Your startup gets $20k cash + 20 mentors this summer @CapitalFactory 2011

Need an excuse to finally try that startup idea, beat your idea into the form of a pitch, and if you’re lucky, get it funded?

Apply to Capital Factory, a seed-stage startup accelerator program in Austin, TX for which I’m a mentor, investor, and this year a Managing Director. (Ooo fancy!) Each year we pick 5 companies to participate in a 10-week summer program which includes:

  • 20 real mentors
    Twenty entrepreneurs who have actually been in your shoes — creating companies from scratch, growing to millions in revenue, and often selling them. No posers, no one who was “there for the ride.” Here’s the list; see for yourself. You’ll get both one-on-one time and weekly group meetings.
  • $20,000 in cash
    You can spend it however you want — quit your day job, buy some ads, license technology, whatever you need. Where does the money come from? From the mentors themselves, personally.
  • $20,000 in stuff
    Free legal services to set up agreements, contracts, and EULAs, free graphic design work to make a nice logo and website, free PR services for product launches, free office space, free website hosting, free software, and more.
  • Raise money and awareness at Demo Day
    At the end of the program is “Demo Day,” where you get to pitch in front of 150 investors — both angels and VCs, both individuals and firms. Every year one of the five companies was funded within a week of Demo Day, and others soon after, frequently because of relationships started at Demo Day. Even if you’re not looking to raise money, it’s an experience and personal networking event. We have fantastic speakers too — in years past we’ve had Mike Maples, Naval Ravikant, and Dave McClure.

For more details, including the application process and a 3-minute video which includes interviews from the 2009 and 2010 companies, see the Capital Factory home page.

The deadline is March 20, so get cracking!

Want a leg-up on the competition? Start with my advice garnered from last year’s application process. And stay tuned on this blog — I’ll be posting more advice on pitching.

Questions? Leave a comment.

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  • http://www.swaglove.com Casey Schorr

    Just looked into this further, I’m going to reach out to you personally about sponsoring the 10 companies with free t-shirts & swag. Not only for the founders to wear around every day, but also as an online giveaway to help with customer development efforts. For example, we have many startups using our web app to send free swag to survey respondents, early beta customers, evangelists, and for social media contest prizes.

    Every startup I know buys custom t-shirts, but there is no good simple web-app to manage your “swag” from end-to-end. It would awesome to help out Capital Factory by sponsoring and to simplify the procurement of swag for your 10 startups.

    I even thought briefly about applying for the program! I know being around TechStars here in Boulder it’s a no-brainer to join something like this. The networking and mentorship is worth 5% alone, cash is just a bonus!

    • http://blog.asmartbear.com Jason

      Much appreciated! Contact me personally to coordinate.

  • Ondrej

    Hi Jason. I’ve got a question. Is the program open to applicants from outside the US? Thanks

    • http://blog.asmartbear.com Jason

      Yes as long as you have a company in the US and you’re able to spend the summer with us.

  • http://MyUnfolding.com Cole Young

    I love what y’all raw doing for the entrepreneurial family- thanks dudes. I just launched MyUnfolding.com after about 2 years building it, now I’m in beta phase. If you have any people who may want to give her a try, feel free to have them contact me. The site is a social seeding site in which the profiles set up, represent an extension of a person’s resume. And ive tied an ad app I developed called AdboX in with it. AdboX is creating quite a buzz right now because it has flipped the old ad model on it’s head; since the consumer is the driving force behind the economy, I designed AdboX so that each time an ad is uploaded to a person’s profile, they get 50% of the pay-per-upload transaction. So if Mark uploads a Pepsi AdboX to his profile because he likes Pepsi over Coke, then he’ll receive 50 cents and my company receives 50 cents from the Pepsi account that was created. And Pepsi wins because they’re notified each time a member uploads one of their boxes. I think ive come up with the solution to make ads cool again. Fellow commoners like me love it- Madison Ave will love it too. Any help is always appreciated- cheers, Cole

    • http://blog.asmartbear.com Jason

      Interesting idea. Surely you could create this ad system without also trying to displace Facebook? Also what’s stopping me from just randomly selecting brands to display so I get paid? Cause that’s exactly what kids would do, knowing between them that they mean nothing except beer money.

  • DS

    Is the $20k just straight up cash given to the five teams, or is it an equity investment?

    • http://blog.asmartbear.com Jason

      The cash plus the services and the summer program is in exchange for a 5% equity stake.

  • http://remembertowatch.com Paul

    You’ll be hearing from me soon.

    :P

  • Mike

    Hey Jason,

    We applied and have been reading from a lot of past applicants (Y Comb, TechStars, Capital Factory) on how they got accepted. It sounds like you need to be a stalker of the main person and mentors running the program. Need to ‘prove’ how much we want this. Send daily updates on progress. Be witty.

    Doesn’t sound very lean to me. I’ve got a business to figure out and spending time devising ways how I can impress Josh and you seems like a waste. I think Capital Factory is a bit different, but why are all these winning applications getting selected if they end up changing their entire business once they start the program? If they’ve already done customer discovery and validation they should be looking for p/m fit and scaling. What am I missing?

    Don’t get me wrong. I’ll walk across burning coals to get accepted and get to work with mentors like yourself. I just don’t want to spend 2 months focused on that when it might not matter what we do since our business is just not something of interest to the selection committee. I can’t imagine you want 500 emails everyday with an update.

