Author Archive for Josh Tabin

Oct3rd2008

Houston Startups in the News

Now that Ike is pretty much behind me, I’ve been able to catch up on a few things, mostly e-mail and blog posts. Here are a few items of note regarding Houston technology startups:

  • Houston-based MarineCFO, a developer of software for managing marine fleet operations, said last week that it has raised a Series A funding round. Amount of the investment was not disclosed. The round was led by EmergingISV Capital Partners, as well as undisclosed customers and individuals in the transportation and energy industry. MarineCFO said the funding will go to accelerate sales and marketing, plus towards new versions of the firm’s software (courtesy of Texas Tech Pulse);
  • Houston-based Ingrain, which develops technology used in the oil and gas exploration industry, said Thursday that it has raised $15M in a second round of funding for the firm. According to Ingrain, it received the funding from Energy Ventures, Shoaibi Group, Klaveness Invest AS, Kommunal Landspensjonskasse (KLP), and Stanford University, along with its executives. Ingrain is developing digital reservoir rock property measurement technology, which the firm says helps simulate fluid flow measurement in reservoir rocks, allowing oil and gas companies to better understand the potential of their reserves (courtesy of Texas Tech Pulse);
  • David and Mark of NutshellMail presented at TechCrunch50 last month. They received some great coverage from Forbes and apparently had some great introductions. Here is a writeup from IEEE Spectrum;
  • AlwaysOn announced its coveted GoingGreen 100 Top Private Companies Awards last month and named Houston-based and DFJ Mercury funded GlycosBio a category winner in Clean Manufacturing. GoingGreen is where cutting-edge greentech CEOs meet the movers and shakers from the biggest industries on earth. Green technology innovators are transforming the global energy, water, agriculture, transportation, construction, manufacturing, and resource recovery establishments. This two-and-a-half-day executive event features CEO presentations and high-level debates on the most promising emerging green technologies and new entrepreneurial opportunities. GlycosBio has acquired and developed a number of platform technologies which will attempt to reduce production cost with environmentally friendly technologies as an alternative to petrochemical-based manufacturing;

I’m sure that there were others…tell me what I missed.

Oct3rd2008

On credit, recessions and bailouts…

I personally cannot understand why so many people are taken aback by recent events in the capital markets. From my perspective, this is the only possible outcome from decades of failed oversight and unbridled expansion. Regardless of who or what you blame for our current mess, some new economic realities face entrepreneurs that are important to get your head around before making any rash moves with your startup.

The number one question that I have been asked as of late is what impact will this have on my ability to get access to capital for my startup? The short answer is that it will have an impact but to what degree depends on several factors. Here are some of my thoughts.

If you are seeking less than $1.5 million, which places you squarely in the angel investor space, the impact will likely be great. Angel investors allocate a portion of their investable assets towards stable and risky investments. Historically, stocks and bonds have been the stable investment vehicle of choice but with the amount of volatility in the markets, the typical allocation for an angel investor is on its head these days. But even this depends because not all angels are created equal. The typical angel investor nationally invests around $45,000 a piece; this type of angel will think harder about his startup investments in turbulent financial times.

The other type of angel tends to have enough wealth that they invest more like a venture capital firm (I call this group “superangels”). Superangels tend to be somewhat insulated from economic peaks and valleys and likely are not overly focused on macro conditions from an investment perpective. We’ll talk more about this group in a moment.

Those companies that are further along and looking to raise investment north of $3 million will see some impact but in unlikely places. Venture capital firms (and some “superangels”) tend to get a bit antsy when Wall Street struggles even thought that venture money is already committed and desperately seeking a good home (nice Fast Company article on this: hat tip to Jeff Cornwall). The impact will be felt in the diligence stage where your model may be discounted a bit more than usual to adjust for uncertain economic growth opportunities. In economic contractions like a recession, companies reduce spending which flows through the economy a limits revenue growth potential early on. Many times, you can spin this in your favor if you have a recession resistant (be careful about this…don’t kid yourself about what’s real) business model or if you are in a nascent market that will not likely start taking off for a few years anyway. Investing at the low points is always best (”Buy low, sell high.”)

