Melting pot

Houston reported to have among the most minority-owned startups in the nation

Houston, named the most diverse city in the country, also has a strong representation of minority-owned startups. Photo by Tim Leviston/Getty Images

While Houston's population is considered diverse, the breakdown of startup founders doesn't necessarily follow suit. However, according to a new report, the city of Houston has among the highest percentage of minority-owned startups in the United States.

Using data from the U.S. Census Bureau's Annual Survey of Entrepreneurs, Volusion published a report naming the 15 cities with the most minority-owned startups, and the Houston, The Woodlands, and Sugar Land market ranked at No. 13. The city has 35.4 percent of its startups (3,697 startups) owned by minorities. While this percentage is enough to secure placement on the list, Houston's actual minority population is 62.8 percent, so the Bayou City still has room to close the gap.

According to Volusion's study, 15,673 people work at Houston's minority-owned startups and the gross sales of these companies ranges from $1 billion to less than $5 billion. The top industry for minority-owned startups is accommodation and food services.

"One of the major resources for minority business owners is the Greater Houston Black Chamber of Commerce, which offers a Business Readiness Training Program to help new entrepreneurs develop their skills," the report reads. "Although Houston is well-known for its petroleum and technology industries, minority-owned businesses are most active in accommodation and food services."

The Dallas, Fort Worth, and Arlington market ranks immediately ahead of Houston at No. 12 with the slightest edge of a fraction of a percentage. Dallas startups are 35.5 percent minority owned, making up 4,357 startups with 23,992 employees. Meanwhile, San Antonio and New Braunfels slides into the No. 6 spot on the list with 45 percent of its startups (1,534 companies) being minority owned and employing 4,160.

Five of the top 15 metros on this list are in California, and the top three markets are all in California: No. 1 San Jose-Sunnyvale-Santa Clara, No. 2 Riverside-San Bernardino-Ontario, and No. 3 Los Angeles-Long Beach-Anaheim. Each of the top three boasts around 50 percent of their startups being minority owned.

According to Volusion's report, the national trend is disproprotionate when you compare the markets' population diversity to its minority-owned startups. Chart via Volusion

All of the Texas markets have a higher percentage of minority-owned startups compared to the national average, which is 27.4 percent. According to the U.S. Census Bureau, almost 40 percent of the country's population identifies as nonwhite, and some estimates, predict the U.S. will be considered a "majority-minority" country by 2044.

According to Volusion, some of the aspects that are holding back these types of companies include lack of resources and access to capital.

"In fact, a recent survey by Morgan Stanley found that while eight out of 10 investors perceive the funding landscape as balanced, investments in minority and women-owned ventures fall short by as much as 80 percent," reads the report. "The researchers cite increased risk perception, as well as lack of access and familiarity with minority and women-led businesses as key drivers of what they coin The Trillion-Dollar Blind Spot."

According to another report, money isn't the city's biggest issue. Houston was named as an affordable city for startups in a national report last month.

In April, Houston was named as the most diverse city in the nation, and earlier this month, a report found that diversity was well represented in Houston's STEM industries.

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Building Houston

 
 

Calling all clean energy startups — Rice Alliance has announced a new accelerator launching in 2021. Photo via Getty Images

The Rice Alliance for Technology and Entrepreneurship has announced its new Clean Energy Accelerator — a 12-week program for early stage energy startups — at the close of the 18th annual Energy Tech Venture Forum.

"Houston truly is the hub of the global energy industry, and it is here where the next generation of energy leaders will create and scale innovations that will change the world," says Bob Harvey, president and CEO at the Greater Houston Partnership, in a press release. "The new Clean Energy Accelerator will build on that legacy and align with the work already taking place in Houston's robust energy innovation ecosystem."

The program joins Rice University's suite of business accelerating programs — including Owl Spark, the annual venture forums, and the Rice Business Plan Competition — and is being supported by Wells Fargo.

"The Rice Alliance Clean Energy Accelerator is poised to increase the quality and quantity of clean-tech startups in the area, which benefits Houston but also has the potential to benefit the greater global economy," says Jenny Flores, head of small business growth philanthropy at Wells Fargo, in the release. "At Wells Fargo, we believe that climate change continues to be one of the most urgent environmental and social issues of our time."

The Clean Energy Accelerator — to be housed at The Ion when it opens — falls in line with the city of Houston's Climate Action Plan, which has a goal of making Houston carbon neutral by 2050.

"It's a very ambitious goal, and it's one the City of Houston, as a municipality, cannot do alone," Mayor Sylvester Turner says in the release. "Today's announcement of the Rice Alliance Clean Energy Accelerator is a great example of what we have been seeking to build in Houston, an innovation ecosystem that can develop creative solutions to address our toughest challenges."

More information is available online, and applications for startups will open in early 2021. The Rice Alliance announced several community supporters for the new accelerator, including BP, Chevron Technology Ventures, Equinor, ExxonMobil, NRG, Saudi Aramco Energy Ventures, Shell Ventures, Sunnova, Total, Tudor, Pickering, Holt & Co., Halliburton Labs, Houston Exponential, the Center for Houston's Future, and Greentown Labs.

"Houston is our home, and we are strong believers in our city," says Brad Burke, managing director of the alliance, in the release. "It is here that some of the greatest minds in energy are innovating. New technologies, many driven by startup companies, have enabled the U.S. to become energy self sufficient for the first time in history, but global energy needs are growing and changing. We need to apply that same entrepreneurial spirit and technology innovation to meet these challenges."


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