* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. HELLO AND [00:00:01] WELCOME. I'M YOUR HOST OLGA COVA STEM INNOVATION MANAGEMENT ANALYST, VICE PRESIDENT OF SCORE HOUSTON, AND AUTHOR OF INTEGRATIVE FRAMEWORK FOR EVALUATING THE COMMERCIALIZATION OF STEM INNOVATION WITH AI IMPLEMENTATION, WITH DEEP EXPERTISE IN THE INNOVATION STRATEGY AND COMMITMENT TO MENTORING ENTREPRENEURS, I HELP BRING SCIENCE-DRIVEN TECHNOLOGIES TO MARKET AND SUPPORT HOUSTON STARTUP ECOSYSTEM. AND I'M THRILLED TO HOST TODAY'S EPISODE OF OUR SPECIAL BUSINESS SERIES, CREATED IN PARTNERSHIP WITH SCORE HOUSTON SCORE CONNECTS ENTREPRENEURS WITH EXPERIENCED MENTORS TO HELP LAUNCH, GROW, AND SCALE SMALL BUSINESSES AT NO COST. THROUGH THIS COLLABORATION WITH HOUSTON TV, WE ARE BRINGING YOUR REAL INSIGHTS EXPERT ADVICE AND THE RESOURCES YOU NEED TO FUEL YOUR ENTREPRENEURIAL JOURNEY RIGHT HERE IN HOUSTON. TODAY'S EPISODE IS TITLED FUELING THE DREAM, HOW TO COMMERCIALIZE YOUR INNOVATIVE IDEAS AND SECURE FUNDING IN HOUSTON STARTUP ECOSYSTEM. FROM ANGEL INVESTORS TO VENTURE CAPITAL UNIVERSITY ACCELERATORS TO FEDERAL FUNDING PROGRAMS, WE WILL EXPLORE HOW LOCAL FOUNDERS CAN TURN BOLD IDEAS INTO FUNDED FAST GROWING BUSINESSES. WHETHER YOU'RE JUST GETTING STARTED OR PREPARING TO SCALE, THIS EPISODE IS PACKED WITH PRACTICAL TAKEAWAYS. LET'S GET STARTED. WELCOME BACK. I'M YOUR HOST, OLGA ORVA, WITH YEARS OF EXPERIENCE IN INNOVATION MANAGEMENT AND THE PASSION FOR EMPOWERING STARTUPS. I'M EXCITED TO GUIDE YOU THROUGH INSPIRING STORIES AND VALUABLE INSIGHTS FROM HOUSTON'S VIBRANT BUSINESS COMMUNITY. TODAY'S EPISODE IS TITLED FUELING THE DREAM, HOW TO COMMERCIALIZE YOUR INNOVATIVE IDEAS AND SECURE FUNDING IN HOUSTON'S STARTUP ECOSYSTEM. WHETHER YOU'RE AN ASPIRING ENTREPRENEUR OR AN INNOVATOR SEEKING FUNDING, UNDERSTANDING THE EARLY STAGE OF INVESTMENT IS KEY. IN THIS SEGMENT, WE WILL EXPLORE THE ROLE OF ANGEL INVESTORS AND VENTURE CAPITALISTS IN TURNING EARLY IDEAS INTO VIABLE, SCALABLE BUSINESS. I'M PLEASED TO WELCOME TO REMARKABLE GUEST RO JAVA, BOARD MEMBER AT THE HOUSTON ANGEL NETWORK IS AN EXCITED FOUNDER WITH A STRONG TECHNOLOGY BACKGROUND AND OVER 25 YEARS OF EXPERIENCE IN THE ENERGY SECTOR SINCE ENTERING THE INVESTMENT SPACE IN 2022, HIS LAUNCHED A NEW VENTURE FIRM FOCUSED ON LIFE SCIENCE AND HAS BEEN ACTIVELY SUPPORTING EARLY STAGE IN INNOVATION IN HOUSTON. AND JAN ODEGAARD IS A NATIONALLY RECOGNIZED INNOVATION STRATEGIST, VENTURE ADVISOR AND TECHNOLOGY LEADER WITH MORE THAN 30 YEARS OF EXPERIENCE AT THE INTERSECTION OF ACADEMIA, ENTREPRENEURSHIP AND APPLIED RESEARCH. HE'S THE FOUNDER AND THE CEO OF 62 X VENTURES, WHERE HE ADVISED ON THE DESIGN AND GROWTH OF INNOVATION ECOSYSTEM AND HEAD OF UB HOUSTON, THE VENTURE UNIVERSITY VENTURE INVESTOR ACCELERATOR THAT PREPARES INDIVIDUAL TO BECOME FUND MANAGERS AND SUCCESSFUL VENTURE INVESTOR. THANK YOU BOTH FOR JOINING US. LET'S DIVE RIGHT IN. FIRST, LET'S START WITH YOU. UH, WHAT EXACTLY DEFINES AN ANGEL INVESTOR AND HOW DOES THE DIFFER FROM TRADITIONAL BANKS OR VENTURE CAPITALISTS? YEAH, THANKS FOR THAT. SO ANGEL INVESTING IS, UH, MADE UP OF INDIVIDUALS WHO ARE PERHAPS, UH, PROFESSIONALS. THEY'RE EXECUTIVES, RETIREES. THEY'RE INVESTING THEIR OWN MONEY INTO