Houston Health Ventures starts search for health IT startups at accelerator

If the architects behind the health IT accelerator NextHIT have their way, a city associated with the oil and gas industry along with NASA and aerospace companies will add healthcare entrepreneurs to the mix. Houston Health Ventures kicked off the application process for its inaugural health IT accelerator class today with up to 10 spaces […]

If the architects behind the health IT accelerator NextHIT have their way, a city associated with the oil and gas industry along with NASA and aerospace companies will add healthcare entrepreneurs to the mix. Houston Health Ventures kicked off the application process for its inaugural health IT accelerator class today with up to 10 spaces for healthcare startups.

Houston Health Ventures raised $500,000 to help fund the program, according to a Form D filing with the U.S. Securities and Exchange Commission in April. Part of a healthcare accelerator’s strength depends on solid partnerships and mentors. In this case, it’s the University of Houston’s division of research. Some of the mentors will also come from regional medical institutions, but David Franklin, managing director of HHV and the NextHIT program, declined to say who.

The university’s new Innovation Center at the Energy Research Park will house the accelerator companies.

Although the companies’ geographic origins aren’t important, they are required to establish an office in Houston for the duration of the program. Among the criteria, applicants need to demonstrate what pain point in healthcare their product or service solves, explain their market strategy and their path to FDA clearance, if they need one. The deadline for applications is August 13.

Each of the chosen teams will receive a $30,000 investment from Houston Health Ventures in exchange for a 6 percent equity stake. Mentors who work with companies for one year are also entitled to a 4 percent equity stake. Rackspace will provide each participating team with $24,000 worth of service. The program is expected to start at the end of September.

In a phone interview, Franklin said Houston Health Ventures wants to prove that Texas can be as attractive a place to invest in healthcare startups as the East and West Coasts.

“One of biggest things Texas suffers from is coastal allure.”

Franklin believes that Houston’s angel network has an appetite to diversify investments beyond oil and gas to early-stage healthcare companies.

Although it would seem like a partnership with a regional hospital would be a strong advantage, Franklin said the accelerator isn’t necessarily looking for companies with hospital-facing solutions. “We are looking for something that interfaces with patients.” Still, its proximity to the University of Texas Medical School at Houston is likely to provide a source of potential partners.

NextHIT joins the Health Wildcatters accelerator in Dallas and further demonstrates the rising number of healthcare accelerators opening up in the South.

Houston Health Ventures has so far made one investment. Medical device company Adient Medical developed an absorbable filter to catch blood clots and prevent a pulmonary embolism.