50 Cent's Houston entrepreneurship program wraps with $500,000 investment into student-founded companies

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For the second year, Curtis Jackson's program supported Houston student entrepreneurs. Photo courtesy of G-Unity

The 50 Cent-backed high school entrepreneurship program wrapped up its second year of operation after helping over 100 Houston-area students build their small business plans.

G-Unity Business Labs, sponsored by Curtis James Jackson III — better known as 50 Cent — and Horizon International Group, allowed participants to build their own small businesses from the ground up. This year's cohort featured a variety of businesses, from a Caribbean hot dog food truck to a financial literacy course on personal finance.

In its second year, the program encouraged innovation and taught business acumen to entrepreneurial-minded high school students, culminating in an opportunity to create their dream companies. During this 28 week entrepreneurial internship program, around 150 students from Madison, Worthing, Yates, Kashmere, Booker T. Washington, and Wheatley high schools learned how to transform an idea they were passionate about into a full fledged product they can pitch to investors.

The after-school program consists of three stages – the first 20 weeks are about getting familiar with business concepts and building connections with peers and teacher volunteers. The next eight weeks are spent in the incubation phase as students are split up into teams and local entrepreneurs lead lessons, helping them workshop their ideas into a fleshed out corporation, before finally the teams compete in Hustle Tank, where students pitch their ideas to a panel of celebrity and entrepreneurial judges. At the event in May, the panel included 50 Cent and Mattress Mack. The five winning teams are now eligible to split $500,000 in seed money for their companies.

Summer Reeves, VP of design of Umbridge, is in charge of managing the incubation phase and said she has noticed a significant shift in the ideas the student groups have come up with between the two cohorts of the program; the first year saw flashier tech pitches. But during the second year of the program, Reeves said the students sought to address issues they see in their day-to-day lives, including a group who worked to develop support services to aid formerly incarcerated individuals after they are released.

“This year, a lot of students were more on the practical side,” Reeves tells InnovationMap. “We actually had three teams that were focused on mental health apps which I think is a great example of what youth today are really focused on.”

Reeves started off as a mentor to four teams during the incubation phase of the program last year providing students with guidance on how to set up their business plans, create prototypes, and pitch their companies to investors. After three of her teams won the Hustle Tank competition previously, she took over planning the incubation phase and recruiting other local entrepreneurs to act as mentors.

“We give them recommendations on how to pitch and how to frame their pitch but they also have the ability to get creative so we had some students who did short skits — some that did raps and spoken word type things — lots of creativity,” Reeves says.

Patrice Allen, senior manager of G-Unity Business Labs, said they use the students’ individual strengths and creative thought processes to place them into their teams, including asking them in interviews at the beginning of the year to try to sell her a pen to understand their pitching process.

“That’s the question the students always remember,” Allen says. “‘Sell us this pen or pick something out and sell it to us.’ It’s the weirdest thing and they love it.”

In building the teams at each school, Allen worked with educators to make sure every team had students with a variety of communication and planning skills as well as financial awareness. But Allen felt students were most successful when they incorporated their personal interests into their product design. The first place team of Hustle Tank, Caribbean Hot Dog Boyz, was especially emblematic of this mindset as they combined one member's background of selling hotdogs with another’s Caribbean heritage to create a food truck that sells the unexpected combo of oxtail hotdogs.

The first place team of Hustle Tank 2023 was Caribbean Hot Dog Boyz. Photo via @gunitybusinesslab/Instagram

“To actually taste the food that they prepared was phenomenal,” Allen says “I have never ever thought that oxtails on a hotdog would be good but everybody was floored.”

Elizabeth Martin, director of communications and marketing for Horizon who runs the behind the scenes of funding, said students from the winning teams are now working on solidifying their business plans to qualify for the funds from the G-Unity foundation to develop their companies. Martin also said 50 Cent will retain a relationship with these teams, acting with varying levels of involvement depending on his deal with the students as anything from a silent partner to an investor.

