Tag: Capital Factory

11 Startups Join DivInc’s Latest Accelerator Program

DivInc Cohort Three, courtesy photo

In 2016, Preston James, Ashley Jennings, and Dana Callender founded DivInc to bring greater entrepreneurial diversity to Austin’s technology industry.

The 12-week accelerator program, based at Capital Factory, has graduated two cohorts so far and made a big impact on providing women and minorities with greater access to mentors, funding, partnerships and the overall inner workings of the local tech industry.

To date, 18 companies and 24 founders have participated in the DivInc program. They’ve collectively raised nearly $600,000, according to a news release.

On Tuesday, DivInc announced 11 new startups, run by eight women and seven men, for its third accelerator program, which begins Sept. 5th.

The numbers are bleak for funding for diverse founders, with “only three percent of VC funding going to women founders and less than two percent going to African American and Latino founders,” according to a news release.

“Just think about the socioeconomic impact an inclusive, innovative tech startup ecosystem will have,” Preston James, co-founder, and CEO of DivInc said in a news release. “With the population shifting to 51 percent people of color by 2040, it’s not only imperative but essential that these demographic groups be major contributors to economic growth in the U.S. Imagine in Austin alone…with a potential backlog of 1,000 tech entrepreneurs of color and women, and if on average, one out of 25 became successful entrepreneurs that creates 100 jobs and $5 million of wealth. That would translate to 4,000 jobs and $200 million in revenue contributed back to the city.”

The third DivInc cohort includes the following:

● Dr. Jennifer Davis and Stephanie Cantú, founders of Data Bot Box (AI and psychology)

● Dion Jones, founder of enautics (B2B SaaS)

● Roman Gonzalez, founder of Gardenio (Marketplace for Gardeners)

● Shambrekia Wise, founder of FuzeU (Education Tech)

● Yogi Patel, founder of iuzeit (Mobile App)

● Wes Riddick and Cristina Rodgers, founders of Maximus Box (Retail Tech)

● Sara Brinton, founder of Penguino Travel (Travel Tech)

● Stephanie Labay, founder of Retreat Place (Travel and Wellness Tech)

● Anna Renery and Dan Driscoll, founders of Sponsorfy (MarketPlace)

● Ashley Behnke, founder of Spot Loc8r (Mobile App)

● Airion Watkins-Clark and Ethan Isaacson, founders of WutzGood Inc. (Mobile App)

At the conclusion of the program on Nov. 30th, the startups will pitch their startups at a Demo Day event.

Capital Factory: Evolving at Hyperspeed

By SUSAN LAHEY
Reporter with Silicon Hills News

Office_busy
In early 2012, the Capital Factory office on the 16th floor of the Omni was a cavernous space housing only a few oversized bean bag chairs and a really cool conference room woven of branches. (That turned out to be infested with bugs and had to be thrown away.) But in a partnership between Capital Factory, General Assembly and the Austin Chamber of Commerce, the incubator/accelerator has become something like the nerve center of the Austin startup community. Other incubators, like Austin Technology Incubator, have been around a lot longer. But Capital Factory, with its Googlesque environs and ideal location, nailed the zeitgeist.

Today, Capital Factory has spilled into three floors: The 16th, the fifth floor co-working spaces with a hybrid of open areas and offices, and part of the seventh floor with individual offices, where the international program is launching. Nearly 120 companies have joined the accelerator program and hundreds more from all over the world apply each month. Companies engage with the program an average of six months to a year, though, Gordon Daugherty, Accelerator Director, said they never really “graduate.” If a company wants to reconnect with mentors or seek funding for future rounds, they’re encouraged to do so.

