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Summary:

Capital Factory, Austin’s attempt to recreate the success of technology incubators such as YCombinator and TechStars, today announced the five startups it has chosen to invest in and mentor as part of its inaugural session. The startups will receive $20,000 as a direct investment, $20,000 of […]

Capital Factory, Austin’s attempt to recreate the success of technology incubators such as YCombinator and TechStars, today announced the five startups it has chosen to invest in and mentor as part of its inaugural session. The startups will receive $20,000 as a direct investment, $20,000 of in-kind services, and 10 weeks of mentoring from Capital Factory’s group of entrepreneurs. Capital Factory was created this year to support and boost Austin’s startup and technology community. Below are the five finalists chosen from more than 300 applicants to the program:

  • Cubit Planning – Environmental reports for engineers and building planners
  • FamiGo – Family-focused mobile games
  • Homstie – Person-to-person marketplace for storage space
  • Hourville – A marketplace for services by the hour
  • petzMD – Web site for pet health

With four of these startups aimed at consumers, I’m a little concerned that the guys running Capital Factory missed the Web 2.0 funding bonanza. This group feels especially odd given how successful Austin has been building semiconductor business and enterprise software companies.

But Bryan Menell, a managing director at Capital Factory, notes that the incubator is geared toward “lighter-weight business models” that won’t require a lot of cash in order to get to an important business milestone, such as a paying customer or a beta launch. That means that consumer-facing startups had an edge, as many enterprise software or chip startups need more capital up front (in Austin, Spiceworks has found a nice way around this problem by offering a free enterprise product that’s funded by ads).

The goal of the program is to help these five companies achieve a significant business milestone in time for the August 15th demo day, where they will show off their 10 weeks of work. I’ll check back then.

  1. That’s pretty light investment, not even a small fraction of a salary for one person. What’s the cost to the person taking this $20K loan from the VC?

    Hardly seems worth it … better to probably reach out to a banker, for a small business loan.

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  2. [...] government and The University of Texas to help it through recessions. To augment that, the city has tried to cultivate several tech areas, but so far has failed to replicate the success it had with enterprise software and semiconductors. [...]

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  3. [...] government and The University of Texas to help it through recessions. To augment that, the city has tried to cultivate several tech areas, but so far has failed to replicate the success it had with enterprise software and semiconductors. [...]

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  4. [...] David Cohen from TechStars, Naval Ravikant co-founder of Venture Hacks and Josh Baer from Austin’s Capital Factory, offered much of the expected commentary on how the ability to build cheap startups has changed the [...]

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