A Houston investor is looking to target high-potential hardtech startups within the energy transition with his new venture studio. Photo via Getty Images

The way Doug Lee looks at it, there are two areas within the energy transition attracting capital. With his new venture studio, he hopes to target an often overlooked area that's critical for driving forward net-zero goals.

Lee describes investment activity taking place in the digital and software world — early stage technology that's looking to make the industry smarter. But, on the other end of the spectrum, investment activity can be found on massive infrastructure projects.

While both areas need funding, Lee has started his new venture studio, Flathead Forge, to target early-stage hardtech technologies.

“We are really getting at the early stage companies that are trying to develop technologies at the intersection of legacy industries that we believe can become more sustainable and the energy transition — where we are going. It’s not an ‘if’ or ‘or’ — we believe these things intersect,” he tells EnergyCapital.

Specifically, Lee's expertise is within the water and industrial gas space. For around 15 years, he's made investments in this area, which he describes as crucial to the energy transition.

“Almost every energy transition technology that you can point to has some critical dependency on water or gas,” he says. “We believe that if we don’t solve for those things, the other projects won’t survive.”

Lee, and his brother, Dave, are evolving their family office to adopt a venture studio model. They also sold off Azoto Energy, a Canadian oilfield nitrogen cryogenic services business, in December.

“We ourselves are going through a transition like our energy is going through a transition,” he says. “We are transitioning into a single family office into a venture studio. By doing so, we want to focus all of our access and resources into this focus.”

At this point, Flathead Forge has seven portfolio companies and around 15 corporations they are working with to identify their needs and potential opportunities. Lee says he's gearing up to secure a $100 million fund.

Flathead also has 40 advisers and mentors, which Lee calls sherpas — a nod to the Flathead Valley region in Montana, which inspired the firm's name.

“We’re going to help you carry up, we’re going to tie ourselves to the same rope as you, and if you fall off the mountain, we’re falling off with you,” Lee says of his hands-on approach, which he says sets Flathead apart from other studios.

Another thing that's differentiating Flathead Forge from its competition — it's dedication to giving back.

“We’ve set aside a quarter of our carried interest for scholarships and grants,” Lee says.

The funds will go to scholarships for future engineers interested in the energy transition, as well as grants for researchers studying high-potential technologies.

“We’re putting our own money where our mouth is,” Lee says of his thesis for Flathead Forge.

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This article originally ran on EnergyCapital.

Softeq has named three members to its executive team. Photos courtesy of Softeq

Houston tech company adds 3 members to its C-suite

growing team

A tech development company has expanded its executive suite with three new additions to its team.

Softeq Development Corp. has hired Craig Ceccanti as COO, Albert Esser as chief delivery officer, and Edwin Lemus as chief people officer. The new hires' roles were effective as of June 1. The Houston company, founded in 1997, creates hardware and software solutions for its clients. Softeq also runs a venture fund and studio for startups from around the world.

“With the significant growth of our engineering services business plus the addition of our Venture Studio and $40 million Venture Fund, we saw an opportunity to welcome new leaders with global experience and fresh thinking to continue evolving our business and scaling for the future,” says Christopher A. Howard, founder and CEO of Softeq, in a news release. “This is a huge investment in our team, and with the addition of these three leaders to our C-suite we will centralize our global leadership team in Houston while providing support and expertise to our team across 22 countries and clients worldwide.”

About the new executives:

  • Craig Ceccanti is a serial entrepreneur. He founded Pinot’s Palette and oversaw its franchise growth and exit before joining the founding team of sEATz — now Rivalry Technologies. The sports tech startup provides a mobile ordering software for stadiums, as well as hospital and hospitality destinations. Most recently, he founded and ran T-Minus Solutions, a custom software development company. As COO, Ceccanti will oversee the day-to-day operations of Softeq and work to improve internal and external processes.
  • With three decades of experience in tech and consulting at Daimler AG, GE, Emerson, Hilti, and Dell, Albert Esser will lead the delivery organization, which includes including solutions engineering, project management, and resource management. As chief delivery officer, he's tasked with expanding "the team’s capabilities and agility by adding to the global network of consultants," per the release, as well as leading Softeq's adoption of emerging new technologies like IoT, AI/ML, vision systems, industrial automation, robotics, cloud applications, and cyber security.
  • Edwin Lemus has 22 years of talent-related experience, and, as chief people officer, he will continue to grow the Softeq team and build a company culture for the workforce that stretches across 22 offices around the world.