Life in the CF Accelerator

On the first Friday of every month, except for March, December and August, Capital Factory mentors interview a handful of companies that set themselves apart from the pack. By Monday, the five-to-10 who are chosen receive invitations to join. Companies that joined in the latest bout are Authors.me, a platform that helps writers submit book proposals strategically to agents and publishers who might be interested in their work; PopUp Play, which will launch at the end of October, that allows kids to design their own modular cardboard play sets on line—castles and ginger bread houses—that kids can then color, play in, and interact with other digital elements like catapults; Trago is a smart water bottle interface that uses the cap on the bottle to measure your hydration levels as well as the number of plastic bottles you’ve avoided using. ROIKOI is a recruitment referral system; Assist 2 Develop is a freelance marketplace for hardware product development professionals; Rappora is a home care team coordination tool; and HuntingLocator is a service to connect landowners hunting guides and outfitters with hunters.

“Being an entrepreneur is hard, period,” said Monica Landers, founder of Authors.me. “(The accelerator program) creates the support structure you need from a peer standpoint, an experiential standpoint. If you have holes in the team, you can fill those holes here…. Each startup is completely different in its makeup, its goals, what it has achieved so far. There’s support for each kind of business and group.”

Josh Baer, courtesy photo.

Joshua Baer, cofounder of Capital Factory, courtesy photo.

“If you’re trying to solve a problem, usually someone in the room has already solved it,” said Bryan Thomas, cofounder of PopUp Play. “You all kind of know a little bit about what each other are going through. Today at lunch we were talking about something and it turned into this help session for one startup. We spent, like, 45 minutes. I can’t tell you how many times I’ve had Eureka moments talking to these people…. You start talking and they say ‘I know exactly what you’re thinking and this is what my recommendation is to you and they’ve completely nailed it. You can take the advice or leave it, but at least it’s good advice.”

The Accelerator focuses on areas where its mentors have expertise. “We can put a dotted line around certain communities of interest,” said Gordon Daugherty, Accelerator Director. “We have eight or ten health tech startups, we have real estate startups, marketplaces, education tech…. Sometimes it happens opportunistically. We had a life sciences company that had a software component and we knew we could help (the founder). That attracts other mentors with life sciences experience that will attract other startups. Three cycles ago we had our first true life sciences startups.”

In joining the accelerator, startups give up two percent equity in their companies. They have the opportunity to convince two of the 120 CF partners to invest $25,000 each into their companies and if they’re successful, CF will match that with a $50,000 investment. Plus Silverton Partners and FLOODGATE will each invest $25,000. There’s an opportunity for more investment down the road. So far, CF isn’t able to predict what kinds of exits or returns will be generated but feels its unique model will demonstrate advantages.

“Since we’ve only been running the current version of the program for 2.5 years and only making our matching investments for about two years, we aren’t yet expecting many exits,” Dougherty said. “We’ve had a few so far but won’t officially disclose them to our limited partners for another week or two when we publish our first half financial report.”

“Most meaningful exits take 5-10 years at least,” said Joshua Baer, cofounder of Capital Factory. “Some of the first companies we invested in like Sparefoot.com and WPEngine.com have raised tens of millions of dollars and are worth hundreds of millions, but they aren’t an exit yet.

The companies that have exited are generally ones that were acquired before they got that big. Some public examples are Keepstream, Infochimps, CSC, Zing, BigCommerce, and Kenguru, KLD Energy. We are so early stage that we don’t try to calculate returns ahead of time. Many of us have bootstrapped businesses without funding so we are comfortable with a broad range of businesses. But we might tell you that your fundraising goals are unrealistic because of the market size/scale.”

CF’s Role in Austin

CapitalFactoryWhiteLogoWhile other incubators and accelerators have moved into town and made their own marks—Tech Ranch was founded a year before Capital Factory—such as Incubation Station, Techstars, DreamIt Ventures and International Accelerator, Capital Factory has joined SXSW as a kind of lightning rod drawing attention to the Austin entrepreneurial ecosystem. At times that lightning rod quality has generated hushed criticism. Austin is a town that prides itself on a supportive “All boats rise” culture, and when some boats rise several stories higher than others, there’s some grumbling.

Dougherty said Capital Factory doesn’t see itself in competition with other incubators or accelerators. There are more than enough great ideas to go around and each of the incubators has its own style and flavor of mentorship and education.