STARTUPS, UH, EARLY STAGE IN RETURN FOR EQUITY. SO THEY'RE GETTING SHARES AND THEY'RE HOPING THAT THE, THE VALUE OF THOSE SHARES INCREASE MULTIPLE FOLD. AT SOME POINT, THEY GET A RETURN. VENTURE CAPITAL IS SOMEWHAT SIMILAR, ALTHOUGH THEY GET INVOLVED IN A LATER STAGE, THEY WRITE BIGGER CHECKS. AND ONE OF THE BIGGEST DIFFERENCES BETWEEN THE TWO IS THAT ANGELS ARE DOING THEIR OWN INVESTING DUE DILIGENCE. UM, THE VENTURE CAPITAL FIRM IS RUN BY A FUND MANAGER. THEY'RE RAISING THE FUNDS FROM OTHER PEOPLE, AND THEN THEY'RE DEPLOYING THE FUNDS, UH, ON THEIR BEHALF, UH, WITH BANKS. UM, YOU KNOW, THEY WILL NOT TAKE EQUITY SO MUCH AS JUST GIVE YOU A LOAN FOR YOU TO RETURN IT WITH INTEREST. OKAY, THANK YOU. YEAH. AND LET'S BUILD ON THAT MOMENTUM. UH, COULD YOU PLEASE SHARE WHEN IS THE RIGHT TIME FOR FOUNDERS TO SEEK BUSINESS FUNDING? WELL, GREAT QUESTION AND AND IT'S AN INTERESTING PART OF THE JOURNEY AND IT'S REALLY EXCITING TO BE HERE TO TALK ABOUT THIS. IT'S A NEW PASSION OF MINE, AND, UH, IT DEPENDS ON THE STARTUP AND IT'S REALLY DEPENDS ON THE, THE SEGMENTS OF THE INDUSTRY WE'RE IN. BECAUSE IF YOU THINK ABOUT THE TRADITIONAL BUSINESSES OF SOFTWARE TECH AND, AND WHICH OFTEN GETS TALKED ABOUT IN SORT OF THE, THE VC SPACE, YOU KNOW, THAT'S VERY DIFFERENT FROM A HARD TECH OR A DEEP TECH, YOU KNOW, HEALTH TECH KIND OF STARTUP WHERE, [00:05:01] YOU KNOW, WHEN YOU GET IN, YOU KNOW, UH, IT REALLY DEPENDS ON THAT. AND ANGEL INVESTING AND PRECEDING SEED AND FAMILY AND FRIENDS IS CERTAINLY A VEHICLE YOU SHOULD ALWAYS USE, UH, UH, IN THE EARLY AGE, UH, IN THE VERY EARLY STAGES. AND I THINK IN, IN, FROM MY POINT OF VIEW, THE BEST TIME TO REALLY SEEK, UH, YOU KNOW, SIGNIFICANT, UH, UH, VENTURE CAPITAL FOR EQUITY IN RETURN IS WHEN YOU ARE LINE OF SIGHT IN HOCKEY STICK GROWTH. BECAUSE IF YOU TAKE IT MUCH EARLIER THAN THAT, YOU'RE RISKING GIVING AWAY MOST OF YOUR COMPANY BEFORE YOU ACTUALLY ARE WITHIN THAT. IN WHICH CASE, IT'S LIKE WHAT YOU HAVE CREATED IS TO SOME DEGREE LOST TO THE INVESTOR UNLESS YOU HAVE INVESTORS THAT ARE WILLING TO BASICALLY HELP YOU GET BACK SOME OF THAT EQUITY. AND THEY DO EXIST, BUT IN THE END, THE INVESTOR IS IN IT FOR THEMSELVES. THEY'RE IN IT TO MAXIMIZE RETURNS, YOU KNOW, THEY'RE THERE TO HELP YOU GROW, BUT IN THE END, THEY NEED TO RETURN MONEY TO THEIR LIMITED PARTNERS AND THE MONEY THEY INVEST FOR THEM. ALRIGHT, THANK YOU ANN. UH, FIRST QUESTION FOR YOU. UH, WHAT TYPE OF, UH, INDUSTRIES, INDUSTRIES AND UH, TYPE OF INVESTORS TEND TO BE MOST ATTRACTIVE TO HOUSTON ANGEL NETWORK RIGHT NOW? UM, I WOULD SAY AT, AT THE HOUSTON ANGEL NETWORK, WE'RE LOOKING AT LIFE SCIENCES, UH, HEALTHCARE SECTOR, WE'RE LOOKING AT, UH, THE ENERGY SECTOR, TECHNOLOGY AND, UH, CONSUMER PRODUCTS. WE TEND TO NOT INVEST IN, UH, RESTAURANTS AND REAL ESTATE, UM, YOU KNOW, SERVICES, BUSINESSES AND, AND SO ON. UM, YOU KNOW, AS FAR AS THE TYPES OF FOUNDERS, YOU KNOW, WE, WE LOOK FOR FOUNDING TEAMS THAT ARE, UM, UH, THEY'VE GOT THE DOMAIN EXPERTISE, UH, FOR THE INDUSTRY THAT THEY REPRESENT. AND, UM, YOU KNOW, IN GENERAL, WE, WE LOOK FOR FOUNDERS TO HAVE THAT CERTAIN SOMETHING, UM, WHERE THEY'VE GOT ENOUGH GRIT AND DETERMINATION WITH AROUND THEIR IDEA, AND YET THEY'RE COACHABLE AND, UM, YOU KNOW, THEY'RE NOT