Capital Factory Boosts Statewide Connectivity With Its New Location

Capital Factory is opening its first Houston spot. Here's what that means for Dallas-based startups and investors.

Texas-based Capital Factory, which labels itself the center of gravity for entrepreneurs in the state, is gearing up to open its first Houston location later this month.

Earlier this year, Capital Factory announced it was partnering with The Cannon for its Houston site. Capital Factory will have a branded area in the expected 120,000-square-foot space, and has hired two new employees to prepare for the opening, as reported by InnovationMap.

And while the new spot is down south, it’s a move that could majorly boost startups and investors here in Dallas.

Capital Factory expanding is a positive for startups because it will create connectivity across the state, Trey Bowles, co-founder and chairman of the board of The Dallas Entrepreneur Center, told Dallas Innovates. He says that could lead to more startup collaborations, talent, and hopefully attract additional capital to Texas.

“Capital Factory has been a great launch pad for companies that need and are ready for funding, giving more and more tech entrepreneurs the chance to build and grow sustainable and scalable companies,” Bowles says. “Like in so many states and regions across the U.S., having a strong and connected network within Texas will create a benefit much like a rising tide that raises all ships.”

Capital Factory President Gordon Daugherty told Dallas Innovates that Capital Factory always co-invests with other investors, so the entry into Houston means that investors in Dallas and beyond will have easier access to Houston-based investment deal flow.

And those relationships will also be more readily available for startups, too.

“Capital Factory’s mission with the Texas Startup Manifesto is to connect the major metropolitan areas into a single, seamless, and collaborative startup ecosystem across the state,” Daugherty says. “Our entry into the Houston market means that our portfolio of startups in Dallas, Austin, and San Antonio will more easily be able to connect with prospective employees, investors, and customers in Houston.”

Capital Factory has roots in Austin, but refers to itself as being based in Texas. That mindset coincides with the Texas Startup Manifesto, which is the vision of treating the entire state like one big city. Launched around two years ago, the Manifesto aims to show entrepreneurs that they should be talking to investors in all of the major cities.

Bowles echoed the sentiment that the Houston move will bring the state closer to that goal.

“A win for Houston is a win for Austin. An exit in Dallas could help a Houston startup find better talent, because more tech workers are moving to the state,” Bowles says. “This is a great step to increasing the opportunity for entrepreneurs to succeed and for Texas to continue to lead the country as the best state to start a business.”

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Bryan Chambers, Capital Factory’s VP of accelerator and investment fund, says the team is excited about the growth of Houston operations, as it’s a critical piece of the Manifesto that will help to create ‘tremendous value’ for startups and investors.

“Similar to how Dallas and Austin’s operations have been working seamlessly together over the past year, it’s important that Dallas startups understand the breadth of resources now available to them in Houston, including access to the region’s top mentors, investors, and corporations,” Chambers, who operates out of the Dallas location, says. “While we now have two full-time employees in Houston, many other team members including our executives plan to spend substantial time in the Houston market.”

Last June, Capital Factory partnered with The DEC and opened its first Dallas location at The Centrum on Oak Lawn. It’s been a successful experience for the organization—one that equipped Daugherty and the team with the tools to open a location in Houston.

“In 2018, 25 percent of the startups we onboarded into the accelerator were from outside of Austin,” Daugherty told InnovationMap. “The first half of this year, a third or more have come from Dallas alone. And I expect the same from Houston. Next year, easily more than half of our new accelerator companies will be outside of Austin.”

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