Softeq Venture Studio launched over a year ago with its inaugural cohort in 2021, and the fund was launched last year. The latest cohort was announced in March.

Cloudbreak Enterprises is getting in on the ground level with software startups — quickly helping them take an idea to market. Photo via Getty Images

Unique Houston-based venture studio looks to double portfolio in 2021

startup support

Lauren Bahorich is in the business of supporting businesses. In February 2020, she launched Cloudbreak Enterprises — B-to-B SaaS-focused, early-stage venture studio — with plans to onboard, invest in, and support around three new scalable companies a year. And, despite launching right ahead of a global pandemic, that's exactly what she did.

Bahorich, who previously worked at Golden Section Ventures, wanted to branch off on her own to create a venture studio to get in on the ground level of startups — to be a co-founder to entrepreneurs and provide a slew of in-house resources and support from development and sales to marketing and administration.

"We start at zero with just an idea, and we partner with out co-founders to build the idea they have and the domain expertise and the industry connections to take that idea and built a product and a company," Bahorich says.

Bahorich adds that there aren't a lot of venture studios in the United States — especially in Houston. While people might be more familiar with the incubator or accelerator-style of support for startups, the venture studio set up is much more intimate.

"We truly see ourselves as co-founders, so our deals are structured with co-founder equity," Bahorich says, explaining that Cloudbreak is closer to a zero-stage venture capital fund than to any incubator. "We are equally as incentivized as our co-founders to de-risk this riskiest stage of startups because we are so heavily invested and involved with our companies."

Lauren Bahorich founded Cloudbreak Enterprises in February of 2020. Photo courtesy of Cloudbreak

Cloudbreak now has three portfolio companies, and is looking to onboard another three more throughout the rest of the year. Bahorich runs a team of 15 professionals, all focused on supporting the portfolio. While creating the studio amid the chaos of 2020 wasn't the plan, there were some silver linings including being able to start with part-time developers and transition them to full-time employees as the companies grew.

"Within the first month, we were in shutdown here in Houston," Bahorich says. "But it's been a great opportunity for us. Where a lot of companies were pivoting and reassessing, we were actually able to grow because we were just starting at zero ourselves."

Cloudbreak's inaugural companies are in various stages and industries, but the first company to be onboarded a year ago — Relay Construction Solutions, a bid leveling software for the construction industry — joined the venture studio as just an idea and is already close to first revenue and potentially new investors. Cloudbreak is also creating a commercial real estate data management software and an offshore logistics platform. All three fall into a SaaS sweet spot that Bahorich hopes to continue to grow.

"We are looking to replace legacy workflows that are still performed in Excel or by email or phone," Bahorich says. "It's amazing how many opportunities there are that fit into that bucket — these high-dollar, error-prone workflows that are still done like it's 1985."

Given the hands-on support, Bahorich assumed she'd attract mostly first-time entrepreneurs who don't have experience with all the steps needed to launch the business. However, she says she's gotten interest from serial entrepreneurs who recognized how valuable the in-house support can be for expediting the early-stage startup process.

"What I'm realizing is a selling point is our in-house expertise. These founders are looking for technical co-founders," Bahorich says. "We can both provide that role and be capital partners."

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Houston researchers develop breakthrough device that could bypass spinal injuries

breakthrough research

Scientists at Houston Methodist have announced a significant leap forward for spinal cord injury recovery.

The researchers have developed a device that essentially bypasses spinal injuries, allowing signals from previously “lost” functions to reach the brain, a new study published in Nature Communications shows.

“Most current technologies try to improve whatever function remains after a spinal cord injury,” Dr. Damiano Barone, assistant professor of neurosurgery in the Department of Neurosurgery at Houston Methodist and co-lead on the study, said in a news release. “Our goal is different. Rather than fixing the injury itself, we want to bypass it completely and create an alternative route for signals to travel.”

