as venture capitalists and fewer venture capitalists than Fortune 1000 CEOs, of which there are 43. That means running into a VC in the checkout line at HEB is about as rare as running into the CEO of CenterPoint, ConocoPhillips, or Academy. In fact, as there are 115 cities in the Greater Houston area, you are three times more likely to be a mayor in Greater Houston Area than a partner at an investor at a VC firm, and more likely to be a college or university president. While we’re at it, you’re 400 times more likely to be a lawyer, 250 times more likely to be a CPA, and over 650 times more likely to be a medical doctor.

Our 30 venture capitalists in the Greater Houston Area are spread across 20 firms and all major venture sectors and stages. Venture capitalist is defined for this list as a full time managing director or partner-level investment professional actively running a venture capital fund with limited partners, currently investing in new venture capital deals from their fund from seed to growth stage, and residing in the Greater Houston Metro area.

To get to 31 we added in a couple of people running venture set asides for PE funds, and a number who work from Houston for funds with no office here. We excluded CVCs, as the decision making is more corporate than individual and rarely includes the committed fund and carried interest structure that defines venture capital, and excluded professionals at angel networks, accelerators, and seed funds that provide investment, but don’t manage conventional venture capital funds, as well as PE funds that do the occasional venture deal. We might be able to triple the number if we include venture capitalists at any professional level, and add in those professionals at PE and angel and seed funds, and corporate venture capital teams who are actively investing. But we’ll get to those other sources of funding in the next list.

The 11 venture capital funds headquartered in Houston are: Mercury, Energy Transition Ventures (my fund), Montrose Lane (formerly called Cottonwood), Texas Medical Center Venture Fund, Artemis, New Climate Ventures, Fitz Gate Ventures, Curate Capital, Knightsgate Ventures, Amplo Ventures,and First Bight Ventures.

Another half a dozen firms have a partner level venture capital investor here, but are headquartered elsewhere: Energy Innovation Capital, Decarbonization Partners, 1984 Ventures, Altitude Ventures, Ascension Ventures, Moneta Ventures, and MKB & Co. Two others, CSL Ventures and SCF Partners, are local private equity funds with a venture capital partner in Houston and a dedicated allocation from a PE fund.

Culling these for partner or managing director level currently in Houston, in alphabetical order by first name, LinkedIn profile and all.

We may have missed a couple of VCs hiding in plain sight, as venture capital is a pretty dynamic business.

VCs are just rare. And yes, perhaps more rare in Houston than in California. Something less than 1 in 100 VCs in the country live in Houston. Across the US there are somewhere around 1,000 to 2,000 active venture capital firms, and maybe another 1,000 to 2,000 active US based CVCs — so, plus or minus maybe at most 4,000 to 5,000 currently active partner level venture capitalists in the country excluding CVC professionals (active VCs and VC funds are really hard to count).

Perhaps in the most stunning statistic, the 7,386 elected state legislators in the US today outnumber the total number of American venture capitalists. Luckily for startup founders, the venture capitalists are more likely to return your phone call.

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Neal Dikeman is a venture capitalist and seven-time startup co-founder investing out of Energy Transition Ventures. He’s currently hosting the Venture Capital for First Time Founders Series at the Ion, where ETV is headquartered.

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Two Houston venture capitalists weigh in on the state of startup investing in an economic climate recovering from the COVID-19 crisis. Getty Images

Houston-based venture firm closes recent fund and reflects on COVID-19's effect on investing

must be the money

It's no secret that — in light of coronavirus-caused closures, market disruption, and historic unemployment — venture capitalist might be a little more hesitant to join in on a startup's investment round. Yet one Houston VC group has managed amidst the crisis — and even succeeded in closing its most recent fund.

Fitz Gate Ventures, which operates out of Houston but with the support of Princeton University, announced the closing of its Fund II on May 5. Focusing on seed and pre-seed rounds, co-founders and managing directors Mark Poag and Jim Cohen will be looking for startups across industries — usually with some revenue and customer base — to write around $500,000 checks to.

At a virtual panel event hosted by Houston Exponential, the investors say they have appreciated focusing on smaller deals in times like these — it's allowed them to work closely with their portfolio of 15 startups, two of which (Cheers and Spruce) have roots in Houston.