STUBBORN. SO THERE'S A FINE BALANCE. IT'S AN IN INTANGIBLE, BUT THOSE ARE SOME OF THE THINGS THAT WE LOOK FOR. AND THEN, UH, THE SIZE OF INVESTMENTS ARE TYPICALLY ABOUT, YOU KNOW, IT CAN GO FROM 5,000 PER ANGEL TO HUNDREDS OF THOUSANDS, RIGHT? SO THERE'S A, THERE'S A BIG, UM, THE SPECTRUM OF AMOUNTS THAT CAN, UM, BE HAD FROM THE FOUNDERS. OKAY. THANK YOU. UM, YEAH, WHAT ARE THE KEY THINGS YOU LOOK FOR TO JUDGE WHETHER THE STARTUP IS READY TO COMMERCIALIZE ITS INNOVATION AGAIN, IT'S, IT'S ONE OF THOSE INTERESTING THING. IT DEPENDS, BUT I MEAN, YOU KNOW, TO FOLLOW ON AND FOR US IT'S KIND OF THING, IT'S LIKE, YOU KNOW, YES, YOU NEED TO FORM A CONVICTION THAT THE TEAM IS THERE TO BE ABLE TO EXECUTE, YOU NEED TO BE COACHABLE AND ALL THOSE THINGS. BUT, YOU KNOW, THREE QUESTIONS THAT, YOU KNOW, I'VE ALWAYS BEEN REMINDED WHEN I TALK TO ANDREW ZA AND HE'S A, YOU KNOW, OFFICE MANAGER OR FAMILY OFFICE AND LIKE GENERAL PARTNER, A VENTURE, UH, PARTNERS, UH, HE SAID, YOU KNOW, YOU WANT TO UNDERSTAND WHAT DOES THE COMPANY DO, YOU KNOW, THE, THE, THE WHY SHOULD I CARE AND HOW DOES IT MAKE MONEY? IF YOU CAN GET A CLEAR PICTURE OF THOSE THREE THINGS WITHOUT BEING SORT OF DROWNED IN ALL KINDS OF METRICS AND STATISTICS ABOUT SORT OF AUXILIARY THINGS THAT THE, THE FOUNDER THINKS IS, AND THIS IS EARLY STAGE, YOU, YOU NEED TO FORM A CONVICTION THAT THIS IS ACTUALLY A MARKET SHIFTING OPPORTUNITY. AND, AND TO DO THAT, YOU REALLY NEED TO UNDERSTAND THAT, YOU KNOW, AND, AND THE, THESE, IF YOU, IF YOU HAVE A GOOD PICTURE OF THOSE THREE QUESTIONS, YOU CAN START THEN DIGGING INTO WHAT'S THE MARKET OPPORTUNITY? WHAT'S THE PRODUCT MARKET FIT? DO THEY UNDERSTAND HOW TO EXECUTE TOWARDS IT? DO THEY UNDERSTAND HOW TO GO TO MARKET IN IN THAT PLACE? AND DO THEY HAVE THAT HACK IT TAKES TO ACTUALLY UNLOCK THE MARKET? BECAUSE THOSE ARE SORT OF THE DUE DILIGENCE QUESTION YOU WILL FOLLOW ONTO, BUT INITIALLY YOU NEED TO, LIKE, WHAT DOES IT DO? WHY SHOULD THEY CARE? AND HOW IS HE GONNA MAKE MONEY? BECAUSE IN THE END, THAT'S WHAT THE INVESTOR CARE ABOUT. I SEE. THANK YOU, YAN. THANK YOU SO MUCH. UM, FIERCE. AND FINALLY, FOR FOUNDERS, UM, HOPING TO LAND A MEETING WITH THE, UM, ANGEL, UH, INVESTORS, WHAT SHOULD THEY HAVE READY AND WHAT SHOULD THEY DO? UM, UH, WHAT SPECIFIC METRICS OR FORM OF TRACTION MATTER MOST? YEAH, I WOULD SAY, YOU KNOW, ANGELS ARE GETTING INVOLVED QUITE EARLY. UM, SO TO JAN'S POINT, UH, YOU, YOU DO WANT SOMEONE THAT'S GOT A CLEAR PLAN, LIKE OF WHAT THEY'RE DOING AND HOW THEY'RE GONNA DO IT. UH, SO GO TO MARKET EXIT STRATEGY, I THINK IS KEY BECAUSE A LOT OF TIMES, UM, FOUNDERS HAVEN'T REALLY THOUGHT THROUGH THAT, AND ANGELS ARE, UH, YOU KNOW, ARE GETTING IN INVOLVED BECAUSE ULTIMATELY THEY WANNA MAKE A PROFIT, RIGHT? SO, SO THINKING THROUGH, GIVING THEM SOME LIGHT AT THE END OF THE TUNNEL, BUT, UH, YOU KNOW, ONE OF, SOME OF THE MISTAKES I'VE SEEN MADE OR, YOU KNOW, PEOPLE GET TOO DETAILED TOO FAST AND IT NEEDS TO BE A COMPREHENSIVE HIGH LEVEL MESSAGE MM-HMM . THAT GETS, PEAKS THEIR INTEREST TO THEN HAVE FOLLOW UP MEETINGS AFTER THAT. I SEE. OKAY. THANKS. YEAH. AND IS IT THE SAME FOR VENTURE CAPITALISTS? IT, IT IS DEFINITELY THE LARGELY THE SAME. IT DEPENDS ON WHERE IN WE ARE THE VENTURE CAPITALISTS, BECAUSE