Venture capital firms to back Capital Factory startups

Feb 4, 2014
Austin Business Journal

Two venture capital firms have agreed to invest in startup companies backed by the Capital Factory

Austin-based Silverton Partners and California-based Floodgate Fund LP plan to invest $25,000 apiece to startups backed by the downtown business incubator and co-working space operator. The deal is designed to provide each early-stage company with $150,000 in financing when mentors also invest an additional $25,000 apiece, Capital Factory Managing Director Joshua Baer said Monday

He expects 20-30 startups to be affected by the arrangement this year

The Capital Factory was launched in 2009 by three local serial entrepreneurs as a summer accelerator program. It has since grown to a year-round venture occupying two floors of the Omni building downtown

In October, Baer said Capital Factory plans to take a 2 percent stake in promising local technology startups. It has raised $2 million of a $9 million fund to invest in such companies

The group matches $50,000 angel investments and then targets select portfolio companies for $250,000 follow-on investments. The goal is to gain a 2 percent stake in the most promising local startups, he said

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