Michele Skelding, SVP of Global Technology and Innovation for the Austin Chamber of Commerce cited Capital Factory’s culture of opening itself up to the community as part of its success.

“We have an awesome active and collaborative ecosystem here, with our creative class, entrepreneurs, proximity to a tier 1 research university, and growing access to early stage funding,” she said. “Capital Factory supports a ton of programming and community events. They encourage everyone to come to the table and that’s a huge strength.”

“We do have discussions about where do we take this next?” Dougherty said. “There is a sense of stewardship but also the message that we’re not in competition with other things going on in town. Austin is a collaborative culture anyway and that’s hugely beneficial for the city. We have the pleasure and the pride of being one cross-section of that ecosystem.”

Quantcast Opens Austin Office and is Hiring

Quantcast-LogoQuantcast, a digital advertising and audience measurement firm, is opening an Austin office and is holding a recruiting event at Capital Factory on Wednesday.

The San Francisco-based company’s new office will be located at Capital Factory in downtown Austin. It is hiring sales, client services and media professionals.

“Austin has one of the highest start-ups per capita in the United States right now,” Stephen Collins, Quantcast’s chief financial officer, said in a news statement. “It’s fast growing, eclectic and attracts a lot of talented tech professionals. We believe our Austin presence will add to the local tech community and be accretive to our global company culture.”

Quantcast foresees big growth for its business and industry. Real time bidding digital display advertising is projected to increase from an estimated $14 billion in 2015 to $20 billion in 2016, according to eMarketer.

“This is just the beginning of a very exciting time for Quantcast corporate sales and services,” Megan Edwards, global head of client services, said in a statement. “We look forward to a strong 2015 and an even stronger 2016 with our joint offices and teams.”

Quantcast, founded in 2007, has raised $65.3 million in four funding rounds, according to its CrunchBase profile.

SchooLinks Serves as Matchmaker for Students and Colleges

Katie Fang, founder of SchooLinks. Courtesy photo.

Katie Fang, founder of SchooLinks. Courtesy photo.

Deciding on a college can be one of the most perplexing decisions a high school student and their family face.

Some students don’t know about all the opportunities available to them, said Katie Fang, founder of SchooLinks.

“It’s very hard for a student to navigate the admissions process,” Fang said.

To help match students with higher education institutions and scholarship opportunities, Fang created SchooLinks.

The idea sprang from consulting Fang did for schools helping them to recruit students. Fang is from China, moved to Canada and graduated from the University of British Columbia in Vancouver.

Fang realized that if one school wanted her help that others may also. So she created a platform to connect students with schools and educational consultants. She launched the site, SchooLinks.com, a little over a year ago in Los Angeles.

The site is free for students. They log on to the website and create a profile and from SchooLinks they can apply to different schools and multiple scholarships. They can also elect to receive help from consultants to pick the right school. The site also offers tips on essay writing and submitting a successful college application.

“We give them recommendations according to their unique circumstances,” Fang said. “We help you achieve your maximum potential. We increase your chances of getting scholarships.”

SchooLinks is working with more than 2,000 schools all over the world, Fang said. The international search feature can open up a student’s search to schools abroad they might not have considered, Fang said.

“It’s a cost effective way for schools to market themselves to students,” Fang said.

SchooLinks makes money through an online software as a service model. Schools subscribe to the site to recruit students. With the platform, schools can view profiles of students. SchooLinks also provides data and analytics to the schools on who is viewing their school and where they are coming from.

SchooLinks moved to Austin a few months ago and joined the incubator at Capital Factory. It’s currently bootstrapped but it is raising a seed round of funding, Fang said.

There’s a ton of edtech going on in Austin and that makes SchooLinks a good fit for the city, said Joshua Baer, cofounder of Capital Factory. One of the top startup technology industries in Austin is the educational technology space with startups like Civitas Learning, Aceable, Blackboard and Sapling Learning.

With young startups, they don’t have a lot of data yet, so Capital Factory evaluates the team and Fang is very entrepreneurial at a young age and impressive, Baer said.

