Use CreateFont to create a font for the device context. Use SetBkMode to make the text draw with a transparent background. Then use TextOut to draw the text.

Private Sub Form_Load()
Dim mem_dc As Long
Dim mem_bm As Long
Dim orig_bm As Long
Dim wid As Long
Dim hgt As Long
Dim old_font As Long
Dim new_font As Long
Dim old_bk_mode As Long

    Picture1.ScaleMode = vbPixels
    wid = Picture1.ScaleWidth
    hgt = Picture1.ScaleHeight

    ' Create the device context.
    mem_dc = CreateCompatibleDC(hdc)

    ' Create the bitmap.
    mem_bm = CreateCompatibleBitmap(mem_dc, wid, hgt)

    ' Make the device context use the bitmap.
    orig_bm = SelectObject(mem_dc, mem_bm)

    ' Give the device context a white background.
    SelectObject mem_dc, GetStockObject(WHITE_BRUSH)
    Rectangle mem_dc, 0, 0, wid, hgt
    SelectObject mem_dc, GetStockObject(NULL_BRUSH)

    ' Draw the on the device context.
    SelectObject mem_dc, GetStockObject(BLACK_PEN)
    MoveToEx mem_dc, 0, 0, ByVal 0&
    LineTo mem_dc, wid, hgt
    MoveToEx mem_dc, 0, hgt, ByVal 0&
    LineTo mem_dc, wid, 0

    ' Do not fill the background.
    old_bk_mode = GetBkMode(mem_dc)
    SetBkMode mem_dc, TRANSPARENT

    ' Give the DC a font.
    new_font = CreateFont(40, 0, 0, 0, _
        700, 0, 0, 0, ANSI_CHARSET, _
        0, 0, 0, 0, "Times New Roman")
    old_font = SelectObject(mem_dc, new_font)

    ' Draw some text.
    TextOut mem_dc, 20, 20, "Hello", Len("Hello")

    ' Destroy the new font.
    SelectObject mem_dc, old_font
    DeleteObject new_font

    ' Restore the original background fill mode.
    SetBkMode mem_dc, old_bk_mode

    ' Copy the device context into the PictureBox.
    Picture1.AutoRedraw = True
    BitBlt Picture1.hdc, 0, 0, wid, hgt, _
        mem_dc, 0, 0, SRCCOPY
    Picture1.Picture = Picture1.Image

    ' Delete the bitmap and dc.
    SelectObject mem_dc, orig_bm
    DeleteObject mem_bm
    DeleteDC mem_dc
End Sub