Houston came in at No. 5 for best cities — with populations of more than 1 million residents — for startups. Photo by Tim Leviston/Getty Images

When it comes to cities with over a million residents, Houston's at the front of the pack, according to a new study. But, there's a catch.

Last month, Commercial Cafe rounded up the 20 top cities for early-stage startups and entrepreneurs, and Houston missed the list. Now, the commercial real estate blog has broken down the data into three top ten lists based on city size, and Houston has claimed the No. 5 spot on the list of cities with 1 million or more residents.

The study took into account education, affordability, startup financial success (calculated from Kickstarter data), millennial population growth, among other aspects. Houston in particular was called out for being the most affordable major metro and for having the third best startup survival rate.

"The city is home to the fourth-largest percentage of millennial residents out of the total population, and saw the fourth-largest growth in number of millennial residents," the report reads. "Houston ranked fifth in group for the share of population holding a bachelor's degree or higher in a tech discipline. The rate at which the number of such residents has increased placed Houston seventh for tech education growth."

Outpacing Houston on the larger cities were Dallas at No. 1, San Diego, California, at No. 2, San Jose, California, at No. 3, and Los Angeles at No. 4. San Antonio also made the list, coming in at No. 7.

Texas cities were sprinkled throughout the two smaller cities list. Austin came in at No. 1 for the cities with 500,000 to 1 million residents, as well as claimed the top spot in the best cities regardless of population. Fort Worth ranked as No. 10 on this mid-sized city list.

On the small cities list for metros with less than 500,000 residents, Arlington came in at No. 6 for its location and startup density. The city also made the top 20 regardless of size, sliding into the No. 19 spot. Dallas, which topped the large cities list, came in at No. 15 on the size agnostic list for top startup cities.

Recently, Texas was named a top city to start a company by personal finance website, WalletHub, based on similar statistics.

"[I]t's clear why Texas would come in at No. 1," Susan Davenport, senior vice president of economic development for the Greater Houston Partnership, says responding to that study. "These are all areas where the Lone Star State consistently excels and why Texas continues to attract both entrepreneurs and existing companies across industry sectors."

The new partnership will result in Capital Factory-branded space in The Cannon's new 120,000-square-foot innovation hub, which is expected to open next month. Courtesy of The Cannon

The Cannon and Capital Factory announce new Houston-based partnership

Teaming up

Two major players in the Texas innovation ecosystem are teaming up for a partnership in Houston.

The Cannon, which is expected to open its 120,000-square-foot space later this summer, announced a partnership with Austin-based Capital Factory, a tech accelerator. The partnership will give Capital Factory space in The Cannon to provide remote mentorship and local programming for its Houston-based companies for six months throughout the cohort.

This alliance allows for more collaboration between Houston companies and mentors and resources across the state.

"The Texas Startup Manifesto is about leveraging the entire Texas startup ecosystem while honoring the unique contributions of each city and region," says Gordon Daugherty, co-founder and president of Capital Factory, in a release. "We can't deliver on that vision in Houston without the help of local partners like The Cannon and their collaborative attitude really sets them apart."

Capital Factory recently entered the Dallas market with the opening of a location in partnership with The Dallas Entrepreneur Center.

This new office space will result in two new hires for Capital Factory — both will be responsible to advancing the Texas-wide program. A venture associate position will be created to recruit and educate local companies. The associate will also find potential investments for the accelerator's venture fund, which has already invested in several Houston startups, including Apartment Butler, Groupraise, Hypergiant, and Zenus Biometrics in 2018.

The second new hire will be a mentor coordinator to seek out new mentors — not necessarily in Houston, as mentors can access startups through a software platform.

Capital Factory's space in The Cannon will be a branded office complete with Cisco Webex video conferencing equipment, according to the release, so that local Capital Factory startups can connect to mentors across the state. As an added plus, the entrepreneurs can also have access to The Cannon community, and vice versa. Capital Factory will also host events at The Cannon.

"We're thrilled that this partnership with Capital Factory will connect Houston startups with more resources," says Lawson Gow, founder and CEO of The Cannon, in the release. "These companies will have a chance to join an incredibly valuable network, and in return, Capital Factory will have the opportunity to invest in Houston's booming startup scene and diverse talent pool." (Gow is the son of InnovationMap's CEO.)

Houston startups stand to benefit from this partnership, according to Aaron Knape, co-founder and CEO of Houston-based sEATz, who says he's already seen the benefit of the alliance.

"The Cannon and Capital Factory's partnership has proven to be a game-changing resource for us, giving our team access to Capital Factory's incredible Accelerator platform while allowing our company to remain in Houston and continue to receive all of the benefits of The Cannon's growing entrepreneurial community," Knape says in the release.

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Annual student startup competition in Houston names teams for 2024

ready to pitch

The Rice Alliance for Technology and Entrepreneurship announced the 42 student-led teams worldwide that will compete in the highly competitive Rice Business Plan Competition this spring.

The annual competition, known as one of the world’s largest and richest intercollegiate student startup competitions, will take place April 4 to 6 in Houston. Teams in this year's competition represent 35 universities from four countries, including two teams from Houston and four others from Texas.

