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Capital Factory Gives Austin Its Own Startup Incubator

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While many people in the tech world only make the trek to Austin, Texas once a year for SXSW, the city has a fairly sizable startup community. Now Austin is getting its own Y Combinator-esque program, dubbed Capital Factory.

As with other similar programs, Capital Factory offers entrepreneurs a modest amount of funding in exchange for equity (the program is offering ‘up to $20,000′ in exchange for 5% of each startup). Capital Factory is also advertising ‘$20,000 in free stuff‘, which includes server usage, PR support, and legal help. But the real value from these programs comes from their associated mentors, who work with the startups to help them get on their feet, and help tap into their established networks of VCs and other entrepreneurs.

The ten week long program culminates in a ‘Demo Day’ during which each startup will pitch their wares to VCs, press, and other entrepreneurs.

Capital Factory joins a growing number of programs vying for the attention of eager new entrepreneurs. Aside from Y Combinator, which pioneered the idea, other incubators include TechStars (Boulder and now Boston), Start@Spark (Boston), LaunchBox Digital (Washington, D.C.), DreamIT Ventures (Philadelphia), and Shotput Ventures (Atlanta)

Most of these are regional, but they still draw from the same pool of entrepreneurs (many of whom are willing to relocate temporarily if they get accepted to their preferred program). Recently we’ve heard of some shady tactics like exploding term sheets that are being employed as these programs compete for the same candidates.

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