One thing I advise all of my clients to do is not panic. I always say that good deals get funded and if yours doesn’t, it may not be as good as you think. Capitalism does not go into hibernation in rough times and opportunities abound for those with a strong stomach for the roller coaster.

I am curious, though…what are you seeing the market?

Sep10th2008

The Technology Center of West Houston & Katy Dock to Open Doors September 17th


Houston continues to demonstrate its focus on early stage technology startups with the launch of two additional supporting cast members: The Technology Center of West Houston and The Katy Dock.

The Technology Center of West Houston (TCWH), a Katy Area Business Incubator and Accelerator, has created an exciting new opportunity for early-stage technology companies in the Katy/West Houston area. The mission of the TCWH is to enable, launch and accelerate technology companies in Katy/West Houston and thereby create jobs and economic growth.

TCWH matches entrepreneurs and inventors with seasoned business professionals experienced in commercialization in several fields, including engineering, internet technology, hardware and software development, energy, medical related technology. Assistance is offered in strategy development, planning, capital funding, and professional areas. The TCWH is a joint initiative of the Katy Area Economic Development Council, HCC-Katy, Houston Technology Center, Smalley Institute at Rice University, JBMA, Inc., and the IP law firm of Patterson and Sheridan.

Along with the TCWH, West Houston will also be getting its first coworking facility with the Katy Dock. The Katy Dock allows Katy/West Houston area entrepreneurs, inventors, consultants, developers, and designers to work in a creative business atmosphere and successfully grow a company. The new Katy Dock facilities are available through the Katy Commerce Center. Professional advice, business mentoring and other consulting services are available through the onsite TCWH office. Pricing for Katy Dock starts at ‘free’ for once-a-week drop-ins to pricing levels for private desk space and dedicated offices. Warehouse, fulfillment and light manufacturing space is also available onsite, all at a fraction of the cost of traditional office leasing arrangements.

The grand opening for the TCWH and Katy Dock will be held at the new facility next Wednesday, September 17, 2008. Here are the details:

When
Wednesday, September 17th

Where
Katy Commerce Center
1773 Westborough Drive
Katy, Texas 77449 [map]

Pre-Registration
Jean Stout, Katy Commerce Center 281-206-0162

Program Agenda
4:00pm Site Tour - Katy Commerce Center / Katy Dock Coworking Site
5:00pm Networking - Exhibitors and Refreshments
6:15pm Panel Discussion - Funding and Financing Options for Small Business Growth
7:30pm Q & A + Closing Remarks
8:30pm Door Prize Drawing

Make a point of clearing your day to be at this grand occasion. You don’t want to miss being part of the incredible transformation that the greater Houston area is undergoing. I will see you there.

Sep10th2008

REBarCamp coming to Houston

Real Estate BarCamp Houston, TX

Real Estate BarCamp Houston, TX

If you know me well, you’ll know that I have a passion for collaboration and events like BarCamp. Mike Price of MLBroadcast.com has coordinated Real Estate BarCamp in Houston next month on October 22, 2008.

Taking directly from the site, REBarCamp is:

REBarCamp Houston is a gathering of minds and open format event where real estate and technology professionals can learn and share discoveries and trends happening in the business, and discuss the future of the industry.

BarCamp is open to anyone. And anyone who wants to can attend and host sessions.

I am a huge advocate of these specialized events. That is why I have been working with various groups around town to have a BioCamp and GreenCamp in Houston this year. Do you have an idea for a Barcamp-esqe event? Let me know if I can help.

Sep2nd2008

Houston Startup Happy Hour: Need Sponsors

We are lacking sponsors for this month’s happy hour happening this Thursday. Anyone interested please contact me via email at josh<at>startuphouston.