“They do not walk home with $500,000 in their back pocket,” Martin explains. “We are investing in (them) — not giving — it’s an investment.”

The future of this program is uncertain as the Texas Education Association’s takeover of HISD is still in its transition phase but Martin advised to keep a lookout for an ABC Nightline interview of 50 Cent discussing G-Unity Business Labs, which is expected to release soon.

"I’ve spent years donating my time and energy to communities in need. I started G-Unity to do the same—to give back to kids so they have it a little easier than I did," Jackson writes on the website. "Team building and entrepreneurship are skills I learned along the way, but they are so important to develop early. I look forward to G-Unity supporting programs that are doing the crucial work of teaching kids to excel at life.

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Meet the innovator who's leveraging big tech to advance Houston's ecosystem equitably ›

3 Houston innovators to know this week

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Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — from energy to design innovation — recently making headlines in Houston innovation.

Allie Danziger, co-founder and CEO of Ampersand Professionals

The ongoing trend of businesses struggling to onboard new employees is likely going to continue through the new year. Allie Danziger shares what you need to know. Photo courtesy of Ampersand

The Great Resignation is among us, and companies need to respond accordingly, Allie Danziger, CEO and co-founder of Ampersand Professionals, writes in her guest column for InnovationMap.

"It has been particularly difficult to hire and retain Gen Z employees, the newest generation in the workforce, as we navigate the expectations of these employees, as compared to past generations," she writes. "Fortunately, businesses can bounce back from 'The Great Resignation' or protect themselves before they experience a similar mass exodus by taking the time to understand employees' preferences and motivations, and make a few small changes accordingly."

Danziger shares four tips with hiring and retaining talent in this challenging time. Click here to read more.

Jane Stricker, executive director of the Houston Energy Transition Initiative at the GHP

The former BP executive will lead Houston's role in the energy transition as the executive director of the Houston Energy Transition Initiative, a brand new position at the Greater Houston Partnership. Photo courtesy of GHP

Jane Stricker, a longtime Houston-based executive at oil and gas giant BP, has been tapped to be the executive director of the Houston Energy Transition Initiative and senior vice president of energy transition.

The Greater Houston Partnership unveiled HETI in June. As the partnership explained then, HETI "aims to drive sustainable and equitable economic growth in the Greater Houston region through a portfolio of technology, policy, and market initiatives that scale and export solutions for realizing a low-carbon energy world."

"This is an exciting time for Houston and our energy ecosystem as we focus our efforts on leading the global energy transition," Stricker says. "The challenge of our lifetime is addressing this dual challenge of meeting increased global energy demand while confronting global climate change. Houston is known for solving problems that matter. I believe through innovation, collaboration, and focus, our region can lead the way and deliver solutions that change the world." Click here to read more.

Summer Reeves, director of Accenture's Houston Fjord studio

Summer Reeves says Houston is changing for the better when it comes to attracting design talent. Photo courtesy of Accenture

The winds have changed in Houston when it comes to attracting design talent, Summer Reeves — the director of Accenture's Houston Fjord studio — says on last week's episode of the Houston Innovators Podcast. Reeves is currently responsible for growing the team of Accenture's new Houston Fjord studio. She say she's excited for the way the design industry in Houston has developed. It's been second chair to Austin on the Texas landscape, but that's changing.

"There's a reason why Accenture is building a Fjord studio here in Houston — and now, versus in the past," Reeves says.

She describes Austin employers overly competitive for designers — making it hard to attract and retain design talent. This has caused a wave of designers coming to Houston. She's also seeing Houston employers — mostly in the energy industry — shift their thinking in hiring these types of positions. Click here to read more and stream the episode.

Summer Reeves, the director of Accenture's Houston Fjord studio, says Houston is changing for the better when it comes to attracting design talent. Photo courtesy of Accenture

This expert shares why Houston has a bright future as a design-led innovation city

Houston innovators podcast episode 110

When you think of design in terms of the role it plays in innovation and technology, you might picture a graphic designer or maybe one step in a product's path to market. But for Summer Reeves, design is an integral part of the entire innovation process.