"We are definitely more hands-on with our founders," Cohen says on the panel, noting that it feels like they are having board meetings daily — virtually, of course.

Most of these meetings, Poag explains, are focusing on making sure the portfolio startups have enough runway with their cash reserves to make it at least through the end of the year without any new sales. Of course, that's meant cutting salaries and employees and finding other options to operate in a lean way.

Fitz Gate also has stayed in touch virtually with its Friends of Fitz group — a unique network of Princeton-related professionals (such as faculty, fellow VCs, domain experts, etc.) that give the investors and their portfolio companies a strategic advantage.

While the video conferences are useful to stay in touch with existing portfolio companies, Poag says he — as well as other VCs — might be wary of making new investments in this capacity.

"We haven't invested in any new companies since the COVID situation, but it will be interesting to see if we and other venture capital firms get comfortable with making investments without an in-person meeting," says Poag on the panel.

Generally, Cohen says he has observed a different investment environment since the beginning of March, and there's no clear indication when things will change.

"I think in the short-term, investing will be slower. Basically, people are still trying to figure out what's going on," Cohen says, noting how, in March, the tides seemed to change every 24 hours. "Now, things have started to slow down, but the ground is still shifting beneath our feet. I think most venture investors are proceeding cautiously."

Something else to keep an eye on, as the Fitz Gate founders have experienced, is that startups are making changes to their products in order to provide a more relevant offer to customers. One of the fund's portfolio companies is Houston-founded Spruce, which recently started offering disinfecting deals along with its concierge services to apartment dwellers.

"None of our companies have pivoted to change anything they are doing fundamentally to take advantage of the situation," says Cohen, citing some supply chain software startups and a charity-based startup that have also seen business success during the COVID-19 crisis.

However, approaching VCs for the first time is now a different story, amidst the crisis. While the Fitz Gate founders explain that they open and respond to every email inquiry from startups, that's not the case for most VCs who prefer a warm introduction — but maybe not even that considering the current economic climate.

"If you're approaching a venture investor today, you might get a bit of a weird look," Cohen says of startups looking to fundraise.

On the virtual panel, the duo shared some insight on their passion for venture funding, as well as some general advice for startups. One key takeaway from the investors was a reminder that most VCs are funding between 1 and 2 percent of deals that come across their table.

"Don't get discouraged," Cohen says. "Any venture fund you talk to, they're not geniuses. They are operating on very limited information about whatever it is you pitched them in a really short fashion."

While it is disheartening to hear a "no" from an investor, it doesn't mean the startup's idea or product isn't valid.

In wrapping up the call, Cohen remarks on the environment for Houston innovation. While he admits the ecosystem lacks access to funding, he observes that this will change in a matter of time.

"It's amazing how many startups in Houston — and the support infrastructure," Cohen says, noting startup development organizations like The Ion, The Cannon, and more. "So much going on in this ecosystem, so I think, in that sense, it's an incredibly vibrant place to be as a founder."

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Johnson Space Center and UT partner to expand research, workforce development

onward and upward

NASA’s Johnson Space Center in Houston has forged a partnership with the University of Texas System to expand collaboration on research, workforce development and education that supports space exploration and national security.

“It’s an exciting time for the UT System and NASA to come together in new ways because Texas is at the epicenter of America’s space future. It’s an area where America is dominant, and we are committed as a university system to maintaining and growing that dominance,” Dr. John Zerwas, chancellor of the UT System, said in a news release.

Vanessa Wyche, director of Johnson Space Center, added that the partnership with the UT System “will enable us to meet our nation’s exploration goals and advance the future of space exploration.”

The news release noted that UT Health Houston and the UT Medical Branch in Galveston already collaborate with NASA. The UT Medical Branch’s aerospace medicine residency program and UT Health Houston’s space medicine program train NASA astronauts.

“We’re living through a unique moment where aerospace innovation, national security, economic transformation, and scientific discovery are converging like never before in Texas," Zerwas said. “UT institutions are uniquely positioned to partner with NASA in building a stronger and safer Texas.”

Zerwas became chancellor of the UT System in 2025. He joined the system in 2019 as executive vice chancellor for health affairs. Zerwas represented northwestern Ford Bend County in the Texas House from 2007 to 2019.

