Startup Houston

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.

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

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