THE VENTURE CAPITALISTS CAN BE ALMOST OVERLAPPING WITH THE ANGEL IN THE EARLY STAGES AND IN THE LATER STAGES. AND AS YOU MOVE ON INTO LATER, IT'S GONNA BE MORE AND MORE THE NUMBERS SCHEME, BECAUSE AS YOU MOVE UP, IT STARTS LOOKING [00:10:01] LIKE PRIVATE EQUITY, YOU KNOW? SO IN EARLY STAGES IT'S REALLY ABOUT THAT OPPORTUNITY FOR THE TRACTION, HOW TO UNLOCK THE MARKET, ARE THEY SCALING APPROPRIATELY WITHIN THE PROMISES OR PROJECTIONS THEY'RE MAKING, YOU KNOW? AND SO IF THEY'RE, IF THEY'RE DELIVERING ON THAT, YOU'RE WILLING TO GO BACK IN AND, AND MAINTAIN YOUR PRORATA AND KIND OF KEEP GROWING THAT AND STAYING IN YOUR, IN YOUR LANE TO ACTUALLY GET THAT RETURN. YOU KNOW, I'VE ALSO SEEN BY THE WAY, ON, ON THE, ON THE ON, UH, THEM BEING TOO EAGER TO TALK ABOUT EXITS. THAT'S ALSO A LITTLE BIT SOMETIMES A THING THAT I LIKE TO DIG INTO BECAUSE IT COULD BE A RED FLAG THAT THEY'RE THERE, THEY'RE NOT REALLY COMMITTED TO THEIR IDEA. THEY REALLY JUST WANT TO KIND OF FIGURE OUT QUICKLY HOW TO, TO, TO TURN IT AND, AND CASH IN FOR THEMSELVES. AND, AND, YOU KNOW, I WANT AN A FOUNDER THAT TRULY, REALLY IS THE ONE I'M, I'M BETTING ON, BECAUSE IN THE END, IN THE EARLY STAGE INVESTMENTS, I'M BETTING ON THE FOUNDER, YOU KNOW, AND THE IDEA THAT HE BRINGS INITIALLY MAY NOT ULTIMATELY BE THE IDEA THAT'S GONNA SUCCEED, BUT THE FOUNDER IS GONNA SUCCEED. I SEE. YEAH. UH, THANK YOU BOTH. IT'S BEEN A TRUE MASTERCLASS, UM, FOR NEXT GENERATION OF INNOVATORS IN HOUSTON, AND I REALLY APPRECIATE, UH, THAT YOU CAME AND, UH, DISCUSSED THIS QUESTION. THANK YOU SO MUCH. YEAH, THANKS. THANK YOU. THANK YOU FOR PUTTING, PUTTING THIS TOGETHER. YEAH, SURE. WE APPRECIATE IT, OLGA. NEXT UP, WE'LL TAKE A LOOK AT HOW ACCELERATOR PROGRAMS HELPS STARTUPS GROW AND GET READY FOR FUNDING. DON'T GO ANYWHERE. WE WILL BE RIGHT BACK AFTER A SHORT BREAK. THE FAMILY HISTORY RESEARCH CENTER AT THE CLAYTON LIBRARY CAMPUS IS ONE OF THE PREMIER GENEALOGICAL RESEARCH INSTITUTIONS IN THE NATION. IN ADDITION TO OUR COLLECTION OF OVER 100,000 BOOKS, WE OFFER RECORDS FOR ALL 50 STATES, INTERNATIONAL RECORDS, FAMILY CHARTS AND NOTES, AND OVER 29 ONLINE DATABASES. WE ASSIST RESEARCHERS FROM ALL OVER THE WORLD OF ALL LEVELS OF EXPERTISE, FROM BEGINNER TO EXPERT, COME UNCOVER YOUR PAST, UNDERSTAND YOUR PRESENT, AND PRESERVE YOUR LEGACY FOR THE FUTURE. AT THE CLAYTON LIBRARY, GREASE AND WIPES CLOG PIPES, IN FACT, CLOGS FROM THESE ITEMS ARE THE MAIN CAUSE OF SEWER OVERFLOWS IN HOUSTON. OUR PIPES ARE DESIGNED TO TRANSPORT WATER, PEE POO, TOILET PAPER, AND SOAP. HERE ARE A FEW ITEMS TO KEEP OUT OF TOILETS AND DRINKS IN THE KITCHEN. PUT GREASE IN ITS PLACE THE TRASH, SIMPLY POUR IT INTO A HEAT RESISTANT CONTAINER. COOL IT, THEN TOSS IT IN THE TRASH. THIS INCLUDES FOOD ITEMS SUCH AS MEAT, FATS, BUTTER, AND CREAM OILS, AND EVEN DOUGH AND BATTER. ALL FOOD SCRAPS SHOULD BE TOSSED IN THE TRASH IN THE RESTROOM. ONLY FLUSH THE THREE PEAS, PEE POO AND TOILET PAPER. TOGETHER WE CAN PROTECT OUR PIPES FROM CLOGS AND OVERFLOWS. LEARN MORE@PROTECTOURPIPES.ORG. THE KENNEDY BAKERY BUILDING IS SAID TO BE ONE OF THE OLDEST HAUNTS IN HOUSTON. WELCOME BACK. I'M YOUR HOST, OLGA COVA, AND YOU'RE WATCHING FUELING THE DREAM, HOW TO COMMERCIALIZE YOUR INNOVATIVE