Four Houston investment professionals have joined forces to create a new fund. Photos via genesis-park.com

Four Houstonians, each with decades of finance experience under their belts, have teamed up to create a new fund to support growth of startups.

Curtis Hartman, Gina Luna, Paul Hobby, and Peter Shaper have joined forces to create GP Capital Partners, a new $275 million fund structured as a Small Business Investment Company that will provide funding for privately-held, lower middle market businesses. The fund, which received its SBIC license from the U.S. Small Business Administration last month, extends the Genesis Park private investment platform.

"The types of companies with which we plan to partner are the backbone of our regional economy. They create good jobs and are poised for growth," says Curtis Hartman, principal of the fund, in a news release. "While small businesses disproportionally drive economic growth and employment, they are underserved by traditional banks and other capital providers. We are here to support and accelerate their success."

The fund, which will target companies based in Texas, as well as the Gulf Coast and southern regions of the country, will make both debt and equity investments across industries. According to the release, the fund will focus on communications, information technology, business and industrial services, and advanced and tech-enabled manufacturing — all industries the founders of the fund have expertise in.

GP Capital Partners plans to make a total of 20 to 25 investments ranging from $5 million to $20 million. In addition to the capital deployed, the four fund founders will offer their experience across private equity, private credit, banking, professional services, and as operating company executives.

"This is not a one-sided deal where we make a loan or equity investment and sit-back, simply monitoring performance. We are in this to help these companies grow, transition and succeed," says GP Capital Partners Principal Gina Luna in the release. "I love working with owners and management teams and helping them take their company to the next level. That's what we have all done for most of our careers. We know that if our partners are successful, we are successful, and that drives us every day."

Texas Monthly has a new owner. Texas Monthly/Facebook

Houston billionaire energy exec buys Texas Monthly

Media on media

For the second time in less than three years, Texas Monthly has a new owner. Randa Duncan Williams, chairman of Houston-based midstream oil and gas company, Enterprise Products Partners LP, has purchased the Austin-based magazine. The terms of the sale were not disclosed.

The magazine will become a part of Enterprise Products Company (EPCO), "a privately held company which owns interests in commercial real estate and ranching, as well as a substantial interest in Enterprise Products Partners L.P., a publicly traded midstream energy company," says a release.

"I have been an avid Texas Monthly reader since I was a teenager," says Duncan Williams, chairman of Texas Monthly, LLC, and of EPCO, in the release. "My family is delighted to provide the resources to support this iconic Texas institution which is nationally recognized for its editorial flair."

Williams is the daughter of EPP's late founder, Dan L. Duncan. She has a net worth of $6.2 billion, according to Forbes.

In TM's official statement, president Scott Brown is quoted as saying Duncan Williams wants to own the magazine "forever."

Forever may be what the magazine needs, following a tumultuous era for Texas Monthly, considered to be both a beacon of Texas culture and a shining example of long-form magazine journalism. In 2016, it was purchased from Emmis Communications by Genesis Park, a private investment firm led by Paul Hobby of the famed Houston-based Hobby family. Following that purchase, Hobby took over the role of chairman and CEO of the magazine, launching an arguably rocky tenure for Texas Monthly.

In February 2017, Hobby announced that Tim Taliaferro would be taking over the editor in chief position from Brian Sweany, a longtime TM staffer who climbed the ladder from intern in 1996 to taking the editor position following Jake Silverstein's departure for The New York Times Magazine in 2014. About a dozen notable writers left after Sweany's departure, though it's unfair to say it was a result of the masthead shakeup.

Just a few weeks into the Hobby-Taliaferro regime, journalism watchdog Columbia Journalism Review reported that Texas Monthly, a 13-time National Magazine Award winner, was going in a lifestyle direction. Reader reaction — not to mention the response from the journalism world — was swift, forcing the magazine to backpedal.

A year later, the magazine faced another misstep, this one involving Bumble and an alleged pay-for-play on social media. The somewhat salacious story also broke in the Columbia Journalism Review and eventually led to Taliaferro being moved into the newly created role of chief innovation officer. Thus began a year-long search that ended with Dan Goodgame being named editor in January 2019.

It's not breaking news to say it's an uncertain time for journalism, and Texas Monthly has clearly not survived unscathed. But hopefully Duncan Williams' purchase will help move the "national magazine of Texas" into a new era, one with a clear and bold vision.

For the sake of one of the nation's best magazines, we hope so.

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This article originally ran on CultureMap.

Capital Factory's Texas Startup Roadshow made a pit stop in Houston to discuss investment. Photo by Tim Leviston/Getty Images

Houston still needs capital, talent, and success stories to grow its innovation ecosystem, according to a panel of experts

Show me the money

While Houston has increased its number of capital investments in startups over the recent years, there's more work to be done.

A panel of experts at Capital Factory and J.P. Morgan's Texas Startups Roadshow discussed what the city still needs if it is going to accomplish its mission of being a vibrant, successful place for innovation.

For Blair Garrou, managing director of Mercury Fund, Houston has experienced a growth in the number of opportunities for deals, but his firm can only do so much.

