Capital Factory, Silverton Partners and FLOODGATE Announce Matching Investments for All Capital Factory Incubator Companies

$150K Total Will Be Invested in Each Qualifying Venture; Program Begins Immediately

Capital Factory, Silverton Partners and FLOODGATE today announced a joint initiative to provide $150K of financing for every qualified start-up that is selected to participate in the Capital Factory program.

The program starts immediately. Finding two Capital Factory mentors who agree to invest $25K each automatically triggers a matching VC investment of $50K from Capital Factory’s in-house fund, and $25K each from Silverton and FLOODGATE.

@CapitalFactory + FLOODGATE + @SilvertonVC = $150,000 pic.twitter.com/f7S1yZ6QD8

— Capital Factory (@CapitalFactory) February 3, 2014

Announcing @silvertonvc & FLOODGATE will match investments made by CF Partners in our Incubator startups. @kipmcc @m2jr @mflager @JoshuaBaer

— Capital Factory (@CapitalFactory) February 3, 2014

This brings our 2014 Incubator companies a strong connection to a local VC and a top Silicon Valley VC with a total of $150,000 investment.

— Capital Factory (@CapitalFactory) February 3, 2014

The matching investment is usually made using a convertible note with a $3m cap and 20% discount. 2 CF Partners must invest $25k each.

— Capital Factory (@CapitalFactory) February 3, 2014

1. Join the Incubator 2. Convince two CF Partners to invest $25k each. 3. Get $50k from us and $25k each from @SilvertonVC and Floodgate

— Capital Factory (@CapitalFactory) February 3, 2014

The list of Partners eligible for matching funds are labeled Partner here (first you must join the Incubator) http://t.co/0zlEXKpRka

— Capital Factory (@CapitalFactory) February 3, 2014

In order to qualify for matching funds, startups must first be accepted to our Incubator. Apply at http://t.co/FwdijLzWoh

— Capital Factory (@CapitalFactory) February 3, 2014

been a mentor at @CapitalFactory since Day 1 & have since funded @Sparefoot @Famigo @RecycleMatch @NuveTeam from @SilvertonVC. Who's next?!

— Kip McClanahan (@kipmcc) February 3, 2014

A Thunderlizard comes out of Austin every year. I want to find it, fund it and encourage more! via @CapitalFactory http://t.co/9y07GtKUKP

— Mike Maples (@m2jr) February 3, 2014

Big milestone today for @CapitalFactory — announcing matching investments from @SilvertonVC and Floodgate, 2 of the VC’s I respect the most.

— Joshua Baer (@JoshuaBaer) February 3, 2014

Press who want to learn more about our matching investment should contact @joshuabaer @kipmcc @m2jr @joshdilworth

— Capital Factory (@CapitalFactory) February 3, 2014

About Capital Factory

Capital Factory is the entrepreneurial center of gravity in Austin, Texas. Located in the middle of downtown, Capital Factory has 50,000 square feet full of startups and entrepreneurs. Members take classes to learn the skills that startups need, attend meet ups to find a co-founder, rent a desk for their startup or apply for funding and mentorship in the Incubator.

Our mission is to improve entrepreneurial outcomes. We invest intellectual, social, human, and real capital in passionate entrepreneurs who want to change the world. In so doing we also create new jobs and new advantages for Central Texas.

About Silverton Partners

Silverton Partners is an early-stage venture capital firm based in Austin, Texas. Silverton collaborates with exceptional entrepreneurs who are committed to attacking growth markets with cutting-edge products or services.

The principals of Silverton Partners have over two decades of venture experience in IT infrastructure and management software. They have invested in start-ups such as Tivoli Systems (IPO/acquired by IBM), Hyper9 (acquired by Solar Winds), SpareFoot, WPEngine, and SailPoint.

About FLOODGATE

FLOODGATE is a Silicon Valley based, early-stage micro-VC fund focused on startups that fundamentally disrupt existing large markets or create new market categories.

The firm’s portfolio includes consumer-focused companies such as Twitter, ngmoco, Modcloth, Lyft, Playdom, Refinery29, TaskRabbit, Reputation.com, Smule, and Weebly as well as business-focused companies such as Ayasdi, Bazaarvoice, BigCommerce, ClearSlide, DoubleDutch, Egnyte, Okta, Sparefoot, Spiceworks, UpThere, and Xamarin.