Aug24th2008

Save The Dates: BioCamp and GreenCamp Houston

BarCamp

Building off of the sucessful showing we had at BarCamp Houston 2008, we are announcing two additional “Bar-Camp” themed events: BioCamp Houston and GreenCamp Houston.

BioCamp Houston will be held October 11, 2008 at the Houston Technology Center from 9:00 a.m. - 4:00 p.m. BioCamp Houston is an informal, participatory, unconference BarCamp event to bring college/graduate students, postgraduate trainees, junior academic faculty, entrepreneurs, would be entrepreneurs and inventors as well as, technology champions from the Greater Houston area together to learn and network.

The conference will be focused on life sciences - biotechnology, medical devices, biomedical solutions, bioproducts and related topics. During the day there will be WiFi available, a catered lunch and great networking opportunities.

GreenCamp Houston will be held December 13, 2008 at a location still to be determined. GreenCamp Houston will be focused on all aspects of Green and Clean Technology and related topics. GreenCamp will discuss best practices for making a Global difference in energy conservation, material reuse and recycling and reduction of both personal and business waste.

You can sign up on both wiki sites under the attendees section. The wiki password is c4mp for both events. See you there. You can also follow news on both events via Twitter: BioCamp & GreenCamp. Facebook pages are coming soon.

Aug23rd2008

Shameless Plug: Avert Ye Eyes If This Bothers You

So I have wrestled internally about doing this, but times have gotten that I need to make a point of distinguishing my professional life from what I do for the startup community in Houston. I am often asked to meet with members of our community to provide an evaluation of their business, introductions into the community and ideas on capital connections. Given my involvement and influence in the community, I have been happy to oblige almost anyone who requests my time. Unfortunately, I need to alter my unwritten contract with you, the technology startup community, so that we are clear on the rules of engagement. I suspect that this may ruffle a lot of feathers, but this conversational medium that we operate in is about transparency, openness and frank dialog.

Let me start off by stating clearly that I enjoy meeting with each and every one of our readers, as often as I can. The energy I get from hearing about a new startup feeds me and keeps me excited about Houston and all the wondrous changes I see. My background has been in technology startup companies for years and I enjoy the environment tremendously. I originally moved to Houston back in 1995 to start a new life with my then girlfriend, now wife, and was surprised on the diversity that this city offered. After a brief, five year, stint in San Antonio, I came back to Houston amazed at what had changed (I even went downtown at night, something I never would have considered before I left). After a couple of years at another high growth startup, I decided a change was in order and branched out on my own.

When I started evaluating opportunities for myself, I recognized that there was a lack of strategic resources available to small-mid sized companies and even less to startups. Most companies are extremely capable at tactical analysis and decision making, but often are unable to bridge those tactics into strategic thinking. For example, the first client I picked up was looking at several potential acquisitions and assumed the best source of financing was mezzanine capital. After some discussion, I was able to convince them of the value they would give up with mezz and helped them secure debt from a senior lender in town that effectively saved them millions out of there own pockets. It is often that early stage companies use their CPA firms to advise them on financial matters and that is like asking your plumber to fix your pool. I have nothing against CPA’s and in fact, refer them often when issues of accounting and tax arise. However, most accounting is tactical and backward-looking. What I do is think about right now and the future and it is not something everyone is good at. I’m just lucky like that.

Today, I have clients from around the country who call on me for advice on capital allocation, economic analysis, capital sourcing, internal reviews and business plan development…among other things. Those roles range from advisory board member to contract chief financial officer and almost always are fee and equity based.

In Houston, I have been extremely generous with my time as you can often see me at Coffee Groundz or any number of Starbucks “holding court” with any number of startup visionaries. Startup Houston has been a fantastic vehicle for that and I only hope that we have provided enough value to the community to date. My current problem is that those demands for my time have become more than I can logistically handle and not forgoe cash flow which is important to my survival.

