Fueling Startups: New Firms Emerge on Texas Venture Capital Landscape

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BioLum Sciences
—Founded by Jonathan Crowder along with Kevin Stevens and Kevin Crowder.
—Intelis Capital will focus on seed and Series A funding. (No information on its fund size was provided.)

When he graduated from Southern Methodist University in Dallas four years ago, Jonathan Crowder decided to go to Silicon Valley to get a firsthand look at the region’s powerhouse startup ecosystem. “There is this pervasive lore that all great technologies must be funded in the Bay Area,” he says. “I have a background in organizational theory. I wanted to see what that looked like and to see if that’s true.”

Three months later, he returned to Dallas to join Choose Energy, a Kleiner Perkins-backed greentech startup. “It was a great opportunity to be part of a tier-one venture capital-backed startup, but here at home,” he says. (Choose Energy was acquired by Red Ventures of North Carolina in June.)

That experience convinced him that North Texas had the ingredients to be a more robust innovation ecosystem, and so he started Intelis with his father and longtime Dallas entrepreneur Kevin Crowder and Kevin Stevens, a former colleague at Choose Energy.

“One thing that I see as a community that was done well is building a dense network of really generous [executives] who are generous with their time and willing to connect [founders] to their network,” Jonathan Crowder says. But, he added, those founders needed cash, as well as expertise, to build their businesses.

“There are a lot of industries that have not yet been fully disrupted by technology,” he says. “A lot of the talent to understand those businesses is actually located here.”

Work America Capital, Houston
—Notable investment: Vype
—Founded by Mark Toon, serial entrepreneur and most recently CEO of KPMG Capital in Houston, and Jeff Smith, longtime business consultant.
—Work America is raising a fund in the $20 million to $40 million range and will focus on investments between $500,000 and $3 million.

Serial entrepreneur Mark Toon spent much of the past 20 years building technology companies—including selling IT consultancy EquaTerra to KPMG in 2011—but says that Houston, then and now, does not fully support startups.

“My first companies were started in Houston in the ’90s and there was really no support structure for startups and early stage companies,” he says. “If you look at venture capital money in Texas, it sucks—and most of it is concentrated in Austin.”

So when KPMG Capital, where Toon was CEO since 2013, decided not to raise another fund, Toon says he decided to found Work America Capital to formalize a company around existing investments made by him and his co-founder Smith, in addition to seeking new opportunities. The pair also recently brought to the firm Kelly Dowe, formerly the chief business officer for the city of Houston, as CFO.

“I’ve spent my entire career hiring young professionals and giving them opportunities they could not have received at a corporation,” Toon says. “To improve the economy of Houston is to have job growth.”

So far, Toon says the pipeline for investment candidates is “robust.” In addition to capital, Work America is founding an accelerator/incubator in west Houston called The Cannon that could serve as a physical hub for young tech companies, he adds.

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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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