Media contact

Josh Jones-Dilworth
Jones-Dilworth for Capital Factory
josh@jones-dilworth.com
917-209-2956

Or visit
http://capitalfactory.com/press 

Austin’s Sparefoot is offering 1 year of free self-storage rental to the winner of Capital Factory’s 2nd annual Move Your Startup to Austin competition at the upcoming SXSW Interactive Festival.  The total prize package is now valued at $150,000 and climbing.  Read more here.

We don’t need to convince entrepreneurs to move to Austin – almost every day we receive emails from people deciding to do that on their own!

Maybe it’s because Austin is the most cost-effective place to launch a startup or the pipeline of talent coming out of the University of Texas. Maybe it’s because of the 300+ days of sunshine each year or the vibrant live music scene. It’s no surprise that Austin is one of the fastest growing cities in the US and everyone wants to live somewhere that is growing and booming versus the alternative.

So why should we put together a $50,000 cash investment prize, more than $100,000 in other prizes, and roll out the red carpet to bring one more startup here?  Come find out at Capital Factory’s 2nd Annual Move Your Startup to Austin competition on March 7 during the upcoming SXSW Interactive Festival.  Five startups will compete in an epic pitch competition for a cash investment, office space, acceptance into the Capital Factory incubator program and more.

Thanks to our prize package sponsors:

FLOODGATE

$25,000 cash investment

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Silverton Partners

$25,000 cash investment

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Sparefoot

1 year of free self-storage rental

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The McLean Group

Free 409A business valuation

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Car2Go

5 hours of free service

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uShip

Relocation package

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FoundersCard

Free 1 year membership

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KHRG

20 hours of free legal consulting

Looking for a place to rest your feet but still get down to business during SXSW? You’ve found it! Capital Factory is offering private office space where your team can relax, be productive, and be stationed in the heart of downtown. Take a meeting, make a phone call, print a document, and more; our staff are pros at accommodations. Please note these rentals are not available for recreational activities. Not to worry! You’re welcome to attend our public events happening on the 16th floor.

Includes access to the 5th Floor and 16th Floor:
9AM-7PM
Cost: $3,000
(Mar 7 – Mar 16, 2014)

Amenities Included

• Tables and chairs for 4-5 people in a private, lockable office
• 2 door keys
• 500 Mbps up/down on Time Warner Cable Fiber Network (Wifi or LAN)
• Snacks, coffee, soda and beer
• 1 VIP Pass to our SXSW Lounge
• Access to on-site staff
• Invitation to Capital Factory Member Events

For more information or to book, please contact Sarah Cox – sarahcox@capitalfactory.com.

Here is a great graphic showing some of the many reasons why everyone is moving to Austin. Here is one more… five lucky startups are going to get to pitch on stage at SXSW and one of them is going to win a $50,000 investment prize to move their startup to Austin! Learn more.

Every year we put together the Austinpreneur VIP list of Entrepreneurs, Hackers and Investors coming to Austin during SXSW.

*** this is not affiliated with SXSW and does not get you access to SXSW Panels or other events ***

The VIP list gets you access to the Capital Factory VIP lounge all week as well as invitations to many other exclusive events.

• Catered meals at meal time
• Snacks & drinks
• A desk to work at
• Conference rooms and phone rooms
• Lifesize video conferencing
• A 500 megabit fiber Internet connection
• Power to recharge
• VIP access to the ATX Startup Crawl
• Invitations to other VIP events during SXSW

If you know anyone who should be on the list, please register them here (password is “austinvip”).

If you want to extend an invitation to our list, we’ve got it indexed by geography, investors, entrepreneurs, press, and more. It usually ends up at about 300 people total so that it’s never too crowded. Email vip@capitalfactory.com with details about the event.

Capital Factory is expanding! We recently took over the 5th floor of the Austin Centre building, the same place we’ve called home for 5 years now. Right now it has 80 little 3-4 person offices, some square, some…odd. It’s a little dark and sad, and we want it to be an amazing spot for entrepreneurs to kick ass and take names. We’ve come up with a few ideas to make it brighter and awesome, but we want to hear your ideas.

What type of space will make YOU, as a tech startup, most productive and happy?

Team rooms for 4 people? 10 people? Single person offices? Cubes? Bean bags? A media studio? Nap pods? Ball pit? Punching bag? Hot tub? More meeting rooms and phone booths? Tell us what’s most important to you!

