Austin’s Capital Factory, VC Firms Launch New Funding Match

2/3/14Follow @angelashah

Capital Factory in Austin today announced an investment matching program with two venture capital firms that could bring in an additional $100,000 for startups.

The program requires that a startup joins the Austin-based co-working space and incubator, and that the entrepreneurs can convince two Capital Factor partners to personally invest $25,000 each. Then, Capital Factory will join with a $50,000 match, and Silverton Partners and Floodgate will also invest $25,000 each.

“I think this is a very strong affirmation that Austin is becoming a red-hot market to invest in,” says Jan Ryan, a longtime Austin entrepreneur and investor, who is also a Capital Factory mentor.

She added that the program is further evidence of the growing investment ecosystem in the Texas capital. “This is not just one VC firm but two, and one based out of California,” Ryan says, referring to the Palo Alto-based Floodgate. “They believe Austin is as strong as we’re seeing it to be.”

The program is open to all of Capital Factory’s current startups, which numbers about 30. The matching investment will typically be made using a convertible note with a $3 million cap and a 20 percent discount, says Josh Baer, the founder of Capital Factory.

“There are many people who want to invest in Austin and things like this to bring their attention to how to do that,” Ryan added. “Capital Factory is on the right track.”

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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