"When people think about design, they think about visual design — UX/UI digital products," Reeves says on this week's episode of the Houston Innovators Podcast. "But what we do from a service design or, what I like to say, a holistic design approach is very different."

Reeves is the director of the Houston Fjord studio — which operates under Accenture Interactive. She's currently standing up the new studio in Houston, which has iterations across the world from Austin and New York to Barcelona and Singapore. The new studio in Houston will help Accenture clients think through the design of their solutions, rather than jump the gun on deploying a technology.

"We want to be a design-led company," Reeves says. "Fjord is what I call the tip of the spear of what we do."

Fjord's design team focus on understanding the root cause of the problem, who's impacted, and what the scale of the solution should be. On the podcast, she gives the example of a coffee shop that wants a mobile app to engage with customers. Reeves says rather than just creating the app, Fjord would look at what the customer wants via surveys and observations.

"It's human nature to jump to solutioning," she says, "but we need to do research to make sure that's the right call."

Reeves is currently responsible for growing the team of the studio — something not too unfamiliar to her. She was instrumental in setting up Accenture's Houston Innovation Center. She say she's excited for the way the design industry in Houston has developed. It's been second chair to Austin on the Texas landscape, but that's changing.

"There's a reason why Accenture is building a Fjord studio here in Houston — and now, versus in the past," Reeves says.

Reeves shares more on the intersection between design and innovation — as well as how COVID-19 affected consulting — on the podcast. Listen to the full interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.

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Houston medical robotics startup announces $42M series C

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A Houston medical device company that's tapping into robotics technology for the operating room has just announced a major chunk of fresh funding.

EndoQuest Robotics Inc. announced that it has closed a $42 million series C to advance its robot technology that's targeting endoluminal and gastrointestinal minimally invasive procedures. Returning investors, CE Ventures Limited and McNair Interests, and new investor, Puma Venture Capital, led the round of funding.

"Our investors share our vision of leveraging robotics to redefine the possibilities in minimally invasive procedures," Kurt Azarbarzin, CEO of EndoQuest Robotics, says in a press release. "This financing enables us to continue innovating and refining our technology, ultimately improving patient care and transforming the future of endoluminal interventions."

The funding will go toward continued research and development, regulatory initiatives, commercialization, and other key initiatives. Dr. Vipul Patel, the co-founder and senior venture partner of Puma Venture Capital, is a robotic urologic surgeon and sees potential in EndoQuest's technology.

"I've had the privilege of seeing just about every robotic surgical system either in development or on the market today and can honestly say that EndoQuest's system is a true game changer for both physicians and patients," Patel says in the release.

Founded in 2017, EndoQuest's robotics technology has not yet been cleared by the FDA and is not for commercial sale in the United States.

"The EndoQuest team is trailblazing novel solutions in minimally invasive surgery," Neeraj Agrawal, executive director of Crescent Enterprises, the parent organization to CE Ventures Limited. "We welcome our new partners, and remain fully supportive of the Company and the prospects to transform healthcare with our innovative endoluminal surgical platform."

EndoQuest Robotics is targeting endoluminal and gastrointestinal minimally invasive procedures. Image via endoquestrobotics.com

Houston expert: How to build startup runway in a choppy venture funding market

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The venture funding market in 2023 has been very tough.

The number of rounds closing is significantly down from the 2022, and a record number of companies are raising. Overall VC fundraising is down, but great deals are getting funded well and at good valuations, while many are struggling. Fewer new investors are writing lead checks and being more cautious when they do, later stage investors are shifting earlier stage to manage risk, bad cap tables, operating plans, and reluctant insiders are killing otherwise good deals, and everyone is working on ensuring their portfolio is in good shape.