Some inspiration if you need it:

• http://www.joelonsoftware.com/items/2006/07/30.html
• https://picasaweb.google.com/spolsky/FogCreekSNewOffice
• http://www.telegraph.co.uk/technology/picture-galleries/9461561/Inside-Googles-quirky-new-London-headquarters.html
• http://officesnapshots.com/2013/06/05/inside-dropboxs-urbanized-san-francisco-offices/

We had an awesome 2013.

• 14 investments

• 42 incubator companies

• 50 mentors

• 200 coworking companies

• 500 events

• 500 coworking members

• 23,000 attendees

• 50,000 square feet

Every number is going to be bigger in 2014!

Welcome to Austin, Mr. President.

In May we were honored to welcome President Barack Obama to Austin. Hundreds of Austin entrepreneurs got to see him speak and 5 startups got to give him their pitch! Find out what our message was to him.

What’s coming in 2014?

• Device Lab – We’re launching the Capital Factory Device Lab this year which will provide a wide array of mobile phones and tablets for Austin entrepreneurs to “check out” the way you might check out a book from a library. We also have other programmable devices such as Google Glass, Pebble watches, and Spheros. We’re going to try and make this resource widely available to the community.
• Video Lab – The Capital Factory Video Lab will be a turnkey video room for recording pitches, interviews, podcasts, demos and other videos startups need. We’ll have cameras, lights, backdrops and editing equipment as well as someone who knows how to use it all and is available to produce and edit the final product. We also intend to make this widely available.
• 5th floor renovations – We’ll be renovating the 5th floor of the building that we acquired in August. You can be sure we’ll make it as distinctive and amazing as the 16th floor! The top floor is all open and collaborative and the lower flower is all small offices for getting shit done. Most startups start on the top floor and then move downstairs as they grow.
• Video streaming and recording – our Lifesize video equipment is set up in all of the conference rooms, the coworking area and the classroom. In 2014 we’ll be recording and streaming all of the events that happen at Capital Factory. We’re bringing the best of Austin to the rest of the world!
• Google Fiber – Capital Factory and the Entrepreneur’s Foundation were selected by the City of Austin as one of the 100 community sites to receive Google Fiber. Nobody knows the exact dates, but because we’re downtown where there is already a lot of connectivity and City Hall is nearby we expect to be one of the first installations.
• Ignite Austin – We’ll be re-igniting Ignite Austin again this year after being dormant for a few years. If you had 5 minutes, what would you say?
• Austin Invades Silicon Valley Demo Day – A few years ago we took a bunch of Austin startups to NYC for an investor Demo Day. This year we’re taking a trip to Silicon Valley. Get ready to show off the best that Austin has to offer and bring some investment dollars back home.
• SXSW – Last year SXSW was a huge success and this year promises to be bigger and better. We’ll be hosting a VIP lounge again the entire time, plus lots of other programming. The Startup Crawl, Demo Day, Move Your Startup to Austin, InteractATX and more!
• Startup Week – Another snowball that keeps getting bigger – expect to see great things from Startup Week this year in the fall.
• Texas Emerging Technology Fund RCIC – You’ll be hearing more and more about the ETF funding available to startups because we’ve signed up to help spread the word and teach startups about the process.
• More funding options – We’ve got some other exciting announcements in the works that will bring more funding options to Austin startups.

The scary thing is, that’s just the beginning. It’s only January 1 and that’s just the things that we know about today. Put on your seatbelts, because 2014 is going to be a wild ride!

(Contributed by Gordon Daugherty, Capital Factory President)

Hopefully you are reading this before you decide how much to raise.  I’m referring less to very early seed funding just to get your MVP product built, which in many cases costs little or nothing, and more thinking about raising money after your first prototype product is built and/or your initial validation is completed.  But the basic concepts outlined in this blog post apply to all fundraising stages.

If you’ve already decided and communicated how much you are raising, you might be getting the obvious follow-up question: “Why is that the right amount?”  How do you answer?  What was your logic in determining the amount?

Read the full blog post here.

(Contributed by Gordon Daugherty, Capital Factory President)

Initially made available by Y Combinator (YC) in 2013 and subsequently updated in late 2018, the SAFE investment instrument was intended to improve on the highly popular convertible note used by startups during the seed stage or as a short-term bridge between equity funding rounds.  SAFE stands for “simple agreement for future equity” and it is still most popular in California.  However, over the years since it’s release it is being used more in other parts of the country.

The purpose of this article is to review the elements that make up a SAFE investment, compare them to a convertible note and generally help both entrepreneurs and investors decide which is more appropriate for their situation.

Read the full blog post here.