How Texas Became the Ultimate Startup Hub – Joshua Baer on Driving Alpha

Driving Alpha

How do you turn Texas into a global innovation hub? For Joshua Baer, founder and CEO of Capital Factory, the answer lies in empowering unstoppable founders, fostering a vibrant entrepreneurial community, and leveraging Texas’s unique advantages.

Here’s a glimpse of what you’ll learn:

• 00:43 Introduction to the Driving Alpha Podcast
• 00:54 Meet Josh Baer: Texas Startup Powerhouse
• 01:37 The Impact of Capital Factory
• 03:44 Josh Baer's Entrepreneurial Journey
• 07:07 Early Ventures and Lessons Learned
• 11:06 The Birth of Capital Factory
• 13:58 Investment Strategies and Focus
• 17:22 The Future of Robotics and AI
• 18:02 AI's Impact on Humanoid Robotics
• 18:22 The Inflection Point of GPS in Smartphones
• 19:31 Capital Factory's Open-Door Policy
• 20:21 Texas: A Hub for Startups and VCs
• 21:12 The Path to Becoming a VC in Texas
• 26:46 Government and Dual-Use Technology
• 31:15 The Booming Tech Scene in Texas
• 34:34 Conclusion: Reflections and Future Prospects

In this episode...

On this episode of Driving Alpha, host Steve Brotman explores Joshua’s journey from launching a startup in his dorm room at Carnegie Mellon to building Capital Factory into the most active early-stage investor in Texas. With nearly 1,000 investments, the firm isn’t just funding startups—it’s creating an ecosystem.

Capital Factory focuses on “dual-use” startups that serve both commercial and government markets, with Texas positioned as a leader in AI, robotics, and national security. Companies like Aptronic, a pioneer in humanoid robotics, showcase Texas’s growing role in transformative industries.

“Texas is our nexus,” says Joshua. “It’s where we have a unique advantage—a center of gravity for innovation.”

By combining talent-driven investing with a collaborative model that partners with VCs, Capital Factory is redefining what’s possible in venture capital.