    Obviously just submitting an application and hoping for a call back isn’t showing much initiative either.

    Thanks.

    • http://blog.asmartbear.com Jason Cohen

      “Stalking” might work for those programs, but we’re pretty democratic amongst the founders when it comes to the selection progress. It’s absolutely NOT me and Josh making choices.

      Of course it helps if some of the mentors have heard of you and like you, no surprise in that.

      Almost everyone changes their business as they go, sometimes drastically. That’s not bad, that’s life. While you’re right that SOME of the businesses changed a lot during the program, I would say 1/2 don’t fundamentally change at all, maybe just tweaking how they go to market or re-prioritizing features or new hires.

      Being “witty” doesn’t help. Demonstrating progress in an interesting market is golden.

      Of course you shouldn’t send 500 emails, and any program that requires such a thing is certainly disrespectful of your time.

      If the application process helps you clarify in your own mind what you’re trying to do, that’s valuable regardless. Beyond that you’re completely right to spend a teeny fraction of the time on such things — even if your business is great there’s still a good chance it won’t be chosen just because (a) we’re imperfect too and (b) we only pick 5 of 300.

      As an example of a better balance of your time, why not come to some event that one or more of the mentors is going to (usually obvious from Twitter or the organizations they’re affiliated with) and find them and pitch that way. If they like it it’s easy to follow up with emails. If not maybe the event is fun, and you don’t waste more time with emails.

      • Mike

        Thanks Jason, I really appreciate the reply.

        I was (I thought) obviously over-exaggerating the situation. The application process itself was really worthwhile and helped us clarify things we wouldn’t otherwise have spent time on. I personally liked the questions asked vs. some of the other programs.

        Great advice as always. Might be tough to get to events since we’re in Chicago, but I will try to reach out to some of the other mentors and see if they have any insights.

    • http://blog.asmartbear.com Jason Cohen

      “Stalking” might work for those programs, but we’re pretty democratic amongst the founders when it comes to the selection progress. It’s absolutely NOT me and Josh making choices.

      Almost everyone changes their business as they go, sometimes drastically. That’s not bad, that’s life. While you’re right that SOME of the businesses changed a lot during the program, I would say 1/2 don’t fundamentally change at all, maybe just tweaking how they go to market or re-prioritizing features or new hires.

      Being “witty” doesn’t help. Demonstrating progress in an interesting market is golden.

      Of course you shouldn’t send 500 emails, and any program that requires such a thing is certainly disrespectful of your time.

      If the application process helps you clarify in your own mind what you’re trying to do, that’s valuable regardless. Beyond that you’re completely right to spend a teeny fraction of the time on such things — even if your business is great there’s still a good chance it won’t be chosen just because (a) we’re imperfect too and (b) we only pick 5 of 300.

      As an example of a better balance of your time, why not come to some event that one or more of the mentors is going to (usually obvious from Twitter or the organizations they’re affiliated with) and find them and pitch that way. If they like it it’s easy to follow up with emails. If not maybe the event is fun, and you don’t waste more time with emails.

      Cheers,
      Jason

      http://blog.ASmartBear.com
      @asmartbear

  • http://jobspert.com/placement-papers/ John Papers

    An interesting and intellectually written post. Thankz for the good work dude.

  • Anonymous

    How cool is this??

  • http://www.taylorbrooks.org taylorbrooks

    What’s the typical equity stake for $20,000?

    • http://blog.asmartbear.com Jason Cohen

      5%. Not just for the investment but everything we do.

  • http://www.orlandoinsuranceadvice.com Orlando Insurance

    Freekin sweet. SIgn me up. Is the 20k just straight cash or does it come with like some sort of stipulations on how the comp should be ran….?

    • http://blog.asmartbear.com Jason Cohen

      No stipulations.

  • Waka_waka

    My friends company went through Capital Factory two years ago and their outcome was lackluster. Capital Factory’s big idea was to overhaul their site and change their business model. So now they are irrelevant with a useless business model and a competitor in the Valley just got $25 mil in funding from Sequoia Capital (funded Google, Apple, etc.) Given the crummy outcome for most Capital Factory grads, you’d be better off heading out to the Valley to learn from the pros.

    • http://blog.asmartbear.com Jason Cohen

      Actually the *majority* of the companies got funded at capitalfactory that year.

      I’m sure that the fact that two years after a 10-week summer program they are “irrelevant” is due to the summer program. Great analysis.

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  • http://www.thehairwigs.com full lace wigs

    I’ve got a business to figure out and spending time devising ways how I can impress Josh and you seems like a waste. I think Capital Factory is a bit different, but why are all these winning applications getting selected if they end up changing their entire business once they start the program?

    • http://blog.asmartbear.com Jason Cohen

      If you believe the idea is to impress two people, you shouldn’t do it!

      “changing their entire business” is inaccurate. Pivoting around the idea is correct.

      Example: sparefoot started as a way for people to inexpensively store stuff with other people, and ended up connecting people with public storage. The core is the same — finding storage — but the mechanism changed.

      And other times nothing core changes, like with recyclematch. But we helped them figure out te niche to start in, how to sell it, how to price it, what features it needed, we got it funded, and one if the mentors became their CEO.