Engineering faculty responsible for leading capstone projects are often faced with challenges in defining project topics for students. There is an ongoing need for developing new project topics that can be tackled by teams of upper-division undergraduate students. In contrast, during the early phases of establishing a profitable business, many startup companies are faced with an overwhelming number of research and development tasks required to build innovative products. Due to constraints in engineering resources or subject matter expertise, some of these projects may be deferred or left unsolved within the startup organization. Some of these small-scale projects, however, are very suitable to be undertaken by students in their last academic year. The students can apply knowledge learned from the engineering curriculum to real-world projects in their senior capstone design class. This paper focuses on discussing our classroom experiences in integrating industry sponsored projects from a startup company into a senior capstone design course in a computer engineering program. The capstone design course builds upon fundamentals of an ABET-accredited computer engineering curriculum. The design course simulates real-world project experiences and offers an opportunity for students to learn new skill sets including the design, debug, build, and test of prototype systems as well as oral communications and knowledge in engineering ethics from an instructor-led team-oriented environment. The industry sponsor also benefits from the project deliverables and an opportunity to interact with groups of students who are often eager for an opportunity to apply their knowledge and ultimately launch their career. Details of sample projects and feedback from students in meeting course objectives are discussed in this paper.