In 1996, he co-founded a Houston-area medical practice that became part of US Anesthesia Partners in 2012. He remained active in the practice until joining the UT System. Zerwas was chief medical officer of the Memorial Hermann Hospital System from 2003 to 2008 and was its chief physician integration officer until 2009.

Zerwas, a 1973 graduate of the Houston area’s Bellaire High School, is an alumnus of the University of Houston and Baylor College of Medicine.

3 Houston innovators who are making headlines right now

Featured Innovators

Editor's note: Houston innovators have kicked off the new year with big developments, from an immune-boosting nanodrug to NSF research funding and more. Below, meet three local innovators who have recently been in the headlines.

Kirsten Adam, Rice University

Kirsten Adam. Courtesy photo.

Rice University psychologist Kirsten Adam has received a $600,000 National Science Foundation CAREER Award to research how visual distractions like phone notifications, flashing alerts, crowded screens and busy workspaces can negatively impact focus—and how the brain works to try to regain it. Adam’s work will aim to clarify how the brain refocuses in the age of screens, instant gratification and other lingering distractions. The funding will also be used to train graduate students in advanced cognitive neuroscience methods, expand access to electroencephalography (EEG) and for public data sharing. Read more.

Houston lab-test startup seeks $1M for nationwide expansion

Jim Gebhart, founder and CEO of TheLabCafe.com. Courtesy photo.

Driven by the desire to knock down lab-test barriers, health care industry veteran Jim Gebhart founded Houston-based TheLabCafe.com in 2024. The platform provides access to low-cost medical tests without requiring patients to carry health insurance. It currently serves patients in six states and is poised for major U.S. expansion early this year. Read more.

Wei Gao, University of Houston College of Pharmacy

Wei Gao (center). Photo courtesy UH.

Wei Gao, assistant professor of pharmacology at the University of Houston College of Pharmacy, may have a solution to regulatory B cells (Bregs) which block the body's natural immunity and are found in pancreatic and lung cancers. Gao and her team have developed Nano-273, a dual-function drug, packaged in an albumin-based particle, that boosts the immune system to help it better fight these cancers. Read more.

Texas booms as No. 3 best state to start a business right now

Innovation Starts Here

High employment growth and advantageous entrepreneurship rates have led Texas into a triumphant No. 3 spot in WalletHub's ranking of "Best and Worst States to Start a Business" for 2026.

Texas bounced back into the No. 3 spot nationally for the first time since 2023. After dropping into 8th place in 2024, the state hustled into No. 4 last year.

Ever year, WalletHub compares all 50 states based on their business environment, costs, and access to financial resources to determine the best places for starting a business. The study analyzes 25 relevant metrics to determine the rankings, such as labor costs, office space affordability, financial accessibility, the number of startups per capita, and more.

When about half of all new businesses don't last more than five years, finding the right environment for a startup is vital for long-term success, the report says.

Here's how Texas ranked across the three main categories in the study:

  • No. 1 – Business environment
  • No. 11 – Access to resources
  • No. 34 – Business costs

The state boasts the 10th highest entrepreneurship rates nationwide, and it has the 11th-highest share of fast-growing firms. WalletHub also noted that more than half (53 percent) of all Texas businesses are located in "strong clusters," which suggests they are more likely to be successful long-term.

"Clusters are interconnected businesses that specialize in the same field, and 'strong clusters' are ones that are in the top 25 percent of all regions for their particular specialization," the report said. "If businesses fit into one of these clusters, they will have an easier time getting the materials they need, and can tap into an existing customer base. To some degree, it might mean more competition, though."

Texas business owners should also keep their eye on Houston, which was recently ranked the 7th best U.S. city for starting a new business, and it was dubbed one of the top-10 tech hubs in North America. Workers in Texas are the "third-most engaged" in the country, the study added, a promising attribute for employers searching for the right place to begin their next business venture.

"Business owners in Texas benefit from favorable conditions, as the state has the third-highest growth in working-age population and the third-highest employment growth in the country, too," the report said.

The top 10 best states for starting a business in 2026 are:

  • No. 1 – Florida
  • No. 2 – Utah
  • No. 3 – Texas
  • No. 4 – Oklahoma
  • No. 5 – Idaho
  • No. 6 – Mississippi
  • No. 7 – Georgia
  • No. 8 – Indiana
  • No. 9 – Nevada
  • No. 10 – California
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This article originally appeared on CultureMap.com.

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