IDEAS AND SECURE FUNDING IN HOUSTON STARTUP ECOSYSTEM. IN THIS SEGMENT, WE WILL SHIFT GEARS AND TALK ABOUT ONE OF THE MOST POWERFUL GROWTH ENGINES FOR EARLY STAGE STARTUPS ACCELERATOR PROGRAMS. I'M EXCITED TO WELCOME OUR NEXT GUEST, LIANA GONZALEZ, DIRECTOR OF LEAD LOBSTERS AND STARTUP ACCELERATOR AT THE UNIVERSITY OF HOUSTON. LIANA WORKS CLOSELY WITH STUDENT AND FACULTY ENTREPRENEURS TO HELP BRING THEIR IDEAS TO LIFE AND PREPARE THEM FOR THE REAL WORLD OF FUNDING AND COMMERCIALIZATION. LIANA, WELCOME TO THE SHOW. THANK YOU SO MUCH FOR HAVING ME. I'M EXCITED TO TALK ABOUT ALL THE INTERESTING OPPORTUNITIES GOING ON AT U OF H. LEANNA. FIRST QUESTION, UH, WHAT KIND OF FUNDING OPPORTUNITIES CAN STARTUPS GAIN BY JOINING RED LABS OR OTHER UNIVERSITY BASED ACCELERATOR PROGRAMS? SO, I WOULD SAY ANY UNIVERSITY BASED SPONSORED ACCELERATOR PROGRAM, THEIR MAIN GOAL IS REALLY TO PROVIDE A STRONG EDUCATIONAL FOUNDATION FOR, UH, STUDENTS AND FOUNDERS. A LOT OF THE PEOPLE THAT COME THROUGH OUR PROGRAM ARE REALLY YOUNG. THEY'RE 21, 22, 23. UM, AND SO MAKING SURE THAT THEY HAVE THE PROPER VOCABULARY AND UNDERSTANDING OF WHAT IT EVEN MEANS TO RAISE FUNDS AND ALL THE DIFFERENT OPPORTUNITIES AVAILABLE TO THEM. SO THAT'S LIKE THE FIRST PART. THE SECOND PART IS WE DO PROVIDE A SMALL STIPEND, UH, FOR THE TEAMS THAT GET IN JUST TO KIND OF LIKE, SUPPORT THEM THROUGH THE SUMMER AND KIND OF LET THEM KNOW, YOU KNOW, WE GOT THEIR BACK AND WE'RE ROOTING FOR THEM. AND, UH, WE THINK IT'S A GOOD IDEA. ALRIGHT, THANK YOU. DOES RED LABS OFFER DIRECT FUNDING OR IS IT MORE ABOUT [00:15:01] CONNECTING, UH, STARTUPS WITH THE RIGHT PEOPLE? SO WE, LIKE I SAID, WE OFFER THE STIPEND, UM, OTHER ACCELERATORS THAT ARE MAYBE NOT UNIVERSITY BASED. WE'LL TAKE A PERCENTAGE, LIKE EQUITY AND GIVE YOU A BIG CHUNK OF MONEY. WE JUST DO A STIPEND. WE'RE THERE TO KIND OF LIKE HAVE OUR UNIVERSITY ATTACHED WITH YOUR EDUCATION. UM, AND THEN WE ALSO PROVIDE A TON OF, UH, OPPORTUNITIES FOR THESE FOUNDERS TO MEET PEOPLE IN THE SPACE. UH, HOUSTON ECOSYSTEM IS REALLY SMALL, UM, AND THERE'S A LOT OF OPPORTUNITIES IF YOU GET THE OP, IF YOU GET THE CHANCE TO MEET PEOPLE. SO WE WORK VERY CLOSELY, FOR EXAMPLE, WITH SCORE. UH, WE HAVE A LOT OF MENTORS COME IN AND GIVE THEIR ADVICE AND HELP MENTOR STUDENTS, UH, FOUNDERS AND FACULTY OVER THE SUMMER AND HOPEFULLY MOVE THEM FROM, THIS IS JUST AN IDEA I HAD TO, I NOW HAVE CUSTOMERS, I'M MAKING REVENUE, AND THIS IS HOW I'M GONNA GO FORWARD WITH MY FUNDING STRATEGY. SO HOW DOES, UH, HOW DOES CORE MENTORS HELP YOUR FOUNDERS PREPARING, PITCHING, OR OTHER, IN OTHER TERMS? SO SOMETIMES THEY JUST, UH, ARE THEIR CHEERLEADERS, WHICH IS PROBABLY, UH, THE BIGGEST THING IN MENTORSHIP IS JUST BEING SUPPORTIVE AND TELL, LETTING THEM KNOW THAT THEY CAN GET THROUGH THIS AND THAT IT'S BEEN DONE BEFORE, OFFERING EXPERTISE. OTHER TIMES, UH, THEY HAVE LIKE A VERY, LIKE, SPECIFIC FORM OF EXPERTISE THAT CAN REALLY HELP THESE FOUNDERS CONNECT WITH POTENTIAL CLIENTS, UH, OR, UH, YOU KNOW, CUSTOMERS. AND THEN, UH, ALSO THEY, UH, PROVIDE, WE, WE DO A BIG PITCH AT THE END OF THE SUMMER EVERY YEAR, AND THEY COME IN AND HEAR THEM A MILLION TIMES OVER AND MAKE SURE THAT THEY MAKE SENSE, UH, AND ARE COMPELLING. AWESOME. AND