Accelerator · Investor · Dual-Use Innovation · 701 Brazos
Capital Factory, co-founded in 2009 by Sam Decker, Joshua Baer and Bryan Menell, has been the most active investor in Texas since 2010 by Pitchbook's count, with nearly 2,000 investments. Its Center for Dual-Use Innovation put seven federal innovation units under one roof and seeded Austin's defense-tech companies.
Overview
Capital Factory opened in 2009, in the post-financial-crisis trough, with the stated goal of becoming "the center of gravity for entrepreneurs outside of Silicon Valley." It runs from the Austin Centre at 701 Brazos downtown and has expanded to Dallas, Houston, San Antonio, Bentonville, Arkansas, and Washington DC, the footprint Baer describes as the "Texas Startup Megatropolis" in his Texas Startup Manifesto.
The San Antonio office sits at Port San Antonio's Tech Port, working with the Geekdom incubator on early-stage handoffs. The Washington DC office handles federal relations and defense work.
Funds
The All Access Fund's terms of up to $100,000 for 1% equity are founder-friendly next to accelerators that take 5-10% for similar capital. Admission requires traction, market size and operating maturity rather than an idea-stage pitch.
| Fund | Stage and Terms | Focus |
|---|---|---|
| All Access Fund | Pre-seed to seed; up to $100,000 for 1% equity, six months of office space, mentorship; rolling admission | High-potential ventures, with introductions to Live Oak Ventures, S3 Ventures and Silverton Partners |
| Texas Fund | Inflection-point investments in Texas startups | Texas companies at their first major scale-up |
| Fellowship Fund | National, through the Aspen Institute's Henry Crown Fellowship network | Startups led by or tied to Henry Crown Fellows |
Defense
The Center for Dual-Use Innovation (CDI), launched in 2019 as the Center for Defense Innovation, hosts seven federal innovation units at 701 Brazos. Capital Factory portfolio companies have won more than $500 million in government grants and contracts through CDI, and its Dual-Use Academy teaches founders government contracting, work with acquisition officers and non-dilutive funding.
The Innovation Council seats defense primes BAE Systems, Northrop Grumman and Raytheon alongside the startups they partner with, acquire or compete against. All three hold positions on Golden Dome programs, and the council gives founders access to prime program offices, test ranges and contract vehicles.
| Unit | Branch or Agency | Function |
|---|---|---|
| Defense Innovation Unit (DIU) | Department of Defense | Commercial technology for national security; in Austin since 2016 |
| AFWERX | Air Force | Air Force innovation arm; SBIR/STTR, Spark and Prime programs |
| SpaceWERX | Space Force | Orbital and launch technology |
| NavalX | Navy and Marine Corps | Autonomous maritime, undersea and expeditionary systems |
| Army Applications Laboratory | Army | Rapid prototyping and commercial technology transition |
| Army Futures Command | Army (part of T2COM since October 2025) | Army modernization; Austin headquarters since 2018 |
| National Geospatial-Intelligence Agency (NGA) | Intelligence Community | Satellite imagery, mapping and positioning |
Portfolio
Shield AI, Anduril (in the Golden Dome space-based interceptor prototype pool) and Palantir (a Golden Dome software consortium member) also operate in Austin. Systems designed in Austin are tested and fielded along I-35 at Fort Cavazos in Killeen, about 60 miles north, where Lockheed Martin, Northrop Grumman, Leidos and Booz Allen run autonomous systems, drone swarm and tactical AI programs. In connected mode these systems rely on SpaceX Starlink and Starshield and the Space Development Agency's tracking satellites.
Autonomous Vessels
Valued at $9.25 billion after a $1.75 billion Series D in 2026, with a $392 million Navy contract. In July 2026 it picked the Port of Brownsville for Port Alpha, a shipyard of more than $3 billion on 835 acres.
Counter-Drone
Maker of the Bullfrog autonomous counter-drone weapon station, valued at $2.2 billion. It tripled its Austin plant at 510 St. Elmo Rd to 57,000 square feet in February 2026 and holds contracts with the US Army, SOCOM, South Korea and the UAE.
Events and Programs
The portfolio covers AI and enterprise infrastructure, defense and aerospace, digital health, fintech, SaaS and consumer technology, now weighted more toward defense and AI than in 2010-2018; recent names include Surf Therapeutics (March 2026) and Radia. Hundreds of mentors in venture capital, corporate development, government innovation and product engineering deliver most of the value beyond the check.
Baer co-teaches the Longhorn Startup Seminar and Lab, a for-credit UT Austin course for student founders, about a mile south of campus. The defense work coordinates with T2COM and the Army Software Factory at Austin Community College's Rio Grande Campus; the health work, with Dell Medical School and regional hospital systems.
| Event | Format |
|---|---|
| Fed Supernova | Three-day national security and dual-use event for founders, military innovators, program officers and investors |
| Health Supernova | Health-tech event with hospital systems, pharma companies, payers and investors |
| Austin Tech Week | Citywide technology gathering outside the SXSW window |
| CF House @ SXSW | Hundreds of curated founder, investor and corporate meetings during SXSW; the 2026 edition launched STATION Austin on March 13 |
| Cup of Capital | Monthly coffee networking rotating among Austin, Dallas, Houston and San Antonio |
| Founders Academy Essentials | Quarterly three-day course led by co-founder Gordon Daugherty |
Record