This is just another venture cycle. The sky is not falling, the playbook for this cycle was written long ago. But if you are a founder, you may need to take action. If you are less than 15 months of runway, it’s time to go to your investors with a plan. You need to either be well on your way to closing a round, starting your fundraise if the company is ready, know your investor group’s plan to bridge or do an inside round if necessary and what you need to achieve to unlock that, or bring them a realistic plan yourself to get to 18 to 30 months of runway. But whatever you need to do, you need to do it now.

The runway plan

The core of a good runway plan is building a cash wedge by taking a little from everywhere, and drop margin and cash. A little revenues, a little in pricing, a little headcount reduction, a little insider capital, a little new capital, and a little balance sheet help. How much a little is, depends on your own dynamic. The secret to a good cash wedge runway plan is starting early, and doing it now. Every day of delay increases the depth of the changes needed for the same runway – until you reach a point where the brutal burn math just doesn’t work, and the changes become costly or even untenable.

Focus on your customers. Nothing cures runway or fundraising ills like revenue. You’ve built these relationships for a reason. They are taking your calls because they care. If you and your team aren’t spending most of your time with customers right now, you are doing it wrong. Good customers get it. Focus their attention on how your product makes them money, and how much. Support their internal efforts to grow the account. Open book it, raise prices if it makes sense, and ask for more volume or contract extensions at good prices if you can’t. With new customers, focus on getting more phase ones that fit in the budget your champions have available quickly. Bet you and your customer can find more budget later when you’ve demonstrated value to them. Bid every grant and non-dilutive source that makes sense, which builds leverage for yourself and your investors.

Burnmatters. In a tight market, no one likes to buy burn, and demonstrating efficiency of revenue and backlog relative to capitalization and burn level matters. If you’re going to cut (and you probably should), cut much deeper than you think, and do it now. You ran this company when it was four people and no money, you can do it again if you really had to. Start making quick decisions about what you can defer and cut in the near term, there is always an easy 5 to 10 percent of costs you can cut and push to next year, and often a few points that can be pulled from supply chain deals. Overplan for growth, but don’t release to spend until your capital markets plan is clear.

Rebalance your spend. Shift your cost structure and organization chart forward towards the customer. Aggressively expand customer facing lead generation, guerilla marketing, applications engineering and direct sales efforts, at the expense of internally facing ones like R&D, manufacturing, and overhead. Repurpose people, change comp structures, job descriptions, or adjust costs and headcount. Get your team on board with the focus and where your runway is. A 12-person startup has about 2,000 labor hours a month to throw at its problems, 3,000 hours on overdrive, when your runway shortens, it’s time to hurl those at customers. Keep in mind, none of this is permanent, good startup organizations are elastic and in six months you can shift back or add again. You’re only really making 180-day changes here. That’s what the nimble startup means. It’s about runway and quick product and operational shifts.

Hit the balance sheet for cash. Depending on company stage and type, sell any underutilized assets and inventory, defer some capex, put someone on collecting AR and adjust your contract terms and pricing to pull forward cash flow, term out and negotiate payment terms on AP, leases and debt. One huge caveat. Do not take venture debt. Until you are profitable, venture debt does not actually create the runway in the real world that you see on paper, and has killed more good startups on the cusp of greatness. Venture debt is Lucy, runway is the football, and you are Charlie Brown.

Adjust your capital markets strategy. The classic rule is raise all you can when you can, because capital is available most when you need it least. But that’s not the whole story. And founders need to realize it is really dangerous to take a deal to market that is not ready, and doesn’t have the right level of insider support, is priced or structured wrong. While the market sets the price and terms, once you’ve a cap table full of investors, both new and existing investor appetite, and valuation, becomes a partial function of existing and new investor appetite and support. Take out a deal that’s not ready, or with too much burn, too little insider support, too high a last valuation, too large a convert or safe overhang or prior capitalization, too little team ownership, or too much valuation or cash need relative to its team, technology, TAM and traction (and cap table), and a founder and board can turn a good opportunity into a death spiral headed straight off a cliff, fast.