"There's more activity going on right now than my 20 years here — it's coming," Garrou says. "And we don't have enough capital to support it."

Garrou says out-of-Houston firms want to invest in deals here, but they don't want to lead a round — they want Mercury Fund to, and they'll follow. For Garrou, that indicates a credibility problem that needs to be addressed.

Houston Exponential is attempting to right the course on this issue with its HX Venture Fund, says Sandy Wallis, managing director. The fund of funds puts money into non-Houston VCs in hopes that those VCs turn around and invest back into Houston.

"The number one problem I'm trying to help with, which I hear a lot from entrepreneurs, is getting more venture here, Wallis, who co-founded Weathergage Capital, says. "What we're trying to do is make sure that our entrepreneurs are meeting with VCs — not just the ones HX invests in, but all the ones that get into town."

She wants to connect the dots for startups — both to visiting VCs and local corporations, which, she says, are already engaged and interested.

"You can see the fluid activation of our corporates here," Wallis says. "Those corporates are engaging directly with the innovation going on in Houston, and we have our headliner tech companies in place."

One of the things that would spir interest and investment into Houston companies is more success stories coming out of Houston, says Paul Hobby, founding partner at Genesis Park. Focusing on talent — developing leadership, recruitment, and retention — is what the city needs to get there. It has all the other ingredients, he says.

"In Houston, we have the means, the opportunity, the will, the capital, and the risk tolerance to solve our own problems," Hobby says to the crowd.

Houston has been working on developing talent and providing resources for entrepreneurs for the past couple years, and many of those accelerator and incubator programs — like Station Houston, The Cannon, Impact Hub Houston, MassChallenge Texas, etc. — have launched to serve startups.

"We probably have 12 to 15 startup development organizations all with different flavors," Garrou says. "And in doing that, we're still looking to the outside for best practices, like Capital Factory, to ask how we could do this better."

The focus on improving resources for startups will continue, he says, and even more will deliver. However, not every single effort will see success, but that's OK, Garrou says.

"All of these are grand visions that Houston has to keep building," Garrou says. "Some of that won't pan out, but the fact that it's all happening and if 50 percent is successful, then I think we've done our jobs to meet entrepreneurs where they are."

Wallis agrees — in capitalism, you can't win it all.

"Developing Houston is going to have failures and successes, and it's about failing successfully," she says.

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With $150M in VC raise, this Houston company is re-envisioning the future of e-commerce operations

HOUSTON INNOVATORS PODCAST EPISODE 106

If you're operating a business that sells a product online, you have several options for software to support your efforts and needs as a merchant. However, as one group of Houston entrepreneurs realized, there wasn't a streamlined, one-stop-shop for e-commerce software. That is until Cart.com launched just over a year ago.

And it's been a busy year. The startup is led by CEO Omair Tariq, Chief Commercial Officer Remington Tonar, who previously served in a few leadership roles at The Cannon, and a several other co-founders and C-level execs. Following strategic growth and several acquisitions, the Houston e-commerce software provider now employs over 300 people and has raised around $150 million in venture capital. The suite of software services includes everything a company needs — from managing a storefront to collecting important data and metrics.

"Our platform is really geared toward ambitious companies that have their foot in the door, have sales, and have product-market fit, and now need to level up," says Tonar on this week's episode of the Houston Innovators Podcast. "E-commerce as an industry is highly fragmented — you have so many players, but they don't play well together. Through our end-to-end offering, we are bringing all these things together."

Described as a competitor to Amazon, Cart.com connects the dots for e-commerce companies, and, in fact, works alongside Amazon, too. While Cart.com clients can use the suite of software services to create their own shop, ship out of Cart.com's distribution centers, etc., they can also list their products on Amazon too.

"I like to view Amazon as co-op-etition. We can coexist with Amazon," Tonar says. "We're not antithetical to Amazon. We're not mutually exclusive. We can work with folks who are selling on Amazon to build their direct-to-consumer business, and we are doing that today."

And business are indeed looking for that help, Tonar says on the show. He describes the marketplace as a bit of a monopoly between Amazon, Walmart, and some other players that are essentially squeezing out small or even mid-market companies that can't compete with these larger companies. Walmart and Amazon have the scale necessary to control the end-to-end marketplace, and very few companies have that, Tonar explains.

"Now Cart.com has done the hard work and spent the money to go out and aggregate all of these capabilities. The difference is, we aren't hoarding them. We're offering them as services," he says.

Heading into the holidays, where potential new clients will be focusing on delivering on orders and sales, Cart.com is expecting a busy 2022 in terms of growth. In a lot of ways, the COVID-19 pandemic played a major role in the development of e-commerce and, by extension, Cart.com.

"The pandemic has played a role in overall accelerating the growth of ecommerce as a category and an industry. That growth was going to happen anyways, but it made it more ubiquitous faster," Tonar says. "It's just commerce now. This is just how people purchase and consume things."

