1776 discovery fund investor pitch
DESCRIPTION
1776's Super Accelerator Fund Investor PitchTRANSCRIPT
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Super Accelerator and Discovery Fund
Investor Pitch
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America faces profound challenges…
…to reinvent education, health, energy, government, and politics.
…to be leaner. …to be better.
…to be more responsive to citizens as consumers.
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Consumer Web: $70b
Education: $869b Health: $1,067b
…in markets that account for over 50% of GDP
Energy: $1,200b
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Washington is the most powerful city on earth…
…with a nexus of connections to every major corporation, NGO, government agency, and country in the world.
…with unparalleled domain expertise in the public sector, regulated industries, and global markets.
…with unrealized pools of talent and capital.
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The 1776 platform…
…connects the hottest startups in the world, tackling the biggest challenges, with the unique assets of DC.
1776 Campus 501c3
1776 LLC For Profit
1776 Fund Partnership
Campus School Super
Accelerator Media and
Events Fund
Revenue from Startups
Donors Sponsors Investors
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Cofounder, 1776 Chair, Startup DC
Founder, Synteractive Founder, netDecide
Evan Burfield Donna Harris Cofounder, 1776
MD, Startup America Vice Chair, Interpoint Group
4X startup Founder and Executive
The Leaders…
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The Advisors…
Brad Feld Foundry Group
Jonathon Perrelli Fortify.vc
Patrick Riley Global Accelerator Network
Kevin Willer 1871
Paul Singh 500 Startups
David Cohen TechStars
Scott Case Startup America
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The Strategy of the 1776 Super Accelerator and 1776 Discovery Fund
To identify and attract the most promising startups disrupting the
status quo in highly regulated industries
To leverage proprietary networks of advocates and corporate partners to provide them with an unfair competitive advantage
To benefit financially by investing in these startups through a
structured, data-driven methodology (the Moneyball approach)
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The 1776 Super Accelerator will…
Be a “graduate” accelerator that focuses on startups that have already demonstrated product-market fit and capital readiness
Select “Seed C stage“ companies that already have clear evidence of traction raised seed capital from credible sources but have not yet raised a “Venture A round”
Focus on startups engaged in the “consumerization of the public sector” with consumer-style products in complex, highly regulated industries such as education, health, energy, transportation, and government
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The Super Accelerator program will…
Help startups develop scalable business models compatible with complex industry dynamics
Navigate regulatory risks and opportunities
Develop corporate partnerships focused on distribution and whole product solutions
Activate a federal, state, and local advocacy network to drive revenue growth
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The Super Accelerator program will…
Be open to 10 to 12 startups per class
Be a 90 day program with key elements of team based in DC
Provide ongoing virtual alumni engagement with regular alumni events in major cities
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Super Accelerator mentors will be…
Advocates with deep networks within regulated industries both in DC and at state and local level
Experts from key corporate partners within regulated industries, formed into Industry Councils for each key industry
Accomplished entrepreneurs with a track record of successful disruption in regulated industries
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Super Accelerator deal flow will come from…
Direct partnerships with top tier Accelerator such as 500 Startups, TechStars, and members of the Global Accelerator Network
Personal networks with the Startup America regional leaders
Other 1776 programs such as the 1776 Campus and 1776 Events
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Super Accelerator deal selection will leverage…
Due diligence from the 1776 advocacy network with direct expertise within regulated industries and at the state and local level
Expertise from Industry Councils of corporate partner within regulated industries
Panel of venture capital advisors with expertise in regulated industries
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The 1776 rules of thumb checklist Product shows evidence of multiple data-driven iterations
Product solves a problem for a specific target customer within regulated industry
Capital-efficient business – operational @ < $1 million in funding
Primarily internet-based distribution – search, social, mobile, local
Simple revenue models – transactions, subscriptions, or affiliates
Measurable usage – some customers, early revenue
Potential to create barriers to entry through solving regulatory or distribution challenges
Small but cross-functional team – engineer, design/UX, marketing
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The 1776 Discovery Fund will…
Make initial investments of between $75,000 and $150,000 into Super Accelerator companies plus select non-accelerator companies (typically leading a Seed C round of $400,000 to $650,000)
Track performance data on portfolio in a near real time basis to determine winners and losers
Leverage pro rata rights to make follow on investments in most promising startups in portfolio
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Leverage feedback loop…
Build strategic relationships with corporate partners and venture funds as both sponsors and LPs
Understand what corporate partners are interested in acquiring and what venture funds are interested in funding
Use inside information to increase odds of early acquisitions (regular small wins) and major funding rounds into companies with right attributes to build something great (a few big wins)
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The Moneyball approach…
30% of capital in initial investments 30 to 40 investments per year
70% of capital in follow on Filter out failures
Follow on in top 20% to 30%
Early acquisitions by corporate partners
Major venture investments into companies with potential to be great
Selection benefits from advocacy network, corporate partners, and venture partners
Follow on investment decisions based on analysis
of private performance data
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1776 Discovery Fund terms…
$25 million fund
Seven year life with option for two year extension
Two year investment period
2% management fee
20% carry with ratchet for portfolio return above 3x