FOR THOSE WHO WATCHING AND THINKING ABOUT JOINING, UH, WHEN IS THE RIGHT TIME, UH, TO JOIN RED LOBSTERS? SURE. SO YOU HAVE TO BE, UNFORTUNATELY, A UNIVERSITY OF HOUSTON STUDENT OR HAVE SOMEBODY ON YOUR TEAM THAT IS EITHER A UNIVERSITY OF HOUSTON STUDENT, RECENT ALUMNI OR A FACULTY MEMBER. UM, BUT BASICALLY WE LIKE TO SEE THAT YOU'VE ALREADY VALIDATED YOUR IDEA THAT SOMEBODY ACTUALLY WANTS THIS. UM, AND IF YOU ALREADY HAVE SOME CUSTOMERS, THAT'S EVEN BETTER. AND, UH, THAT, THAT'S JUST KIND OF REALLY IT. OH, AND THAT YOU WANNA SPEND THE SUMMER WORKING ON THIS ALL SUMMER, UH, AND YOU HAVE NO TRIPS TO EUROPE. UH, THAT WOULD BE ANOTHER, I THINK WE THINK WE DEFINITELY LOOK FOR. AWESOME. AND HOW LONG, HOW LONG IS THE PROGRAM? IT IS 12 WEEK, 12 WEEKS LONG, BUT I REALLY LIKE TO THINK OF IT ALMOST MORE LIKE EIGHT WEEKS BECAUSE WE KIND OF HAVE LIKE A BOOTCAMP FOR TWO WEEKS. UH, AND THEN WE HAVE OUR DEMO DAY THAT WE PREP FOR AT THE END OF THE SUMMER. SO, UM, IT'S REALLY 10 WEEKS OF CURRICULUM, EIGHT WEEKS OF MENTORING, AND THEN, UM, TWO WEEKS FOR THE PITCH. SO SOMEHOW THAT ALL OVERLAPS 12 WEEKS. OKAY. SOUNDS GREAT. UH, THANK YOU SO MUCH, LIANA. THANK YOU SO MUCH FOR HAVING ME. IT WAS AWESOME. THAT WAS A GREAT LOOK AT HOW ACCELERATOR PROGRAMS LIKE RED LABS HELPING BUILD THE NEXT WAVE OF HOUSTON INNOVATORS. WE WILL BE RIGHT BACK AFTER A SHORT BREAK WHERE WE WILL EXPLORE HOW FEDERAL AND LOCAL PROGRAMS ARE FUELING INNOVATION ACROSS THE REGION. DON'T GO ANYWHERE. LOTS OF PEOPLE WITH COMPLETELY DIFFERENT BACKGROUNDS COMING TOGETHER FOR A GREATER GOAL. KIND OF REPRESENTS HOUSTON AS A WHOLE AND EVERYBODY HAS A DIFFERENT STYLE, BUT SOMEHOW THAT'S KIND OF OUR THING. IT'S DIFFERENT PATCHES OF PEOPLE AND CULTURES. THEY BRING SOMETHING NEW TO THE TABLE THAT INFLUENCES A LOT OF WHAT WE DO. WE EMBRACE THE FUTURE, WE LEARN, WE GROW, WE EVOLVE, AND WORK IS ONE. TO BUILD A BETTER FUTURE HERE IN HOUSTON, MAKE THE RIGHT CALL. 2 1 1 3, 1 1 9 1 1. MY HOME IS ON FIRE. CALL 9 1 1. [00:20:01] FOR EMERGENCY ASSISTANCE SUCH AS AMBULANCE, POLICE, OR FIRE, THE FIRE HYDRANT IS GUSHING EVERYWHERE. CALL 3 1 1. FOR CITY RELATED SERVICES, LIKE WATER LEAKS, TRAFFIC TICKETS, AND MORE, I NEED HELP FINDING A NEW PLACE TO LIVE. CALL 2 1 1 FOR ALL SOCIAL SERVICE NEEDS, SUCH AS FOOD BANKS, HOUSING, SHELTER ASSISTANCE, HEALTHCARE AND CHILDCARE SERVICES. MAKE THE RIGHT CALL. 2 1 1 3 1 1 9 1 1. WELCOME BACK TO FUELING THE DREAM. I'M YOUR HOST, OLGA OLIVA. IN THIS FINAL SEGMENT, WE ARE EXPLORING THE FEDERAL AND LOCAL RESOURCES THAT ARE HELPING STARTUPS NOT ONLY GET OFF THE GROUND, BUT GROW AND SCALE. I'M HONORED TO WELCOME TWO SPECIAL GUESTS. MARK WINCHESTER IS THE DISTRICT DIRECTOR FOR THE US SMALL BUSINESS ADMINISTRATION HOUSTON DISTRICT OFFICE. WITH OVER 22 YEARS OF EXPERIENCE SUPPORTING ENTREPRENEURS, HE PLAYS A VITAL ROLE IN ADVANCING THE SBAS MISSION TO HELP AMERICANS START, GROW AND EXPAND THEIR BUSINESSES. MARK LEADS EFFORTS ACROSS THE HOUSTON DISTRICT TO IMPROVE ACCESS TO CAPITAL EXPERT GUIDANCE AND FEDERAL CONTRACTING, EMPOWERING SMALL BUSINESS TO SUCCEED. AND JIM O SULLIVAN, WHO HAS BEEN WITH SCORE FOR SIX YEARS, HE'S ALSO ACTIVELY INVOLVED IN ADVISING AT THE CANNON LOCALLY AND CAPITAL FACTORY IN AUSTIN. ADDITIONALLY, HE