Tonar discusses what else you can expect to see from Cart.com in terms of growth, more fundraising, and more. He also shares how he's observed the Houston innovation ecosystem grow over his years in the business. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


2 Houston startups announce new execs to their leadership

short stories

A pair of Houston tech startups have recently announced new appointments to their leadership staff. An e-commerce company has a new chief people officer and a blockchain company named a new president to lead commercialization.

Meet Cart.com's new C-suite hire

Sara Patterson is a human resources veteran. Photo courtesy of Cart.com

Houston-based Cart.com, an end-to-end ecommerce services provider, appointed Sara Patterson as chief people officer. She will lead all aspects of the company's talent acquisition and employee experience of the fast-growing startup.

As the company grows its team and its ecommerce-as-a-service platform, it's Patterson job to forge a strong, unified culture and develop a compelling talent acquisition strategy to support continuing growth, according to a press release from Cart.com.

"Sara is one of the most accomplished and experienced HR leaders in the business. She has a real gift for talent management, and unrivaled expertise driving success for fast-growing companies across a wide range of industries," says Omair Tariq, CEO of Cart.com, in the release. "Her experience and dedication are exactly what we need as we forge a unified workforce to support our end-to-end ecommerce platform. After all, we aren't just growing our workforce at record speed. We're also building a unified culture and delivering incredible employee experiences to ensure that our entire team — from office workers to warehouse pickers — can stay laser-focused on our core goal of helping ecommerce brands to thrive."

She has three decades of experience in human resources, including serving as CPO of Lemonade, which included managing over 500 employees. She also worked as vice president of HR and head of talent management at Walmart eCommerce, which had more than 15,000 employees. She has also held senior leadership positions at Bonobos, Tribune Media, Conde Nast, Coach, and Gilt.

"People are the key to success for any growing company, and I'm thrilled to be joining one of the fastest-growing and most transformative companies in the ecommerce space," Patterson says in the release. "Cart.com's leaders have made it clear that they see a strong culture as the key to lasting success, and I couldn't agree more. I'm delighted to be joining such a talented team, and supporting their continuing mission to unlock scalable growth for ecommerce brands."

Here's who will lead commercialization for Topl

Tim Marx has transitioned from adviser to employee at Topl. Photo courtesy of Topl

Tim Marx has joined Topl as president, the company recently announced. Marx will lead Topl's commercialization efforts and scaling. He previously supported the blockchain company as adviser.

A Fulbright Scholar, Stanford MBA, and former Boston Consulting Group partner and managing director, Marx has consulted on the ground in more than 20 countries, including those of Latin America, Europe, and Asia. He will continue to support Baird Capital as a venture partner, which he has since 2018.

"My overall thesis for getting involved in Topl is that I finally saw a really solid business use case versus a classic solution looking for a problem to solve," Marx says.

To learn more about him, read his recent Topl team member blog.

Houston leads Texas in most Californians relocating from this county, says new study

GOLDEN STATE TO LONE STAR STATE

The Hollywood-to-Houston population pipeline is overflowing, a new study suggests.

Harris County ranks as the No. 1 destination for people relocating to Texas from California, according to a StorageCafé data analysis. The No. 1 place of origin? Los Angeles County, home to Hollywood.

Among California counties, Harris County attracted the most new arrivals from Los Angeles County in 2019 (3,263), followed by San Diego County (840), and Riverside County (698).

Why are Californians swapping the West Coast for the Gulf Coast? A prime reason appears to be housing costs. The analysis shows the median price difference in 2020 between a home in Los Angeles County and a home in Harris County was $482,010. And even though they're paying less for a home in Harris County, L.A. transplants are gaining a median 577 square feet in additional space.

"When housing prices in California go up, so does migration to Texas. When housing prices in California go down, migration to Texas goes down as well," William Fulton, director of Rice University's Kinder Institute for Urban Research, tells StorageCafé, a self-storage platform.

Looking at the California-to-Texas connection, Los Angeles County holds the top seven spots in the ranking of counties that send the most new residents to our state. Here are the top seven:

  1. Los Angeles County to Harris County (3,263 new residents in 2019).
  2. Los Angeles County to Dallas County (2,492 new residents in 2019).
  3. Los Angeles County to Travis County (2,060 new residents in 2019).
  4. Los Angeles County to Collin County (1,609 new residents in 2019).
  5. Los Angeles County to Tarrant County (1,374 new residents in 2019).
  6. Los Angeles County to Bexar County (1,366 new residents in 2019).
  7. Los Angeles County to Denton County (1,290 new residents in 2019).

"Elon Musk is well on his way to being the first human on Mars, but he's far from being a pioneer when it comes to moving to Texas. His recent move to the state is just one among the almost 190 daily moves from California to Texas that occurred from 2010 to 2019," StorageCafé says.

Here are the top 10 counties for new arrivals from all California counties in 2019:

  1. Harris County — 8,408.
  2. Dallas County — 7,923.
  3. Travis County — 6,725.
  4. Tarrant County — 6,623.
  5. Bexar County — 5,340.
  6. Collin County — 5,294.
  7. Denton County — 4,028.
  8. Williamson County — 2,877.
  9. El Paso County — 2,521.
  10. Bell County — 1,727.
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This article originally ran on CultureMap.