“Katie really knows this space she is working in,” Baer said. “She’s the kind of person you meet and you know they are going to be really successful. “

And Fang likes Austin. It’s affordable and she’s surrounded by other like-minded entrepreneurs, she said.

“Austin is an up and coming technology region,” Fang said. “And the burn rate is way too high in Los Angeles.”

All seven members of the SchooLinks staff moved to Austin from California. They are all sharing a house together.

“It’s a very young and vibrant city,” Fang said.

Asana Launches a Big Marketing Campaign in Austin

By LAURA LOREK
Reporter with Silicon Hills News

austin-map-blog“Work about work” is killing productivity in the workplace, said Kenny Van Zant, an executive with Asana.

Too many managers find themselves bogged down with email and meetings about meetings and very little work is actually getting done, he said.

Asana, a web and mobile software application that allows teams to work together without email, is the solution to improve efficiency and productivity in the workplace, Van Zant said.

Dustin Moskovitz, co-founder of Facebook, and Justin Rosenstein, former Facebook engineer, co-founded Asana to create a better way for teams to collaborate. The three year old startup, based in San Francisco, has raised $38.2 million in four rounds, according to Crunchbase. And in the last few years, Asana has gotten a lot of traction in the marketplace, Van Zant said.

“We have hundreds of thousands of teams across the world using Asana,” Van Zant said. “We’re one of the fastest growing enterprise software companies ever.”

Van Zant, former chief product strategist at SolarWinds, recently returned to Austin to meet with Asana customers and others about its upcoming marketing launch locally.

“We look at the markets where we have a ton of growth and diversity and Austin rises to the top,” Van Zant said.

Kenny Van Zant with Asana, courtesy photo.

Kenny Van Zant with Asana, courtesy photo.

And he’s familiar with the Austin market. Before SolarWinds, Van Zant worked as head of strategy and corporate development at Motive, maker of broadband service management software. And he co-founded BroadJump in 1998 and served as its chief operating officer. He’s also from Texas and graduated from the University of Texas at Austin.

“Asana is the kind of product where word of mouth is how it grows,” Van Zant said. “We want to highlight some of our customers and have them help tell the Asana story. We look at markets where we could do that in a concentrated way. Austin is clearly the market.”

Asana also looked at launching in Boston, Chicago, Atlanta, London, Berlin and other cities, but chose Austin as its first city for a big marketing campaign outside of California.

Austin companies using Asana include WP Engine, SpareFoot, RideScout, Spredfast, ihiji and Umbel.
But it’s not just tech companies using Asana, Van Zant said. The City of Austin is also a customer, he said. And restaurateurs like Chi’Lantro Food Trucks and Elm Restaurant Group, which owns Arro, 24 Diner and Easy Tiger, use it and so does Tiff’s Treats, a cookie delivery service.

“Each of these companies speaks to how diverse the story is,” Van Zant said.

On May 13th, Asana is launching its Austin campaign and plans to do some digital advertising with its customers front and center. Asana also plans to take out ads on billboards on West Fifth and other signage downtown.

logoAnd Van Zant will give a talk on accountability at Capital Factory open to the public. Later that day, Asan is hosting a happy hour with tacos and tequila. On May 20th, Asana will provide a free lunch at Chi’Lantro. To find out where the truck will be, Asana asks people to follow its Twitter account. Asana will also host a workshop and provide training to companies interested in using the software. It’s free initially for teams of up to 15 people.

To show how Asana can improve productivity, Van Zant likes to tell the story of Emerald Therapeutics, two biotech researchers from Boston, moved out to the Bay area. They do virus research using robots. They have about 30 people before using Asana and they were spending most of their time managing, Van Zant said. Then they started using Asana and they got back about 75 percent of their time, Van Zant said.

“The same thing is true of your average middle manager inside a company anywhere,” Van Zant said. “You want that person to get back to doing work. Asana becomes the middle manager and handles all of the tedious work about work for you.”

