Start Houston, Presidio Unveil New Network to Fund Local Tech Startups
Start Houston, a co-working space, is going beyond demo days and other events to support the city’s tech startups: Now it’s going to invest money in them.
Start has partnered with Presidio Venture Capital, also in Houston, to create the Start Investment Network, which will make seed investments of between $25,000 to $50,000 in Houston tech startups. As part of the deal, Presidio bought an undisclosed stake in Start Houston.
“The problem is that tech companies have a very hard time finding capital in Houston,” says Gaurav Khandelwal, who co-founded Start Houston along with Apurva Sanghavi. “They were out hunting everywhere else for capital and many ended up leaving Houston.”
The goal of the funding, Start and Presidio say, is to fill a gap in the current investment pipeline to support early-stage startups to the point where they are suitable for an angel or venture capital investment. The total amount of dollars that Start will put into these companies is not yet finalized.
“There is absolutely the need for this,” says Blair Garrou, co-founder and managing director at Houston venture capital firm Mercury Fund. “This is really helping companies mature to the point where they can take a meeting with a VC.”
The network, in effect, aims to multiply the reach of the monthly demo days Start currently holds which now bring about 200 attendees each time. Early-stage tech startups pitch before investors like Kirk Coburn, founder and executive director at cleantech accelerator Surge, giving them access and feedback otherwise unattainable, Sanghavi says.
He and Khandelwal point to several successful startups that began at a Start demo day, including, for example, RideScout, an app that aggregates ground transportation options, which two months ago was acquired by a subsidiary of Daimler AG. (I happened to be at that demo day last year when I met founder Joseph Kopser for the first time.)
Sanghavi says that the 70 companies that have pitched at Start Houston demo days since 2012 have in total raised $17 million in funding, including GripeO, Illumi, Virtuix Omni. The latter two have had appearances on the television show “Shark Tank” and CS Disco, a legal technology startup, itself recently raised $10 million in venture capital.
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