The study involved a single ultrathin circumferential electrode array made to conform around the spinal cord without penetrating neural tissue, which was implanted into rodent and pig models with spinal injuries. The electrode array was able to interpret motor, sensory and autonomic signals around the injury. Think of it as a set of detours that restore road access to isolated towns after a disaster destroys the highway instead of just rebuilding the highway.

Over the course of three days, the arrays detected signals of intended movement from low-frequency spinal oscillations with more than 94 percent accuracy. This worked across species and was replicated in feasibility studies on human cadavers.

This research could serve as a new foundation for neuroprosthetic implants that could restore connectivity to the 2.5 million people worldwide suffering from spinal injuries that result in loss of ability. Future development could result in everything from restored organ function to mobility, according to Houston Methodist.

George Malliaras, the Prince Professor of Technology in the Department of Engineering at the University of Cambridge, who co-led the study, sees it as a fundamental restructuring of the science of spinal trauma.

“This could represent a paradigm change in how we think about spinal cord injuries,” Malliaras said. “Instead of starting from the idea that what is lost is gone forever, this approach asks whether we can restore function by carrying the signal around the injury.”

Further work involving laboratory models will need to be completed before launching human trials.

Grants from the National Institutes of Health, Houston Methodist Katz Investigator Award, Helaers Research Award and the Engineering and Physical Sciences Research Council helped support the study. Other collaborators on the study include Salim Hadwe, Ruben Serrano, George Psaltakis, Margaux Forner, Chaeyeon Lee, Sydney Swedick, Moleca Ghnnam, Tawfique Hasan and Alejandro Carnicer-Lombarte from the University of Cambridge; and Anton Banta and Xueer Zhang from Houston Methodist.

Abbott assembles expert team to help lure U.S. Space Academy to Texas

space race

State Rep. Greg Bonnen of Friendswood has been tapped to lead a new team that will promote Texas as the future home of the U.S. Space Academy.

Bonnen, a neurosurgeon, chairs Houston Physicians’ Hospital and the powerful Texas House Appropriations Committee. His House district is close to NASA’s Johnson Space Center.

Gov. Greg Abbott appointed the seven-member team. Last month, President Trump signed an executive order establishing the Presidential Commission on the U.S. Space Academy. Commission members, who held their first meeting this month, will recommend a permanent location for the academy.

Texas officials are pushing a site near Johnson Space Center to host the academy. Alabama, Colorado and Florida are among Texas’ competitors.

In a joint statement, U.S. Sen. Ted Cruz and U.S. Rep. Brian Babin, both of Texas, issued a statement backing the state’s bid for the academy. Cruz lives in Houston. Babbin lives in Woodville, about 55 miles south of Beaumont.

“America’s space program is built across the country, but Texas is where the pieces come together,” the lawmakers said. “We are ready to lead the next generation of space pioneers and look forward to showing why Texas is the right home for the U.S. Space Academy.”

The academy’s curriculum will include technical education, leadership development and public service components. Graduates will be set up for careers in the U.S. military, civil service, and aerospace sectors.

The Abbott-appointed team will work with the Texas Space Commission to prepare the state’s proposal for the academy.

In addition to Bonnen, team members with ties to Houston include:

  • Robert Ambrose, who grew up in Houston. He worked at Johnson Space Center before becoming associate director of the Texas A&M Space Institute.
  • Former NASA astronaut Nancy Curry-Gregg, director of the Texas A&M Space Institute. She earned a doctoral degree from the University of Houston and previously worked at Johnson Space Center.
  • Former NASA astronaut Jack Fischer, senior vice president of Houston-based Intuitive Machines. The company builds spacecraft, delivers payloads to the moon and launches satellites.

“Texas is the home of America’s human spaceflight program,” Abbott said in a release. “No state can match what Texas brings to this mission.”

“NASA’s Johnson Space Center, world-class universities, a premier commercial space industry, major military installations, and an unmatched aerospace workforce give Texas every asset the United States Space Academy requires,” the governor added.