Asana also integrates with all kinds of email systems, Dropbox, Box, Google Docs and other tools.

Editor’s note: Asana is a digital advertiser with Silicon Hills News

How Texas Startups Are Spurring Innovation in the Most Entrenched Industries

Keith Cole, photo courtesy of Water Lens

Keith Cole, photo courtesy of Water Lens

By KEITH H. COLE
Founder and CEO of Water Lens in Austin
Special Editorial Contribution to Silicon Hills News

Being a startup isn’t easy to begin with, but working in a highly-regulated industry like oil and gas can be even harder, especially when it’s also slow to adopt new technologies. We all know the challenges—navigating bureaucratic red tape, getting your product in front of the right people in an extremely competitive industry, and making sure you have the financial runway needed to stay in business over the long-term. These kinds of deals don’t happen overnight, and being in a position to keep the lights on—let alone try to grow—is sometimes the biggest challenge.

When people hear the word “startup,” they typically think of the next social media, dating or food delivery app. But here in Texas, there’s a growing community of entrepreneurs focused on disrupting major industries, tackling big, previously intractable problems, and developing inventive solutions that can spur innovation for the 21st Century.

It wasn’t until the startup incubator 1776 partnered with Austin’s Capital Factory for last year’s Challenge Cup that I realized exactly how many of us there are—and how important it is for us to have resources like 1776 to help us navigate regulations and red tape.

As a veteran of the Texas oil and gas industry, I’ve always looked for opportunities to utilize the benefits of technology and work to make our efforts more efficient.

In 2011, as fracking became increasingly widespread—and yes, controversial—there was an opportunity in the market to develop a new technology that would help oil and gas companies operate more efficiently, improve their bottom line, reduce the amount of unnecessary chemicals used in hydraulic fracturing, and begin to cost-effectively recycle the water used and produced in the oil and gas industry. In short, it was a win-win proposition.

In 2012, I started a company called Water Lens and developed a state-of-the-art, portable, and easy-to-use water testing system that provides accurate, immediate onsite testing results for drilling fluids and frac water in a matter of minutes. This helps oil and gas companies save costs and improve production, but it can also offer consumers additional peace of mind to know that the industry is doing its best to reduce the amount of chemicals used in the process, and is now able to cost-effectively recycle our most precious resource: water.

By 2014, Water Lens was ready to go to market, but in order to penetrate the various state markets, we needed to navigate complex thickets of regulation to grow and scale.

That’s when I heard about 1776, a global incubator and seed fund in Washington D.C. that gives problem-solving startups like mine—startups working to disrupt entrenched industries in sectors like energy, education, health, and transportation—the resources they need to succeed.

What makes 1776 different is that it’s not just about funding—though, like any other startup, we always need additional funding. It was about a special set of expertise and connections that can make the difference between a great idea and a successful one.

These connections proved invaluable as we sought to expand our reach, navigate regulation, cut red tape, and find new investors. Thanks to our relationship with 1776, we have been introduced to key mentors and regulators—including former White House officials, advisors to the U.S. Chamber of Commerce, and key oil and gas industry experts.

Every year, 1776 runs an international competition called the Challenge Cup, which spans 16 cities in 11 countries to identify and bring together the world’s most promising startups working to develop innovative solutions to really difficult challenges.

While Water Lens was honored to win top American honors in the energy category at last year’s Global Finals, we also gained significant exposure to mentors, policymakers, and potential investors just by participating in the Austin and D.C. events.

Last year, seven Austin startups across all four categories made it to the Global Finals of the Challenge Cup, proving that there’s clearly something special going on in Austin’s tech scene. This year, Challenge Cup 2015 is coming back to Austin on February 5th.

The competition is a great reminder that Austin and Texas are producing some of the world’s most promising, problem-solving entrepreneurs—and when we give startups the tools they need to cut red tape and succeed, we can solve really important problems. This year’s Challenge Cup could be the key that unlocks a host of opportunities for Texas’ next world-changing startup.

