Capital Factory’s mission is to identify and nurture capital efficient technology startups in Austin, Texas. We help people quit their jobs and become entrepreneurs.
At Capital Factory, you will meet your co-founder, first employee, mentor, press or investor. You’ll sharpen your skills and up your game. You’ll be surrounded by other entrepreneurs going through the same challenges you are.
The capital requirements of technology based businesses have dropped. Open source software, cloud computing, performance-based marketing, social distribution have driven costs toward zero.
$1 million in profitable revenue with less than $1 million in funding.
Today, it is possible to create a company with less than 1 million dollars in funding, solve valuable problems, achieve a profitable run-rate of 1 million dollars per year, and change the world. These businesses may raise additional capital or grow organically, but their destinies remain in their hands.
Austin is the best place for lean startups. Our relatively low cost of living, low cost of office space, well-connected technology industry, and talented job pool make every dollar go further. The University of Texas is a top 10 Computer Science department and the largest in the country.
Capital Factory is comprised of mentors and investors who have built, scaled, and sold lean startups themselves. Joshua Baer, Bill Boebel, Jason Cohen and many other Capital Factory mentors have bootstrapped their technology businesses to millions of dollars in revenue. We have been in the same shoes as these entrepreneurs.
Startups today spend too much time fundraising. By the time they finish one round and collect all the paperwork it’s time to start raising the next one. Fundraising isn’t just distracting, but more importantly it drives startups increasingly to non-profitable models. 9 of 10 businesses never make enough money to cover costs, even when they’re “successful” at getting to round C or “successful” at getting 100,000 active users.
Startups selected by Capital Factory won’t have to waste time fundraising; once they are in, they have enough funding to get to profitability, and they can focus their efforts on what matters: product, revenue, and scale.
We believe in self-sustaining businesses. We believe those create long-term jobs. We believe those create actual value, not temporary or perceived value. We believe those result in more and more constructive options for the business and for founders and for investors.
We believe a business without revenue isn’t a business, it’s an experiment in search of a business.
We will encourage them to focus on revenue, not funding. Our goals for each company usually sounds very similar. First, get to $10k/month in revenue. Then, get to $100k/month in revenue and be profitable. Right now, we believe 1 million dollars per year in profitable revenue is a magic number: our goal is to help startups achieve this because we believe it is the path most likely to produce enduring and valuable businesses where everyone wins.