Capital Factory

Capital Factory Invests in Five Startups for 2009 Fund Also Recognizes 5 Additional Finalists

Austin, TX (PRWEB) April 22, 2009 -- Capital Factory, an early stage technology incubator in Austin, Texas, announced investments in five emerging technology startups selected to participate in its inaugural 2009 summer program. Each company will receive a cash investment of up to $20,000, more than $20,000 in free services, and mentorship from some of the top entrepreneurs in central Texas. The free services include office space, legal counsel from Wilson Sonsini Goodrich & Rosatti, public relations support from Porter Novelli, and accounting support from The Accounting Group and vCFO, among many other benefits.

Investments:

    * Cubit Planning - Environmental reports at the click of a button

    * Famigo - Mobile games that bring the family together

    * Homstie - Person-to-person marketplace for storage space

    * Hourville - A marketplace for services by the hour

    * petzMD - Website for Pet Health, from A to Z

Capital Factory also recognizes five additional finalist startups that were top runners among the program applicants as well, including:

    * Infochimps - A central website to find any dataset worldwide

    * Notesmart - Buy & sell classroom notes efficiently

    * Pear Analytics - Marketing decision analytics

    * POLCO - Public policy portal for measuring your representation

    * ProspectIdentify - Sales intelligence tool to find who to call, when, and what to say

The five startups were selected from a list of more than 250 applicants and five additional companies were recognized as finalists. Applications were submitted from all over the country although more were from Texas than any other state. Four of the five startups were already located in Austin and one, Homstie, will be relocating from California this summer.

"We were only planning on investing in three startups this year," said Capital Factory managing director, Joshua Baer. "But we received three times the number of applications that we expected and ended up investing in five! We just couldn't pass up the opportunity to work with these entrepreneurs."

The selection process included a one page application and five minute video. After reviewing hundreds of applications, about five percent were invited to in-person interviews with the mentors. With many promising entrepreneurs to choose from, the mentors focused on startups who they could help the most and with the greatest chance of success.

"The interviews helped us understand what these companies needed and the extent to which we could help them," said Sam Decker, Capital Factory managing director. "All of them stated that the money helped, but the mentorships were what they needed to get their idea off the ground or to the next level."

The mentorship program starts on May 22 and lasts throughout the summer, ending with a "Demo Day" where the five startups will present their business to investors, the press, and the world.

About Capital Factory:

Capital Factory is an early stage technology incubator based in Austin, Texas. Startup companies participate in an intense 10-week summer program that gives them up to $20,000 in cash, more than $20,000 in free services, and mentorship by a group of successful entrepreneurs. The program culminates in a demo day where the startups present to investors, the press, and the world. For more information on Capital Factory, visit the website at www.capitalfactory.com or on Twitter @capitalfactory.

Click here for the full list of 2009 mentors

For press inquiries, contact:

Caroline Traylor

Porter Novelli

(512) 241-2239

carolinetraylor [at] capitalfactory.com

Video Pitch Review

Most of the companies who submitted applications to Capital Factory made them public on YouTube or their website and included the words Capital Factory so you can just search YouTube to find them. Here are some of our favorite videos. Note that this is not a measure of how we evaluate their business - this is about the quality of the video. You'll see how we rate the businesses when we announce the winners.

Best Instructional Video - Homstie

Best Video Editing - InfoChimps

Best Background - ShortOrderPhoto

Best Voiceover - PetzMD

Most Likely to Get Arrested - dSpot

(there were numerous candidates in the running for this one)

Best Floating People - BullMooseTicket

Why wasn't I accepted into the program?

I've received dozens of polite, respectful responses to the first round of "Sorry..." letters we had to send out. They pretty much all ask the same question, "Why wasn't I accepted into the program?" I am going to try and respond to each one individually with some feedback over the next two weeks, but here is answer for most of the applications: It's not you, it's us.

The very thing that makes us attractive to work with makes us very busy because in addition to doing the mentoring most of us are running another business. We aren't limiting the number of companies that we select because of a lack of cash - quite the contrary - we've been turning away people who want to put their money into the fund. We have to limit the number of companies because of a lack of time. After reading so many impressive applications, I know that all of the mentors are wishing that we could accept more of them!

In filtering down the applications, we focus the most on companies that we think we can help the most and have the best chance of succeeding. You could have an amazing company idea for a new type of medical device that would save lives and make lots of money. Even though we might believe in the product and the founders we just wouldn't have a lot to contribute to making that a success and so we'd probably pass on it. 

When I say, "It's not you, it's us" what I mean is that in most cases there is nothing at all negative about your company idea or your founders. Figuring out which companies to focus on was a matter of adding up all their strengths - we really didn't talk about negatives. 

Things that made an application stronger:

• one or more of the mentors has experience in that market
• we think we can accomplish a significant milestone within the 10 week program
• the product is sold and marketed over the Internet
• the company has unique competitive advantages 
• the company has paying customers 
• the company has a balanced team with both business and technical resources  
• the product is a good fit for word of mouth marketing and social media 
• more... 

I hope that gives you some insight into how we filtered the applications. I know that there are going to be a LOT of great companies who were not accepted but are going to succeed anyway. I'm bummed that we can only work with a handful! 

Applications closed - what happens next?

First of all, THANK YOU to the hundreds of entrepreneurs who took the time submit an application for the 2009 Capital Factory program. Our goal was 100 applications and you've surpassed that by many times. We're very impressed by the enthusiastic response from all of the incredible entrepreneurs we have met over the past few weeks.

The 20 mentors have already had multiple meetings and have been reviewing applications all weekend. It's already obvious that there will be many more companies that we want to work with than that we will be able to work with. I guess that's a good problem to have, but it's going to be hard to say no. We're going to do everything in our power to make sure that even the companies who are not selected for the program can still benefit from the program. 

So what's next? First we narrow down the list by eliminating companies who don't meet the basic qualifications. Then we will identify a shorter list of the companies that we think we can help the most and ask some more questions by email. Finally we'll interview companies over the phone and in person.

We're still shooting for April 15th to announce the winners. The unexpected surge of applications at the end may push it out a few days but we're not sure just yet. Watch this blog and follow us on Twitter to find out about any changes.