Keith Cole is founder and CEO of Water Lens, LLC

Weeva is Building a Business Out of Memories

By SUSAN LAHEY
Reporter with Silicon Hills News

Kim Gorsuch, CEO and Founder of Weeva

Kim Gorsuch, CEO and Founder of Weeva

Eric Gould Bear didn’t think Weeva would work for him. He loved the idea—a company that lets people upload stories and photos about a person or an event onto a website, push a button, and out comes a beautiful coffee table book. Cool. Great for regular people, but not for him.

“I’m a designer by trade,” he said. “I’m very hands on with the things that I’m involved with…my wife makes all the photo books in our family on different topics celebrating the kids, pets, house, whatever….my father does the same thing. He spends tons of time. They’re a huge labor of love.”

But as a Capital Factory mentor and Weeva investor, Bear decided he needed to “eat his own dog food” and he commissioned a Weeva book for his parents’ 50th wedding anniversary.

“I’m a pretty fearless guy,” Bear said. “I invest in crazy things. But I had some insecurity around getting started on this.”

He invited 32 people, aged four years old to 80 plus to upload their stories, memories, photos on to the site as collaborators. But, beyond proofing the site for errors, he had no input regarding the completed project.

“The book came out absolutely gorgeous,” he said. “It was an incredible ‘aha’ for me to see how liberating it could be to NOT do design.”

A labor of love

bledsoe coverWeeva is the labor of love of Kim Gorsuch. A long time business strategist, she was one of IBM’s first executive consultants for its customers. She worked as senior vice president in charge of strategy for Lending Tree, helping grow the company from $200,000 in revenue to more than $750 million and she was senior vice president of strategy for IAC and SVP of operations for Rev Worldwide. So she’s always worked at intrapraneurial-type ventures and always looked for an idea for her own company.

But then her father fell ill with Myocarditis, an inflammation of the heart. All his organs failed in one day.

“I realized we were going to lose him and lose all his stories and memories,” Gorsuch said. “I didn’t want that to happen. People came out of the woodwork saying ‘What can I do?’ There wasn’t really anything they could do, so I asked them to tell him a story about how important he was in their lives. That…would make a big impact for both them.”

That was where the idea for Weeva was born. Originally, Gorsuch said, they thought they would have customers create their own books, as other companies do—like Mixbooks. But then they changed the plan.

“It’s hard to do,” she said. “It’s often too tedious and too time-consuming for people to do on their own.”

open book 2 bledsoeInstead, they would create a unique user experience, letting customers invite participants to contribute stories and photos, then and Gorsuch and her designer, Tuscan Knox, would be responsible for the final product. There’s a little bit of tech and a little bit of hands-on design in the final book, Gorsuch said.

Everybody’s got memories

Her first project was an anniversary book for a friend in one of her business networking groups. Jim Bledsoe had planned to do an anniversary book for his parents and begun the process but when he met Gorsuch he thought of giving Weeva a try.

“I asked her ‘How many of these have you done?’ and she said ‘You would be my first,’” Bledsoe recalls. “Kim has a great business career and background and with the combination of her experience, her personality and her vision…the way that hit me was ‘Okay, I’m willing to be the first.’”

“The book met my vision and exceeded my expectations,” he said.

Weeva is a Capital Factory Accelerator program that’s largely been bootstrapped, had a little friends and family funding and is now working on its first real funding raise. Capital Factory has started its own Weeva book. Weeva’s stretching its ideas of its audience. It did one book for someone turning 21. And it has done books for organizations and events.
Recently, it did a book for Leonard Cohen. The book wasn’t commissioned by him, but created by Gorsuch and others who felt like Cohen had impacted their lives. He sent Gorsuch a note, calling the book “amazing.” Book prices range from $100 to $250.

“We’re about connection, meaning and creating things that are beautiful….” Gorsuch said “We still want to make money but we’re super focused on delivering something that touches people deeply…. People’s stories are important. We race through life assuming they’re always going to be there, but they’re not. We make it easy to memorialize them…. The person begins to know ‘My life has mattered.’”