The "Magical 25" percent ratio. This is an art not a science, but the Magical 25 percent ratio on a prototypical startup will give you an idea of how powerful a Runaway Plan can be to get a deal done and reset a founder’s opportunity.

Imagine a middle of the road seed funded SaaS startup, burning $350,000 gross, with $100,000 in MRR, which has raised $3 million in cash from three investors and spent half of it. On its current trajectory it has six months of cash left, and is bankrupt by March. Market turned down, and the initial investor calls don’t result in a lead VC leaning in. The logic of burn rate math is brutal. In 90 days the company is on fumes, and it has no term sheet in hand, with the odds of getting one generally falling. And in today’s market the $1 million in ARR has become the new minimum not sufficient condition for fundraising, and the company will need to get farther on it’s A to be attractive to a B round investor. If the founder does nothing and waits 90 days they’ll be begging their investors for a bridge, and begging new investors for a flat round, and will likely end up with downround or an ugly insider bridge. At $250,000-a-month burn and no term sheet, within 150 days the founder will then need an inside round of between $4.5 and $6 million to get to the prototypical 24 month runway, or a $1.5 to $2 million bridge to buy enough more months to fundraise and build value. That’s 1.5x to 2x the capital raised, or over half the existing capital in a bridge, and puts intense pressure on strength of your cap table, growth rate, broad insider support, and quality of revenues in a tight venture funding market.

If the founder instead cuts costs 25 percent immediately, and then throws all hands on deck to find 25 percent more revenue — at this level of burn the startup probably has a team of at least 12 to 15 people, meaning the founder can throw at least 2,000-3,000 man hours in an all hands customer push in just the next 30 days if they had to. At the same time, the founder goes to his largest investors, walks through the cash and cost plan, and asks them to give him a term sheet for a seed extension with existing investors all kicking in 25 percent of their contribution to date, with the extension equal to 25 percent of the total capital at close. It can be papered fast and cheap. That adds $750,000, leaving the founder to find one new investor to join the insiders at the last price for 25 percent of the extension – a much easier ask of a new investor in a tough market, and probably one the founder has a couple of interested parties that have been watching, or certainly one of the founder’s investors can make a quick call to a friend to close. Brutal burn rate math has now become magical burn rate math and the company has 18 months of runway, has halved its net burn, and can additionally get away with half the A round equal to 1x the capital it has raised to date at the end of it if need be.

The "magical" part is the founder has now changed the odds for everyone – his team only has to find 25 percent revenues and costs. His insiders are only asked for 25 cents on the dollar support at a price they should love, leaving the typical fund with plenty of follow-on reserves after that, a new investor does not have to carry the lion share of the burn, set price, do as much dd, or worry about investor fatigue, and the insiders don’t have to go it alone and have external validation, and the founder has minimized their dilution, and their fundraising time. If the founder then is able to keep costs flat for just 6 months in a sprint and pick up another 25 percent in revenues, the runway at the current cashout date is still 16 months, and the company is set up well for its next round, with on $4 million in capitalization on nearly $2 million in ARR, a new investor with dry powder in the deal, and plenty of reserves left on the cap table to support the A, with a lot more traction – leaving the size of A round the company has to have at less than half the level of before, the effective revenue multiple insiders and new investors are facing halved, the burn the new investor had to buy halved and lots of time and options for the founder to drive value, dilution, and scale.

Founders, it’s your company. Your decision. Just be aware, how and how fast you play the tough decisions when the market shifts, changes the calculus for your investors, and their level of confidence and ammunition to back your future decisions. When you feel the market starting to tighten up, consider giving yourself, and your investors, some breathing space, then use that breathing space to drive value.

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Neal Dikeman is a venture capitalist and seven-time startup co-founder investing out of Energy Transition Ventures.

Houston entrepreneur launches platform for on-demand ordering with biz support for restaurateurs

it's chewtyme

While Ashley Loveless Cunningham has advised clients how to fix bad credit and build a healthy financial life for years, a look at her family’s own spending on food delivery came as a wake-up call.

