Venture Capital in Houston

Purva Patel, one of the journalists at the Houston Chronicle who ‘get it’ about emerging businesses recently wrote up an interview she had with Dennis Murhpree of Murphree Venture Partners: http://www.chron.com/disp/discuss.mpl/business/6489409.html#

Mr. Murphree is stalwart advocate of the VC community in Houston and has taught investment management at the University of St. Thomas and the venture capital course at the Rice University Jones Business school for several years.  In short, when he speaks, people listen and his opinion matters. Even though he is personally trying to bring more investment here, he laments the fact that there simply isn’t enough capital in Texas to support our high growth business and we have to outsource 85% of our capital out of state.

Below is the comment I left on the Chronicle website but the bottom line is that I believe:

We need more money and more focused money

These are exactly the kinds of stories Houston entrepreneurs need to hear – especially from someone who has established himself as a leader in the venture investment community over a number of years. Mr. Murphree is well-respected because he tells it like it is and knows what he’s talking about. ’85% of funding comes from outside our borders? That’s both a little bit sad and just a touch frightening when you think about the spirit of independence and bootstrapping that drives most Texas entrepreneurs. Of course we need more money and $100m in a seventh fund certainly helps this effort. We also need more diverse sources of that money, so that pool of capital is spread over a wider variety of ventures. Demonstrating to investors who are used to putting their capital in the ground (Oil) or on the ground (Real Estate) that there is also value in the Cloud (Internet) is a real challenge for software and internet related ventures, but it is getting a little better. Thankfully this environment has proven that many internet based startups require a lot less cash to get going than in the past, but they still need investors who have expertise in the space and the willingness to roll up their sleeves to help these new style of startups.

Marc Nathan
Director of Entrepreneur Development, Information Technology
Houston Technology Center