[premoney sf 2015] govtech fund >> ron bouganim, "out with the old, in with the govtech:...
TRANSCRIPT
Private and Confidential @GovtechFund
• 22 Million employees (3M Federal, 5M State, 14M Local)
• 15% of entire the US workforce
• DJIA: Microsoft, Exxon, Home Depot, McDonalds, etc: 6 Million
• $7 Trillion spend; market cap of DJIA: $5 Trillion
• Market cap of Apple+Google+Alibaba+Facebook+Amazon+LinkedIn+: $2.4T
• 100,000+ government agencies, departments
US Gov’t: Single Largest “Company” in America
Private and Confidential @GovtechFund
What is Govtech?
Definition govtech, n. (gov-‐tek)
the technology infrastructure that governments use to manage
internal operations and deliver services to citizens
Private and Confidential @GovtechFund
Government’s “OS” • procurement • law enforcement • GIS mapping • tax collection / fraud • budgeting • pension liability • bond issuance management • healthcare
What Govtech Isn’t?
govtech civictech Citizen’s “OS” • community organizing • petitions • advocacy • elected officials comms • elections
Private and Confidential @GovtechFund
What is Govtech?
US: $175 Billion / Year
Global: $1 Trillion / Year
Private and Confidential @GovtechFund
A Massive Problem
The Veterans Affairs Department canceled its patient scheduling system -- spending $167 million over eight years and failing to deliver a usable product.
Legacy Vendors
Gov’t Contractors
historically no startups no innovation tech from the 80’s and 90’s!
Private and Confidential @GovtechFund
Enablers Of A Trillion Dollar Opportunity
Budget Constraints
+ Cloud Sales Cycle Compression
+ Civil Servant Retirement/Cultural
+ Open Data
= Multi-‐Decade, International Cycle
As Software Eats Government
Private and Confidential @GovtechFund
Timeline: Where Are We?
Next 10 Years Past 10 Years
Web 2.0
Govt 2.0 Movement
Open Source Movement
Open Data Movement
Cities “Getting It”
First Govtech
Accelerator
Code For America
Launches
Civic Commons: 650 Apps,
275+ Cities
International
Thousands of Govtech Startups
Expansion to State, Federal
Thousands of Cities
Private and Confidential @GovtechFund
A Little About Me
o 14 investments since 2007 o 3000+ hours with companies o 19.6x portfolio revenue growth o 3.5M average pre-‐money entry point o $35M in follow-‐ons by Khosla, Social
+Capital, Greylock, August, Baseline, Floodgate, Northbridge
o 4 companies have 10x potential o IRR: 50% realized, 100% unrealized
Investor
Entrepreneur
o Co-‐founder, early management 5 startups (CEO, COO, VP Corp Dev) :
o Raised $300M in venture capital, vendor financings
o 7 M&A transactions
Non-‐profit
o Donor, advisor, board member:
Limited Partner
Private and Confidential @GovtechFund
• $23M fund launched 9 months ago
• Focus: start-‐ups that are transforming the trillion dollar+ global government software market
• Seed/Series A investor
• 5+ years analyzing and working in the space
• Launched first-‐ever govtech accelerator
• 6 investments to date
• $5M invested, $40M of follow-‐on / co-‐invested capital
Introducing…the Govtech Fund
Private and Confidential @GovtechFund
Portfolio: Overview
procurement marketplace
urban planning big data
law enforcement
GIS platform in the cloud
government forms
long term liability analysis
Private and Confidential @GovtechFund
Portfolio: Govtech Startup Characteristics
• SAAS
• B2G: government is the customer
• Proprietary Technology, Patents
• Engineering Centric
• Multi-‐Agency, All Levels (City, State, Federal)
• Maximum 1-‐2 Quarter Sales Cycle
• Not regulatory plays, no lobbying
• Founder DNA
these are enterprise SAAS startups just addressing a new vertical
Private and Confidential @GovtechFund
Portfolio: Velocity
• Average sales cycle: 86 days • 20% CAGR
• 2x, 2x, 2x
• 1/day • $300K, 14 days