PARTICIPATES IN MULTIPLE RICE ALLIANCE PROGRAMS, INCLUDING IN-PERSON MENTORING AT THE ION. JIM IS ALSO AN ACTIVE INVESTOR AND A MEMBER OF THE HOUSTON ANGEL NETWORK. MARK JIM, WELCOME TO THE SHOW. UH, MARK, LET'S START WITH YOU. SO, SBA PLAYS A HUGE ROLE IN SUPPORTING INNOVATION. COULD YOU PLEASE, UH, EXPLAIN, UM, AND WALK THROUGH THE PROGRAM LIKE SBIR, STTR AND SBAC? WELL, IT'S A GREAT QUESTION. UM, AND, UH, OLGA REALLY, REALLY NEED, WELL, UM, THE PUBLIC REALLY NEEDS TO TAKE A STEP BACK. FIRST, WANNA LET YOU KNOW, WE'RE A FEDERAL AGENCY. WE'RE A FEDERAL AGENCY THAT WAS CREATED 72 YEARS AGO, AND OUR MISSION IS TO MAKE THE AMERICAN DREAM OF BUSINESS OWNERSHIP A REALITY. AND WE DO THAT BY HELPING SMALL BUSINESSES START, GROW, EXPAND, AND RECOVER. AND WE HAVE FOUR MAIN PROGRAMS, CAPITAL CONTRACTING, COUNSELING AND CRISIS. BUT TO YOUR POINT, IN REGARDING TO SBIC, SBIR AND STTR, WE HAVE A DEPARTMENT CALLED OFFICE OF INNOVATION AND INVESTMENT. AND UNDER THE OFFICE OF INNOVATION AND INVESTMENT, WE HAVE THE, UH, SBIR, SMALL BUSINESS INNOVATION RESEARCH, THE STTR, SMALL BUSINESS TECHNOLOGY TRANSFER. AND THEN WE ALSO, TO YOUR POINT, WE ALSO HAVE SMALL BUSINESS INVESTMENT COMPANIES. THANK YOU. UH, LET'S TALK ABOUT SBAS. UH, WHAT EXACTLY IN SBC AND HOW IS IT DIFFERENT FROM A TRADITIONAL LOAN? YEAH, SO, UH, OLGA, IT'S A GREAT QUESTION. UH, THE PUBLIC, A LOT OF PEOPLE AND A LOT OF BUSINESSES WHEN THEY HEAR SBA, UM, EVEN STAKEHOLDERS, ALL THEY THINK OF IS DEBT. AND SO, UM, THE AUDIENCE REALLY NEEDS TO BE AWARE THAT WHEN IT COMES TO CAPITAL INVESTMENT, IT CAN BE DEBT EQUITY OR A COMBINATION OF BOTH. WITH OII, OFFICE OF INNOVATION AND INVESTMENT AND SPIS, IT'S EQUITY INVESTMENT WHEN IT COMES TO CAPITAL INVESTMENT. AND WE HAVE OVER 300 SBS ACROSS THE COUNTRY AND IN TEXAS, AND MORE SPECIFICALLY HERE IN HOUSTON. THANK YOU. I'VE HEARD THE, UH, THE TERM SBIC LEVERAGE. WHAT DOES IT MEAN? YOU KNOW, IT'S A GREAT QUESTION. WHAT IT IS, IS SBA LENS UP TO 175 MILLION AT A VERY LOW INTEREST, UH, TO THESE S BS. WHAT IT IS IS, UM, AN ANGEL INVESTOR OR VENTURE CAPITALIST THAT IS INTERESTED IN PARTICIPATING, UH, IN BECOMING AN SBIC, THEY GO THROUGH A PROCESS AND THEY CAN BORROW, UH, ONE TO ONE RATIO, ONE TO TWO RATIO, AND UP TO A ONE TO THREE RATIO. SO THAT LEVERAGING IS LEVER, LEVERAGING THE SBA CAPITAL, UH, TO RAISE FUNDS FOR INVESTMENT. SO WHAT ARE, UH, SOME OF THE BENEFITS, UH, FOR A FIRM BECOMING SBAC UM, LICENSE HOLDER? YEAH, THE, UM, ONE OF THE BENEFITS AND IN WHICH WAS RECENTLY DONE, UH, LAST YEAR IS, UH, CALLED PATIENT CAPITAL. [00:25:01] PATIENT CAPITAL MEANS, UH, GETTING SBA, GETTING REIMBURSED ON AN ACCRUAL BASIS. AND SO, UH, YOU KNOW, SMALL BUSINESSES, ESPECIALLY, UH, BUSINESSES THAT ARE AN R AND D AND THAT ARE, UH, EQUITY BASED OR EQUITY FUNDED, THEY, THEY NEED A RUNWAY. THEY NEED A RUNWAY TO GET STARTED. AND SO NEEDING A RUNWAY TO GET, UH, STARTED, SBA HAS OFFERED THIS ACCRUAL BASED. AND SO THE, UH, PRINCIPLE AND INTEREST ISN'T, UH, PAID UNTIL MATURITY. AND SO THAT'S, THAT'S JUST ONE TOOL, UH, WITH THE SBIC AND OVER $8 BILLION, UH, BEING LENT, UH, ANNUALLY, UH, THROUGH, UH, THIS CAPITAL AT A VERY LOW INTEREST FOR S BICS. YOU MENTIONED EARLY ABOUT STTR AND UM, ASS BR PROGRAM. UH, HOW