I am not sure how to address this because I really don’t want to stop meeting people. However, starting today, I will need to figure out a better balance and frankly, may even propose a fee based engagement to offer my service to companies that are in need of them and can afford to pay me for my time. This pains me to do, but I cannot continue to sacrifice my family’s financial stability to favor yours; being a good husband and father trumps everything that Startup Houston has to offer.

Bottom line is that I want to continue to hear from you and will meet with people as I can. What I suggest is that you contact me via email and let’s evaluate where you are and what your needs are before we sit down. I try to be a reasonable person and want to do the right thing.

I really dislike the idea of doing this post but am at a loss to see another way to communicate the rules of engagement that I need to follow going forward. Feel free to call me out and comment away. I welcome the feedback.

Best regards,

Josh Tabin, President of Mosaic CFO & Startup Houston Nutcase

Aug20th2008

OpenCoffee Tomorrow Morning at Coffee Groundz in Midtown

Houston Open Coffee ClubMarc Nathan and I have been so busy lately that we neglected to send out a notice for tomorrow’s Houston OpenCoffee Club meeting. Well, as they say, better late than never.

Marc and I will be at Coffee Groundz in Midtown tomorrow, August 21, from 8:00-10:00 a.m. and are looking forward to reengaging with everyone to get the monthly morning meetup back up and running again.

For those of you not familiar with the OpenCoffee Club, once a month on the 3rd Thursday of each month, local entrepreneurs, tech enthusiasts and investors come together over some java to talk about Houston, tech investing, trends and whatever else keeps you chatting. It is the first community event we started and is the foundation for everything we’ve done since.

We promise to get the mailing list and notifications back up and running again before next month’s event so send me your contact info if you’d like to be on the distribution.

See y’all tomorrow!

The Houston OpenCoffee Club is a joint event brought to you by Startup Houston and the Houston Technology Center.

Aug20th2008

Rice Alliance Event Calendar 2008-2009

Rice Alliance for Technology and EntrepreneurshipThe Rice Alliance for Technology and Entrepreneurship is a flagship Houston program designed to showcase both technologies and entrepreneurs from the Greater Houston Region through educational workshops, venture forums and the national recognized Business Plan Competition. Every event is well attended and manages to attract the best and brightest minds year after year.

I recognize that I am a little late on getting this out, but wanted to provide everyone with the upcoming schedule of events for the Rice Alliance:

  • 9th Annual Rice Alliance Kick-Off Celebration: Thursday, August 28, 2008, 5:30 - 8:30 p.m.
  • 6th Annual Energy & Clean Technology Venture Forum: Thursday, September 25, 2008, 9 a.m. - 5 p.m.
  • 6th Annual IT & Web 2.0 Venture Forum: Thursday, December 11, 2008, 9 a.m. - 5 p.m.
  • 8th Annual Nanotechnology Venture Forum: Thursday, February 12, 2009, 9 a.m. - 5 p.m.
  • 2009 Rice University Business Plan Competition: Thursday - Saturday, April 16-18, 2009
  • 7th Annual Life Science Technology Venture Forum: Thursday, June 11, 2009, 9 a.m. - 5 p.m.

The best way to make a point of being at each event is to become a Rice Alliance member, like me. I like all of the events, personally, but would rank the clean tech and nanotech as ones not to miss. See you there!

Aug16th2008

We’re Getting a Facelift…Now We Need a New Face

So we are deep into the site redesign and I figured a new logo would be warranted as well. Our current logo leaves much to be desired and I thought instead of having one person focus on it, I’d open it up to the entire creative community of Houston.

So if you want to take a stab at redesigning our logo, go ahead and send your submission to me via email (josh<at>startuphouston.com) or upload them as a comment to this post.

The winning designer will get full credit on our site and get free advertising on our site.

Deadline for submissions is August 31st.