Capital Factory Celebrates its Sixth Anniversary Kung Fu Geek Style

Joshua Baer, founder of Capital Factory, at its sixth anniversary party. Photo by Laura Lorek

Joshua Baer, founder of Capital Factory, at its sixth anniversary party. Photo by Laura Lorek

Capital Factory celebrated its 6th anniversary Friday night with a party at Kung Fu Saloon in downtown Austin.

More than 800 people RSVP’d to attend the event and Capital Factory gave away 400 T-shirts.

Key employees and founders of Capital Factory received giant wooden Jenga blocks with their names engraved on them to commemorate the event.

Capital Factory has come along way since its founding in 2008 by Joshua Baer and a handful of Austin entrepreneurs and investors.

Up until 2012, Capital Factory served as a traditional incubator and accelerator for high-tech startups.

But in May of 2012, Capital Factory evolved into a coworking site as part of the Austin TechLive initiative with the Austin Chamber of Commerce. That’s when Capital Factory began hosting entrepreneurs, companies and others in a 22,000 square foot space on the 16th floor of the Omni building at 701 Brazos Street.

Since then Capital Factory has grown to more than 600 members, 200 companies and funded 40 companies in the last year, Baer said. Capital Factory hosted more than 600 events last year, attended by more than 25,000 people, he said.

Also, President Obama visited Capital Factory in 2013 and met with Baer and several tech startup founders.

This year, Google for Entrepreneurs designed Capital Factory as one of its entrepreneurial “hubs” a network of organizations around the country and world fostering high-tech entrepreneurship.

Capital Factory also recently launched a “device lab” where companies can demo their products and make them available to entrepreneurs and hackers. It also has a video lab that is in beta mode right now, Baer said.

Capital Factory also launched a funding program with Silverton Partners and Floodgate to provide early-stage funding to companies in its incubator program. Companies with $25,000 in support from two Capital Factory mentors will receive another $50,000 in matching funds from Capital Factory’s Fund along with $25,000 each from Silverton and Floodgate for a total of $150,000 in funding.

Capital Factory has 100 companies in its incubator right now and is adding anywhere from five to ten per month, Baer said.

Startups like WP Engine and SpareFoot started at Capital Factory, but they grew too large and moved out.

That’s the idea, Baer said. They’re still part of the network, but once a company gets to 15 employees they need their own space, he said.

“Our goal is to get them to $1 million in annual revenue,” Baer said.

Four Austin Startups Shine at the 2014 ATC Startup Showdown

By LAURA LOREK
Founder of Silicon Hills News

imgres-8The Austin Technology Council’s Startup Showdown builds a bridge between the startup community and those who have more seasoned experiences and companies, said Josh Alexander, founder of Toopher.

Toopher, a security platform that helps businesses authentic and verify their customers online, won the ATC Startup Showdown in 2012.

“As a result we were able to connect and get really, really good advice from those who have been there and done that,” Alexander said.

“We’ve been very fortunate in our trajectory so far and we’ve been able to accomplish a lot, clearly, if not most of it, because of the wonderful community we have here in Austin,” he said. Toopher has raised $2 million.

Alexander spoke at the Austin Technology Council’s CEO Summit on Thursday during a noontime presentation of the four most promising local startups in the 2014 ATC Startup Showdown.

Alexander introduced Joseph Kopser, the CEO and Founder of RideScout, “the Kayak of ground transportation” and the winner of the Startup Showdown from last year. RideScout started in the Austin Technology Incubator. The company created a mobile phone app that lets consumers search and compare aggregated ground transportation options to find the best one. The company has raised seed stage funding last year, built out its team and launched in Washington, D.C., Austin, San Francisco, Boston and Chicago.

“We wouldn’t have gotten to where we are today without ATC and its supporters,” Kopser said.

ATC chose one startup from each of four tech incubators based in Austin including the Austin Technology Incubator, Capital Factory, DreamIt Ventures and Techstars Austin.