Like a lot of busy households, they loved to order food through delivery apps, so much so that Cunningham realized it was time for a change. With the delivery charge and other fees that apps like DoorDash and GrubHub tack on, a food order can easily double in price. A $15 bowl from Chipotle that her son liked to order cost almost $40 by the time it got to the house — and that doesn’t even include a tip for the delivery driver.

“I thought, wait a minute. This is ridiculous,” she says.

She says she brainstormed, and began to look into ways to offer an alternative, not only for consumers, but for minority-owned restaurants that were struggling to keep their doors open.

So, Cunningham, whose business ventures include her financial literacy business New Credit Inc. and a perfume line, created her own app, ChewTyme.

The app launched in Houston and Atlanta last Friday, and has drawn over 3,000 consumer downloads, which Cunningham says is a “pretty good” start.

Cunningham, 40, a native of Mobile, Alabama, says she moved to Houston with her family ten months ago, drawn by the opportunity to grow their various businesses. And, the city’s vibrant food scene offered another avenue.

“Everybody moves here to open a restaurant,” she says of Houston.

Extra support on the side

Through restaurant owner clients of her credit counseling business, she learned that many were struggling to remain open. A lot of the business owners aren’t aware of the many options available to them, in business lines of credit, assuming their own personal financial credit is in good shape.

That’s where the business education side of the app comes in, where restaurateurs will gain access to “Business University,” financial guidance for their journey in the industry.

“I tell people, it’s not only about cash funding. There are other resources out there, things we need to thrive in the business space,” she says, adding that this includes mentorship and publicity services.

Many restaurant owners told her they partner with at least two or three food delivery apps already. But she thinks ChewTyme will stand out.

“A lot of people I’ve talked to, they just don’t know where to start,” she says. Her partnership with the restaurants would solve that issue, helping restaurateurs create a “full, state-of-the-art profile” that guides them every step of the way.

While she's yet to onboard her inaugural Houston restaurants, the app has begun to draw interest, Ashley says, especially from entrepreneurs who need a cheaper way to scale their business growth.

Cunningham says ChewTyme offers a competitive alternative to many third-party apps, which she says charge anywhere from a 20-22 percent commission on a restaurant’s delivery orders. The app will charge a 17 percent commission, with no monthly fee, and a flat $4.95 delivery rate to consumers, whom she plans to attract with discounts and promotions.

She hopes to initially sign up 25 restaurants in Houston and the same number in Atlanta, during the beta run of the app. As they work out the kinks, she feels confident in expansion.

Her biggest challenge moving forward is hiring quality drivers, she says.

“That really scares me. People who want to work, who have integrity. I’ve heard horror stories because people literally pick up their food and don’t deliver it,” she says.

ChewTyme is working with contracting partners who are conducting screening and background checks for potential drivers, and onboarding restaurant owners with follow-up. Interested restaurateurs or drivers can request more information on ChewTyme's website.

Tapping into a high-growth market

Third-party food delivery exploded in popularity during the pandemic, and a 2021 McKinsey report found that food delivery more than tripled since 2017. Post-pandemic, the on-demand services industry growth hasn't waned.

The Texas Restaurant Association fought for a law passed in 2021 to prevent third-party apps from adding restaurants to a delivery platform without a financial agreement or partnership, according to Christine Robbins, executive director of the association. But now that relationship seems to have settled into a profitable venture on both sides.

Taj Walker, of H-Town Restaurant Group, which owns Hugo’s, Xochi, and six other local restaurants, says the apps don’t typically charge a fee unless the restaurant takes part in an app’s ad promotion of their restaurant.

An app’s commission can range from 10 to 25 percent, he says, which their restaurants compensate for by charging 10 percent more on app orders than in-house food. The apps have become an important revenue stream for some H-Town’s more casual eateries, especially Urbe and Prego, which are popular among younger clientele, Walker says.

While Cunningham’s main goal is to uplift minority entrepreneurs and communities, the app will be available to any restaurateur who wants it.

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