Quite a few of the Capital Factory founders and mentors have submitted panel proposals to South by Southwest 2011 (SXSW). Please take moment to read them over, vote for the ones you like, and leave a comment!

Online self-storage marketplace SpareFoot Inc. has received a $2 million round of financing.  Austin-based SpareFoot, which was founded in 2008, received the funding from eight investors, according to a filing today with U.S. Securities and Exchange Commission.

 

SpareFoot was one of the five startup companies that completed the 10-week incubation program at the Capital Factory last summer.
 

The company’s online system is designed to enable users to compare prices of self-storage spaces. It also enables those with extra storage space to post a listing on Sparefoot.com for rental. The website lists both commercial and privately-owned residential storage space.

SpareFoot generates revenue from transaction fees paid by listers. Last year, CEO Chuck Gordon, who got the idea for SpareFoot when he needed a temporary storage space while studying abroad in college, called his nascent company the “Priceline.com for self-storage.”

Read more: Capital Factory grad SpareFoot Inc. raises $2M - Austin Business Journal 

Thursday, June 10, 2010, 11:00pm CDT | Modified: June 10, 2010, 11:00 PM

New Capital Factory class teaming up

When hundreds of startups applied to be in this year’s class at Capital Factory, which runs a 10-week accelerator program during the summer for early-stage tech startups, the people choosing the five selectees were looking less at their companies’ ideas and more at the people responsible for making them work.

“Ideas are a dime a dozen,” said Bryan Menell, one of three directors and 20 mentors at Austin-based Capital Factory. “The value is not in the idea, it is in the team.”

It’s a lesson all would-be entrepreneurs should learn, said Menell, who has founded a handful of companies and advises others.

Having a great idea for a product or business is the least important part of launching a startup, fellow Capital Factory Director Joshua Baer said, because startups should be focused on finding voids in their markets and developing creative ways to attack them.

“A different way of saying that is that startups are trying to solve a hard problem,” said Baer, founder and CEO of Austin-based OtherInbox. “Inherently, the idea is wrong. I want a great team that is smart, driven and excited about solving the problem.”

This year, Capital Factory selected three Texas companies and two from other states for the second class of its summer entrepreneurial mentoring program, which began June 1. Participants receive up to $20,000 in seed capital, office space if wanted, various business services and weekly mentoring. The program concludes with a demo day in September when the companies present their business plans to professional investors and fellow entrepreneurs at the AT&T Conference Center at the University of Texas.

This year’s participants include Austin-based Hurricane Party, which operates a location-based social networking application designed to enable users to create, manage and discover events; and Houston-based RecycleMatch, an online marketplace designed to connect companies that have waste material with companies seeking the same type of material.

Both companies have strong management teams who can improve and refine ideas into marketable realities, Menell and Baer said.

At Hurricane Party, 27-year-old Rene Pinnell met his two cohorts through a three-day networking and brainstorming event for students at the University of Texas. Hurricane is his brainchild. And after trying before to raise it with others, Pinnell said he is keenly aware of the difference a solid team dynamic makes.

Pinnell’s advice to entrepreneurs is to approach a startup with the same seriousness as getting married — don’t do it with someone you don’t want to spend your life with.

“You have to really trust [your colleagues]. You have to really respect them. You have to like them and want to spend time with them after the workday is over,” he said. “If you can’t, there is not the right chemistry.”

At RecycleMatch, the partnership involves actual marriage, although not to each other. Chad Farrell, 43, co-founded the business with his sister-in-law, Brooke Betts Farrell, 40.

“People were concerned that it would be hard for us to work together,” Chad Farrell said. “For me, it has been better because there is a level of trust that she has the same interest in our family as a whole.”

Having already launched successful startups, Farrell said he too can appreciate a team dynamic unlike he has had before.

One might think working with friends or with family would cause members to tiptoe around each other or shun robust conversations involving the company.

But Farrell said that’s not the case when there’s trust.

“If you are on a team where the members have different agendas and you don’t trust each other, it is harder to have frank conversations,” Farrell said. In these siblings-in-laws’ case, “we hold each other accountable. There is a back-and-forth.”

For budding business owners who are still searching for those special partners, it helps to look where they congregate, Capital Factory directors said.

For example, if a business needs someone with superior technology skills, don’t hang out at general entrepreneurial events. Instead, seek skill-centric groups and get people excited about your idea, they said.

In picking startups for Capital Factory, directors typically look for two people, Mennell said: “One person needs to be the builder of products and technology, and the other needs to be able to sell the product. … [Later], other skills and roles become important, but to get off the ground, solo entrepreneurs have a hard time finding success.”

This post is part of our ReadWriteStart channel, which is a resource and guide for first-time entrepreneurs and startups. The channel is sponsored by Microsoft BizSpark. To sign up for BizSpark, click here.

While millions will flock to beaches to catch some sun and splash in the ocean, the five Capital Factory participants will be diving in head first into a sea of code hoping to improve the quality of their product through group sessions and mentorship opportunities. The five companies include three Texas natives: Hurricane Party from Austin, Smackages from Dallas and RecycleMatch from Houston. The other two participants, Simpz and Corkshare, are from Boston and Cleveland, respectively.

So how does an incubator like Capital Factory go about choosing their finalist companies? According to a press release, the answer may be more about the mentors than the actual participants.

"The five startups were selected from a pool of hundreds of applicants following their submission of a one-page application, five-minute video and in-person interviews with the mentors," says Capital Factory. "With many promising entrepreneurs to choose from, the mentors focused on markets that they have experience with and the smartest teams that have already accomplished a lot with very little."

It seems that understanding who you are applying to plays a key role in being accepted into an incubator like Capital Factory. When sending applications to multiple incubators, it's important to not just send duplicates to each program. Look at who the mentors and facilitator are see what their histories are, and there may be a particular market or interest that you can draw attention to in your application.

Capital Factory also makes a point to note that they accepted companies that had already made significant progress at the early-stages without many resources. The point of these programs is to help fund the great companies with innovative ideas that would otherwise go unfunded, so make sure your application expresses your early shoestring efforts.

For 10 weeks the five finalist companies will receive guidance from twenty mentors, culminating in a Demo Day in September to show-off their products and their improvements over the summer. The participants will receive up to $20,000 in seed money in return for a 5% equity stake for Capital Factory, as well as a treasure trove of freebies. Hosting, office space, branding development (including logo design), presentation training and recruiting support are just a few of the added bonuses available for the companies.

The Capital Factory Demo Day will be streamed live in September, so if you're interested in learning about these companies and their experiences be sure to catch that later on this year.

Austin Business Journal