Among Austin’s incubators and accelerators there’s a lot of collaboration and cooperation, said Isaac Barchas, director of the Austin Technology Incubator.

“The infrastructure is being built out in a way that makes the whole more valuable than its parts,” Barchas said.

Rick Hawkins, president and CEO of Lumos Pharma, an ATI company.

Rick Hawkins, president and CEO of Lumos Pharma, an ATI company.

The winning company from ATI was Lumos Pharma. The company is developing a drug treatment for autism, said Rick Hawkins, its president and CEO. Earlier this year, Lumos Pharma raised $14 million in a Series A funding round led by Sante Ventures and New Enterprise Associates. The company is using that money to finance pre-clinical and clinical development of its drug to treat Creatine Transporter Deficiency, a cause of autism and other mental disorders.

The winning company from Capital Factory was Cratejoy.

Josh Baer, co-founder of Capital Factory, said the incubator has made 30 investments since October. He said it’s the most active seed-stage investor in Austin right now. Capital Factory launched a syndicate investment on Angellist with $100,000 investment in Cratejoy and the company attracted another $350,000 in investment from around the country, Baer said.

Amir Elaguizy, founder of Cratejoy, a Capital Factory company.

Amir Elaguizy, founder of Cratejoy, a Capital Factory company.

“Cratejoy is an ecommerce platform for subscription-based businesses,” said Amir Elaguizy, its founder.

The company pivoted from Toutpost, a Y-Combinator startup, into Cratejoy after Elaguizy identified an unmet need for a platfrom catering to subscription based businesses. The company launched a Beta program recently and has signed up several paying businesses including Beard Brand, which sells grooming supplies for breads, Sumo Snacks, a subscription based jerky delivery to companies and a tie of the month club. Cratejoy, which has 10 employees, recently moved out of the Capital Factory and into a house in Austin because it’s expanding so quickly and needed more room, Elaguizy said.

Utz Baldwin, founder of Plum

Utz Baldwin, founder of Plum

The winning company from Techstar Austin was Plum, an “Internet of Things” company that makes an app that lets people control lighting in their home from their smartphone. The company, formerly known as Ube, went through the inaugural Techstars class. It has raised $1.5 million, including $307,600 through a successful Kickstarter campaign last year from 1,300 backers. The company has 11 employees and has its prototypes in hand, said Utz Baldwin, the company’s founder.

“I think Austin is the number two city in the country, outside of the Bay Area, for starting up a company,” he said. “We are intent on building a big consumer brand right here in the great state of Texas.”

The winning company representing DreamIt Ventures was Swan, a platform that allows consumers to order beauty services like hairstyles, makeup and manicures to the home or office.

Kerry Rupp, CEO of DreamIt Ventures in Austin, introduced Julia Andalman Swan’s founder. Andalman first pitched her company to Steve Welch of DreamIt Ventures in Dallas but she didn’t think he liked it. Then he called her a week later. He went home and talked to his wife about it and she thought it was a great idea, Andalman said.

YouEarnedIt Gets $1.5 Million in Seed Stage Funding

imgres-5YouEarnedIt, a startup focused on helping companies reward employees, has received $1.5 million in seed stage funding, according to the Wall Street Journal.
The company received the funding from Capital Factory, an Austin-based incubator and accelerator of tech companies led by Joshua Baer and advertising giant WPP PLC, according to the article.
The Greater Austin Chamber of Commerce also recently names YouEarnedIt as one of its A-List Austin startup to watch for 2014. The company’s customers include Gatti’s Pizza, Conde Nast, Y&R, RetailMeNot and Spredfast.
Kenny Tomlin founded the company in 2011. He was replaced as CEO last year by “Steve Semelsberger, a former senior vice president and general manager of California-based Demand Media Inc.’s (NYSE: DMD) social products group,” according to the Austin Business Journal. The Wall Street Journal story listed YouEarnedIt’s CEO as “Autumn Manning, who previously worked as a partner at training and coaching services firm SVI World.”

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