A list of top Austin accelerators and incubators

Faith Merino · June 14, 2013 · Short URL: https://vator.tv/n/3016

Can't afford life in Silicon Valley? Try the "Silicon Hills" of Austin

I’ve never been to Austin, so I can’t personally say that it’s not like the rest of Texas, which, as the “business friendly” state, is sounding more and more like Bangladesh. Nevertheless, the tech scene in Austin is booming, so much so that it’s been dubbed the “Silicon Hills.” Heavy hitters like Apple, Facebook, Google, HP, IBM, Dell, and more have set up shop in Austin, and the city now accounts for much of all the tech-related revenue in the state.  

So if you’re looking to get your idea off the ground and you don’t want to live under a freeway overpass in Silicon Valley, Austin is the place to go. Here we’ve compiled a list of accelerators and incubators in Austin, which include:

The Capital Factory

The Capital Factory’s stated goal is “revenue, not funding.” With the aim of helping startups reach profitability with less than $1 million in funding, Capital Factory is ideal for the lean startup.

Deal terms: The incubator takes a 2% stake in each company, and for those that move onto the accelerator, each mentor receives a 1% stake. Additionally, the Capital Factory ATX fund will match any investment made by a startup’s lead mentors up to $50,000.

What you get: Companies accepted into the incubator receive $50,000 worth of free hosting, software, and services, in addition to office hours with mentors, office hours with investors and VIP guests, 24 months of co-working membership at the Capital Factory space downtown, and free hosting credits from Rackspace, Amazon Web Services, and Microsoft Azure for two years. Once in the incubator, startups can recruit mentors and join the accelerator, which will give them first priority access to office hour slots, demo day slots, press introductions, and more.

Who should apply: The Capital Factory is focused on cash-efficient startups that have a clear business model. They also like to see a minimum viable product and customers using it. Many of the startups that have gone through the Capital Factory have involved SaaS, B2B, consumer marketplaces, email, online marketing, and enterprise software, but a Capital Factory spokesperson says that they’re starting to take on more and more startups that have a hardware component.

TechStars Austin

The newest TechStars location, the Austin program was announced last month and is scheduled to get underway in August with its first batch of startups. TechStars Austin will actually operate out of the Capital Factory’s space in downtown Austin, and Capital Factory founders Josh Baer and Bill Boebel will be TechStars mentors.

Deal terms: TechStars receives 6% of common stock in exchange for the program itself, $18,000, access to a $100,000 convertible note, and several hundred thousand dollars worth of perks and offers from vendors.

What you get: access to one of the most successful tech accelerators in the country. TechStars only accepts 1% of startups that apply. In addition to the $18K and the $100K convertible note, startups also get 10,000 Business ExtrAA points through American Airlines, which can be redeemed for up to 5 PlanAAhead Awards for roundtrip tickets within the Continental U.S., Mexico, or Canada. Startups also get $10,000 worth of legal counsel through Cooley, $2,500 worth of banking services through Silicon Valley Bank, over $265,000 worth of hosting services through Rackspace, Amazon Web Services, Softlayer, and more.

Who should apply: “We are looking for the same thing everywhere: great teams tackling interesting ideas,” said Austin Managing Director Jason Seats. “Because each location is supported by the community and local mentors and investors, you'll find that there is a subtle implicit set of themes in many locations based on the background of the individuals involved.”

DreamIt Ventures Austin

Since 2008, DreamIt entrepreneurs have raised over $80 million, have appeared on ABC’s “Shark Tank,” and have been selected as finalists at TechCrunch Disrupt.

Deal terms: DreamIt takes a 6% stake in each company. In exchange, companies receive $5,000 per founding member, up to $25,000.

What you get: The three-month program includes free counsel from top lawyers and accountants, mentorship from industry movers and shakers, and access to DreamIt’s speaker series, which has included Fred Wilson, Ben Lerer, and more. Startups will also get networking opportunities with VCs and angels, and access to a community of other entrepreneurs and technologists.

Who should apply: DreamIt Ventures accepts rolling applications for tech startups, although they don’t necessarily have to be in IT, software, or the Web. DreamIt also accepts startups in the physical sciences, medical devices, and other areas. A few notable companies that have already come out of DreamIt include TopFloor, SeatGeek, and Parse.ly, among others.

The Incubation Station

The Incubation Station is not exclusively a tech incubator, but rather an accelerator for consumer product goods. “The Austin tech scene is very strong, and there is great support for entrepreneurship here,” said Incubation Station marketing director Austin Choate. “However, there is less support for CPG entrepreneurs, so we are remedying that by are building a network of resources to support diversified industry here in Austin.”

Deal terms: The Incubation Station takes a 2-10% stake in accepted companies, for an average of 6%, in exchange for $5000 per founder up to $20,000 total.

What you get: In addition to the chunk of change, startups get one-on-one mentorship with industry leaders, investors, executives, and more, as well as co-working space, $3500 in legal services, access to service providers, and more.

Who should apply: “We look to invest in companies that have proved the existence of a large market and the viability of their product (consumers are willing to purchase), and are aligned with consumer trends – such a eco-friendly, socially conscious, and organics, which are much faster growing categories than most of the consumer segments,” said Choate.

Tech Ranch Austin

Founded in 2008, Tech Ranch Austin is not a traditional incubator/accelerator, but rather a place where entrepreneurs can find resources for co-working, private desks, event space rentals, office space, or participate in any of Tech Ranch’s programs.

What you get: No money, but lots of information. Tech Ranch’s programs include its flagship Venture Forth class for turning an idea into a business, Venture Start for those who want to start a business and need help finding the right idea, and Venture Builder, which is more of a mentorship program for those who want to accelerate their business.

Austin Technology Incubator

Operating through the University of Texas at Austin, ATI has helped over 250 companies raise over $1 billion in financing to date. ATI accepts 8% of startups that apply to the program and has seen an 85% success rate. In 2012, 15 of its startups raised at least $1 million, and five raised at least $5 million.

Deal terms: ATI does not invest in its member companies, but rather remains a non-conflicted advisor in helping them identify and raise funds.

What you get: 2-4 hour strategy sessions with the ATI team and external advisors to identify key issues facing your company, “members only” knowledge building classes, networking opportunities for members, investors, and advisors, access to ATI’s database of professional service providers, and access to the state of Texas’s $100 million Emerging Technology Fund. To date, ATI’s member companies have won over 40% of Texas’s ETF awards.

Who should apply: ATI’s “sweet spot” for bringing a startup company on board as a member is one that is not too early or too late,” said Kyle Cox, ATI’s director of IT and Wireless. “That means the founder(s) are working on a high-growth technology startup focused in our core areas of Bioscience, Clean Energy or Enabling Technology, have spent some of their own money to get their idea into a prototype stage, and are at the point of needing strategy work, mentoring and eventually funding to take their company to the next stage.”


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