Garaizar Aims to Elevate Houston Angels’ Profile and Outreach

8/23/13Follow @angelashah

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a success fee. We decided to get rid of those fees.

The second strategic line is education. We have a lot of members who come from the energy sector, doctors, even real estate people, who don’t know about angel investing. We need to be making sure to provide an educational framework, and have specific mentors every time they come in. They will be assigned to another investor who will be mentoring them, to make sure they participate in every part of our investment process: screening, selection, due diligence and the deal-making part. I put them in touch with mentorship opportunities, then formal training. Last March, we did the first Texas Angel Education day at the University of Houston. We are also doing a lot of webinars, and we do that in collaboration with other networks. With [The Indus Entrepreneurs], we have the Texas Funding Forum. Also we do a training session for entrepreneurs to see what they need to know about what angels want when they invest in them.

The third strategic line is creating the verticals. Some members are solely interested in one kind of investment. They won’t even come to a meeting that has pitches that are not in their field of interest. We created the energy, life sciences, and tech and mobile sub-interest groups. For the tech/mobile group, we decided we wanted to create a seed fund. We don’t have that many members who invest in tech and mobile, and we believe it’s because they don’t know about this space. So we thought, let’s create a seed fund. It will be accelerated by [startup incubator Start Houston]. So when [companies] actually apply to HAN, our members will be comfortable because there is a track record. Before I was telling these startups to go to Austin because the city had a lot of knowledge there, and then maybe we would follow up. But now we want to own the process and make sure these kinds of companies know they can rely on us and they don’t have to go anywhere else.

For the energy subgroup, we already have [Houston's Surge Accelerator, launched in 2011 with funding from HAN], but we believe there are also other angel sweet spots for investing. The startups have to be capital efficient. We don’t have the money for very big energy deals. We have talked to [the Houston Technology Center’s] energy screening committee to vet the deals and come together to do co-investments.

We are open to non-HAN members. We need external knowledge, especially in life sciences. We need investors. We’re trying to partner with the Houston Area Translational Research Consortium. We’re helping to put the ecosystem together. We have the money but not the expertise to vet those deals. Maybe package it and have a fund, like in tech and mobile?

X: What are your main challenges? Are there institutional or cultural obstacles you’ve had to deal with?

JG: My biggest challenge is sustainability. We’ve been overambitious, too many initiatives in place. And then we cut our budget by cutting the fees to entrepreneurs. One of the ways we [have offset this] is by increasing the fees to members. Some of our less-active members took that as an excuse to leave. The fact is that we have less money and we are doing much more. That’s kind of a concern. Of course, we are trying to counteract that by doing much more awareness to attract much more people. We are getting … Next Page »

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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