ARE THEY DIFFERENT AND WHO SHOULD APPLY? YOU KNOW, UH, IT'S A GREAT QUESTION. THE S-B-I-R-S-T-T-R, THIS IS AN OPPORTUNITY FOR GRANTS AND CONTRACTS IN, UH, RESEARCH AND DEVELOPMENT, NEARLY $5 BILLION THAT, UH, SMALL BUSINESSES IN R AND D CAN ACCESS IN, IN REGARDS TO S-B-I-R-A SMALL BUSINESS INNOVATION RESEARCH, YOU HAVE A TEAM THAT INCLUDES A PRINCIPAL INVESTIGATOR AND THEY CAN WORK WITH ANOTHER, UH, SBIR, UH, TEAM WITH PRINCIPAL INVESTIGATOR, AND THEY CAN RESPOND TO SPECIFIC GRANTS AND CONTRACT OPPORTUNITIES. THE DIFFERENCE WITH A SMALL BUSINESS, UH, TECHNOLOGY TRANSFER IS THAT AT A MINIMUM, 30% OF THE PROJECT NEEDS TO BE COMPLETED BY A NONPROFIT TIER ONE INSTITUTION. OKAY, THANK YOU, MARK. THANK YOU SO MUCH. AND JIM, NOW TURNING TO YOU. UH, SO USUALLY SCORE MENTORS ARE THE FIRST STEP, UH, FOR FIRST TIME FOUNDERS ESPECIALLY. UM, SO COULD YOU EXPLAIN HOW THE SCORE HELP FOUNDERS, UM, TO REACH THESE OPPORTUNITIES? UM, FUNDING, WHENEVER YOU START A CONVERSATION WITH SOMEBODY WHO COMES IN AND TALKS TO SCORE, THEY MAY BE ANYWHERE ALONG THE JOURNEY AND YOU HAVE TO TAKE THE TIME TO FIGURE OUT WHERE THEY ARE AND HOW THEY GOT THERE, UH, BEFORE YOU START TALKING FINANCE. 'CAUSE ALMOST HALF OF 'EM WILL COME IN AND SAY, I NEED MONEY. AND I SAID, WELL, THAT'S NICE. SO DO I. BUT UH, THEN YOU HAVE TO START EXPLAINING TO THEM THAT, UH, YOU, THEY NEED TO POSITION THEMSELVES, ESPECIALLY IF THEY'RE A BRAND NEW START, NOT FOR BANK FINANCING, BECAUSE THE BANKS WON'T REALLY, UH, FINANCE PEOPLE WHO DO NOT HAVE THE FINANCIAL ATTRACTION OF A COUPLE OF YEARS, EVEN WITH A SEVEN A LOAN FROM THE SBA. SO YOU HAVE TO START PREPARING THEM FOR INVESTORS. AND YOU'VE TALKED EARLIER ABOUT ANGEL INVESTORS AND I'M ALSO A MEMBER OF THE HOUSTON ANGEL NETWORK AND THE ANGELS, UH, THEY LOOK FOR PEOPLE WHO HAVE DEMONSTRATED THAT THEIR TECHNOLOGY NOT ONLY WORKS, BUT MORE IMPORTANTLY, THEY'RE LOOKING FOR WHO IN THE MARKETPLACE ACTUALLY HAS SHOWN INTEREST IN IT AND WAS WILLING TO AT LEAST PILOT IT AND TEST IT. SO I USUALLY DIRECT TOWARD PEOPLE TOWARDS DEMONSTRATING WHERE THAT TECHNOLOGY HAS ACTUALLY BEEN USED AND HAS SHOWN NEED FOR IT, NOT, WE TRY TO SHY PEOPLE AWAY FROM PUSHING AN IDEA INTO THE MARKETPLACE. WE'D RATHER SEE DE THE MARKET PULL THAT IDEA INTO THE MARKETPLACE. SO THOSE ARE THE TYPES OF THINGS I TEND TO COACH PEOPLE ON WHEN THEY FIRST WALK IN AND I FIGURE OUT WHERE THEY ARE ON THEIR JOURNEY. THANK YOU, JIM. UH, THANK YOU BOTH, UM, FOR THE AMAZING INSIGHTS. THEY, THIS BRINGS US TO THE END OF THE DAY'S EPISODE, FUELING THE DREAM, HOW TO COMMERCIALIZE YOUR INNOVATIVE IDEAS AND SECURE FUNDING IN HOUSTON STARTUP ECOSYSTEM. A BIG THANK YOU TO OUR INCREDIBLE GUEST, UM, FOR SHARING SUCH VALUABLE INSIGHTS, YOUR PERSPECTIVE AND, UH, ADVISOR HELPING TO SHAPE THE FUTURE OF INNOVATION RIGHT HERE IN HOUSTON. UH, IF TODAY'S CONVERSATION SPARK IDEAS OR RAISE QUESTIONS FOR YOU, WE'D LOVE TO HEAR FROM YOU. AND REMEMBER, IF YOU'RE AN ENTREPRENEUR LOOKING FOR GUIDANCE SCORE IS HERE TO HELP. YOU CAN REQUEST A FREE BUSINESS MENTOR@SCORE.ORG OR VISIT SCORE HOUSTON TO CONNECT WITH LOCAL SUPPORT. THANK YOU FOR JOINING US, AND UNTIL NEXT TIME, KEEP DREAMING BIG AND KEEP BUILDING. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.