Teams, made up of graduate students from a college or university anywhere in the world, will present their plans before 350 angel, venture capital, and corporate investors to compete for more than $1 million in prizes. Last year, teams were awarded $3.4 million in investment and in-kind prizes, the largest total awarded thus far in the decades-old competition after some investors doubled — or even tripled — down on investment awards.

The 2024 RBPC will focus on five categories: Energy, Cleantech and Sustainability; Hard Tech; Life Sciences and Healthcare Solutions; Digital Enterprise; Consumer Products and Services.

Invitees include:

  • AIRS ML, Imperial College London (United Kingdom)
  • Blaze Power, UCLA
  • ChiChi Foods, Washington University in St. Louis
  • CureWave Sciences, Rutgers University
  • CurveAssure, Johns Hopkins University
  • D.Sole, Carnegie Mellon University
  • Dendritic Health AI, Northwestern University
  • Dialysis Innovations, University of Michigan
  • FlowCellutions, University of Pittsburgh
  • HEXAspec, Rice University
  • HydroPhos Solutions, University of New Hampshire
  • Icorium Engineering Company, University of Kansas
  • Informuta, Tulane University
  • Kiwi Charge, York University (Canada)
  • Korion Health, University of Maryland, College Park
  • Limitless Aeronautics, Embry Riddle Aeronautical University
  • LiQuidium, University of Houston
  • Malleous, University of Pittsburgh
  • MesaQuantum, Harvard University
  • MineMe, University of Pennsylvania
  • NaviAI, Cornell University
  • NutriAI, Tufts University
  • OSPHIM, RWTH Aachen University (Germany)
  • Overture Games, Northwestern University
  • OX SOX, University of Georgia
  • Oxylus Energy, Yale University
  • Palanquin Power, University of Texas at Austin
  • Paradigm Robotics, University of Texas at Austin
  • Particle-N, University of Connecticut
  • Poka Labs, Harvard University
  • Power2Polymer, RWTH Aachen University (Germany)
  • ProPika, University of Arkansas
  • Protein Pints, Michigan State University
  • Samtracs, Oklahoma State University
  • Sancorda Medical, University of Texas at Dallas
  • Side Coach Sports, Baylor University
  • Socian AI, Rochester Institute of Technology
  • Somnair, Johns Hopkins University
  • TouchStone, University of California, Berkeley
  • Vita Innovations, Stanford University
  • WattShift, University of Chicago
  • ZebraMD, UCLA

The companies join more than 700 RBPC alumns that have collectively raised more than $5.5 billion in funding. More than 269 RBPC companies are in business or have made successful exits, according to the Rice Alliance's website.

Last year, Texas A&M-based team FluxWorks took home $350,000 and won the competition based on judges scores. The company's technology includes magnetic gears that are four times quieter than standard with 99 percent efficiency.

Sygne Solutions and TierraClimate, two Rice-led teams, won second and fourth places, respectively. Zaymo, from Brigham Young University, took home the most in investment dollars. Click here to see the full list of 2023 teams.

Texas is the No. 1 destination for Gen Zers on the move, study says

by the numbers

A new population analysis by real estate marketplace Zillow has pegged the Lone Star State as the No. 1 destination for adults born between 1996 and 2004 – also known as Gen Z.

Using data from the 2022 U.S. Census Bureau, the report identifies the Top 10 states to which Gen Zers are moving, and Texas was the runaway winner – far outranking No. 2 destination, California, with 76,805 Gen Z movers, versus California's 43,913.

Reasons for moving vary, but the report says young adults from 18 to 24 years old may prefer to live in states with high performing job markets, especially in a place like San Antonio where one of the nation's top employers resides. San Antonio is also a great place for remote work, according to estimations by Forbes.

Favorable weather also may play a factor in the high migration of Gen Z'ers, the report suggests. Texas' mostly year-round sunshine makes it more attractive to younger crowds who are looking for fun activities around the state, not to mention the advantageous impact on dating opportunities.

Other top states with high influx of Gen Z movers include Washington (No. 5), which added over 33,500 Gen Z movers in 2022, and Colorado (No. 6) with less than 31,000 new Gen Z residents.

Their least favorite destination was Michigan, and the Northeast also ranked poorly, with four New England states – Vermont, Rhode Island, New Hampshire, and Maine – all in the bottom 10.

State with a high cost-of-living like Washington, Colorado, and Virginia (No. 7) are places where young adults are more likely to have a bachelor's degree, work in tech, or serve in the military, according to Zillow principal population scientist Edward Berchick.

However, becoming a homeowner is much more difficult, as the report found 77 percent of the Gen Z workers in these states are renters.

"Gen Z movers are likely drawn to the job opportunities in these states, despite the higher costs of housing," Berchick explains. "They may also be in a stage of life where they're willing and able to be flexible in their standards of living while starting their careers."

The top 10 states for Gen Z movers are:

  • No. 1 – Texas
  • No. 2 – California
  • No. 3 – Florida
  • No. 4 – North Carolina
  • No. 5 – Washington
  • No. 6 – Colorado
  • No. 7 – Virginia
  • No. 8 – Illinois
  • No. 9 – Georgia
  • No. 10 – Arizona

The full report can be found on zillow.mediaroom.com.

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This article originally ran on CultureMap.